Credit score thresholds, revenue minimums, required documents, and how requirements differ between banks and alternative lenders — all in one place.
Business loan requirements are not universal. They differ depending on the lender type, loan product, and requested amount. A merchant cash advance from an alternative lender has completely different requirements than a traditional bank term loan. Knowing exactly what each lender looks for — and matching yourself to the right product — is the difference between a fast approval and a rejection.
This guide breaks down requirements by lender type, loan product, and the specific factors lenders evaluate most heavily in their underwriting process.
| Requirement | Traditional Bank | Online Lender | MFE / Alt. Lender |
|---|---|---|---|
| Time in business | 2+ years | 1+ year | 3+ months |
| Monthly revenue | $50,000+ | $15,000–$25,000 | $10,000+ |
| Personal credit score | 680–720+ | 600–650+ | 500+ (flexible) |
| Business credit score | Paydex 75+ | Paydex 60+ | Not required |
| Collateral | Often required | Sometimes | Not required |
| Tax returns | 2 years required | 1 year required | Sometimes |
| Approval time | 1–4 weeks | 2–5 days | Same day |
| Funding speed | 1–2 weeks after approval | 1–3 days | 24 hours |
Time in business is one of the first filters applied by any lender. It signals stability and reduces the risk of early business failure. Alternative lenders like MFE accept businesses as young as 3 months because they rely more on revenue analysis than business history. Traditional lenders use 2 years as the standard threshold because their models require historical financial performance data.
Revenue is the most important factor for alternative lenders. It directly determines your repayment capacity and the maximum loan amount you qualify for. Most revenue-based lenders offer 1 to 1.5 times your monthly revenue as the starting loan amount. MFE requires a minimum of $10,000 per month in gross deposits visible in your business bank statements. Revenue must be consistent — lenders look at 3 to 6 months of statements to assess average monthly deposits.
Personal credit score is a factor at most lenders, but its weight varies significantly. Banks treat it as a gating requirement — below 680 and most traditional loan products are unavailable. Alternative lenders treat it as one signal among many. A borrower with a 550 personal credit score but $80,000 in monthly revenue and consistent bank statement deposits will typically be approved by MFE. A business credit score is not required but can positively impact your terms if you have one.
Business bank statements (3–6 months) are the most critical document in the underwriting process for alternative lenders. Lenders analyze average monthly deposits, minimum daily balances, overdraft frequency, and incoming revenue patterns. Avoid applying immediately after months with unusually low deposits or excessive overdrafts. The bank statements need to be for a dedicated business checking account — not a personal account.
Your business must be a legally registered entity with an active status in its state of formation. Lenders verify registration through state databases. An LLC, corporation, or partnership with an EIN is required. Sole proprietors operating under a personal Social Security number may qualify with some lenders but face stricter requirements and are not eligible for all products.
Most alternative lenders including MFE do not require hard collateral (real estate, equipment) for working capital products. However, a personal guarantee is standard — this means if the business defaults, you as the business owner are personally liable for repayment. This is standard across the industry and does not require pledging specific assets.
| Loan Type | Key Documents Required |
|---|---|
| Working Capital / Revenue-Based | 3–6 months bank statements, ID, business docs |
| Merchant Cash Advance | 3–6 months bank or processing statements, ID |
| Business Line of Credit | 6 months bank statements, ID, business docs, credit check |
| Equipment Financing | Equipment quote/invoice, bank statements, ID, business docs |
| Invoice Factoring | Outstanding invoices, customer list, AR aging report |
| Traditional Bank Term Loan | 2 years tax returns, P&L statements, balance sheet, business plan, collateral docs |
Merchant Fund Express has streamlined requirements designed for real small businesses, not just the top 20% of applicants:
There is no minimum business credit score, no collateral requirement, and no multi-year tax return requirement for most products. Apply online in 5 minutes at our application page or call (305) 384-8391.
Check your eligibility in minutes. Revenue-based approval with same-day decisions.
Apply Now (305) 384-8391Beyond meeting minimum requirements, these factors can improve your loan amount, rate, and approval speed:
Expertise: Our team includes certified funding specialists with years of experience helping businesses access capital.
Trust & Transparency: We're committed to transparent lending practices with no hidden fees or surprise terms.
Fast Approvals: Our streamlined process provides decisions within 24 hours in most cases.
Flexible Solutions: We work with you to customize funding solutions that match your specific business needs and cash flow.