Many lenders typically require a business to have one to two years of operation before being eligible for financing. However, there are small-business loan options available for companies with just six months in operation. Startups are considered risky, so lenders may charge higher interest rates and offer shorter terms compared to more established businesses.
Lenders use the time a business has been operating to assess its risk level. The longer a business has been in operation, the more likely it is to be able to repay its debts. Some loans are available to businesses with three to six months in operation, but more options become available after the one-year mark, demonstrating to lenders that the business has staying power.
While time in business is important, lenders also consider factors like personal credit score and revenue when evaluating loan applications. Strong finances and credit can help qualify a business for a loan, even if it is new.
For businesses with at least six months in operation, startup business loans may be available from online and community lenders. Online lenders have flexible qualification requirements but may charge higher interest rates and offer smaller loan amounts and shorter repayment terms. Alternative lenders may offer various loan types like equipment financing, invoice factoring, and merchant cash advances, which may be more accessible to newer businesses.
Merchant cash advances are typically expensive, so it’s important to consider other options before choosing this form of financing. Community lenders focus on underserved businesses and may offer microloans with competitive interest rates and repayment terms. Business lending marketplaces, like Fundera by BW, can provide multiple loan options for new companies. Some banks, like Bank of America, offer secured business lines of credit for businesses with at least six months in operation, with the possibility of transitioning to an unsecured line of credit in the future. Local banks may be more flexible with their requirements for established customers. Banks generally offer the most competitive rates and terms compared to online and community lenders. However, they are slower to fund and you’ll need to show strong credentials such as credit score, revenue, and collateral. If you have been in business for at least six months, you have the opportunity to secure financing through a simple and streamlined application process. Funding may be available within hours of signing your agreement. Here are the key details and requirements for some financing options:
✅ Requirements:
– Minimum credit score: 500
– Minimum time in business: 6 months
– Minimum annual revenue: About $8,334 per month
📋 Key details:
– Loan type: Merchant cash advance
– Maximum funding amount: $500,000
– Repayment term: 6, 12, or 18 months
– Funding speed: Within 24 to 48 hours
Why we like it:
Uplyft Capital offers a low credit score requirement, making it a good choice for borrowers with bad credit. Quick access to funds is provided, and there is no need for a personal guarantee.
For equipment financing, consider the following option:
✅ Requirements:
– Minimum credit score: 600
– Minimum time in business: 6 months
– Minimum annual revenue: About $20,834 per month
📋 Key details:
– Loan type: Equipment financing
– Maximum loan amount: $150,000
– Repayment term: 24 to 60 months
– Funding speed: As fast as 24 hours
Why we like it:
National Funding offers fast equipment loans to newer businesses and borrowers with bad credit, provided they have strong revenue. Equipment loans or leases are available for new and used equipment without requiring a down payment.
If you run a business-to-business company with capital tied up in unpaid invoices, consider the following option:
✅ Requirements:
– Minimum credit score: No minimum
– Minimum time in business: No minimum
– Minimum annual revenue: No minimum
📋 Key details:
– Loan type: Invoice factoring
– Maximum funding amount: $5 million in invoices per month
– Funding speed: Within 24 to 48 hours of invoice submission
Why we like it:
altLINE provides fast access to cash for businesses with unpaid invoices. The flexible underwriting process focuses on the creditworthiness of your customers, making it a suitable option for startups or borrowers with bad credit.
To improve your chances of getting financing after six months in operation, consider waiting for a loan, building strong personal credit, and demonstrating your business’s financial health. Additionally, using business assets as collateral can increase your chances of approval. following sentence:
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