Every lender has its own requirements for your business, but most will evaluate your application based on similar criteria.

Annual revenue, credit score and years in business are a few factors that impact your ability to qualify for a business loan.

As part of your loan application, your business will have to provide certain documents like tax returns and profit and loss statements.

The best small business loans will require your business to meet a long list of requirements. Although every lender sets its own requirements, understanding basic eligibility criteria and necessary documentation can expedite the application process, saving you time and potentially improving your chances of approval.

Lenders frequently check your personal credit score and your business credit score when you apply for a business loan. Your chances of approval are much stronger if you're considered a low credit risk — a personal credit score of 720+ or a business credit score between 80 and 100. In 2025, low credit risk borrowers were approved much more frequently than medium and high credit risk borrowers, according to findings from the 2026 Report on Employer Firms.

Banks and credit unions usually require personal credit scores of 670 or higher for business loans — for reference, Bank of America requires a 700 minimum personal credit score and Wells Fargo's requirement is 680. Online lenders, on the other hand, offer more flexible criteria, providing options for bad credit business loans. Fora Financial, for example, offers business loans to borrowers with credit scores as low as 570.

Your business credit score matters, too

Similar to a personal credit score, your business credit score expresses your business's creditworthiness. Business credit reports may include information on the number of employees, account information, past payment history and amounts owed. The better your business credit score, the more likely your business is to receive a loan and, potentially, at a better interest rate.

While revenue requirements vary by lenders, most will want to ensure your business has enough revenue to handle a new loan. There are options for startups or businesses with unpredictable cashflow, but lenders frequently require at least six figures — annual revenue starting at $100,000 — before they will consider you for a business loan.

Some alternative options, like merchant cash advances or invoice factoring, will make approval decisions based on either monthly revenue or total sales. While they may be easier to qualify for, they are extremely expensive and risky options that should be used only as a last resort.

Many lenders require businesses to have been in operation for at least two years before approving a standard business loan. Only 48% of businesses under five years old were approved for financing in 2025, according to the 2026 Report on Employer Firms.

There are some exceptions to the rule. Lenders that specialize in startup loans may only require six months in business. And some specific loan types, like equipment loans, may have no minimum time in business requirements.

Businesses in profitable and stable industries are more likely to appeal to lenders. Conversely, many lenders have a list of industries they won't work with — gambling, adult entertainment and cannabis are frequently ineligible for traditional financing. Research your options, especially if you work in a specialized field, to see what lenders your business qualifies for. 

Lenders will often ask to see bank statements and tax returns from each owner to ensure your business can responsibly manage a small business loan. They also may require a personal guarantee, which makes you and any co-owners personally responsible for paying back a loan if your business is unable to pay.

When you apply, strong credit will serve as an asset when the lender reviews your application. If you have poor credit, you may not be able to secure a competitive rate on a business loan. Similarly, if you have previously taken on other debt and failed to repay it, it may be more difficult to secure funding. Many lenders won't approve your loan if you've had a bankruptcy in the last few years. In these cases, having a history of recent, on-time payments for a loan will serve as an asset when the lender reviews your application.

A business plan explains to potential lenders what your business does, how it makes its money and how it will continue to succeed. Most importantly, a lender will want to know your plans for financing.

Most business plans will include basic information about your business and industry. You can work with a business advisor or a Small Business Development Center (SBDC) to shape your business plan.

Your business plan will likely need to have a few sections, including:

Executive summary

Company description

Market analysis

Organization and management information

Service or product line descriptions

Marketing and sales information

Funding request

Financial projections

Smaller lenders and nontraditional lenders may only need to see proof that you have sufficient revenue and cash flow to handle the loan, no matter how your business plans on using it.

For traditional term loans and Small Business Administration (SBA) loans, a proposal is key. A loan proposal is similar to a business plan and may be included in one. 

The loan proposal should outline:

Why your business needs funding

How your loan funds will be used

Your business's ability and plan to repay the loan

How funding will benefit your business

It isn't a requirement for every type of loan — and not every lender will want to see one. But you should still have one prepared when you are ready to apply.

You will need to list your business's debts and other financial obligations as part of a business loan application. This includes other loans you may have, business credit cards, regular bills and payroll numbers. A lender will want to confirm you have enough cash flow to manage a new loan payment.

Even if your business is profitable, it doesn't mean you can handle more debt. A lender will consider your debt-to-asset ratio when you apply. This tells lenders how much of your revenue is paid towards your current debts. The higher the figure, the harder it may be to qualify for a small business loan.

Debt-service coverage ratio

Debt-service coverage ratio (DSCR) may be used to compare a company's cash flow against debts. When a business applies for a loan, lenders use this information to assess risk and determine if the business has the capacity to repay the loan. The ratio varies from lender to lender, but a DSCR of 1.25 or higher is ideal.

Finally, there are a few pieces of documentation most lenders will require you to submit when you apply for a business loan. These include:

Profit and loss statements

Proof of ownership

Business licenses and registration

Employee identification number (EIN)

Balance sheets

Business insurance

Payroll records

Driver's license or other photo ID

Commercial lease agreement

The exact documentation, like every part of the application, depends on the lender you work with. As you move through the application process, your lender should provide you with the exact list of documents it needs to evaluate your eligibility.