2026 Industry Report

The 2026 Small Business Funding Report

Real funding data from 1,000+ approved small businesses across all 50 U.S. states. Approval rates by FICO, average funding amounts by industry, time-to-funding benchmarks.

1,000+ funded businesses analyzed Published May 2026 By David Chen Free to cite (CC-BY 4.0)

Executive Summary — 8 Key Findings

  • 71% of approved applicants had FICO under 700. The narrative that you "need 700+ for a business loan" is false for the alternative lending market.
  • Median time to funding: 2.4 business days. Down from 4.1 days in 2024.
  • Restaurant operators received the largest average funding (\$87,400 avg) across all surveyed industries — driven by equipment and second-location investments.
  • 23% of approved applicants were ITIN-only owners. A growing segment underserved by traditional banks.
  • Spanish-language applications grew 41% YoY, driven by Hispanic-owned business growth in TX, FL, CA, and NV.
  • Equipment financing approval rate: 89% — the highest of any product, driven by collateral structure.
  • Average factor rate dropped from 1.38 to 1.31 across our funded MCAs as competition intensified in 2025-2026.
  • 52% of applicants in our data had been declined by at least 2 prior lenders before applying with MFE — illustrating the gap in traditional bank coverage for sub-700 FICO businesses.

Headline Stats

1,000+
Businesses Funded
$50M+
Capital Deployed
2.4d
Median Funding Time
71%
Approved Below 700 FICO
50
States Covered
23%
ITIN-Only Owners

Approval Rate by FICO Score

The most-cited "credit minimum" varies wildly by lender. Here's our actual approval rate by FICO band:

800+ FICO
97%
750-799
95%
700-749
92%
650-699
84%
600-649
71%
550-599
58%
500-549
42%
Below 500
8%

Source: MFE internal funding data, January 2025 - April 2026. n=1,000+ approved/declined applications.

Average Funding Amount by Industry

Industries vary widely in capital needs. Here's the average approved funding amount by sector:

IndustryAvg Approved AmountMost Common ProductApproval Rate
Restaurant & Food Service$87,400MCA / Working Capital78%
Construction & Trades$142,800Equipment Financing83%
Trucking & Transportation$94,200Invoice Factoring + Equipment81%
Medical & Dental$215,600Equipment Financing87%
Retail & eCommerce$58,300Working Capital / Line of Credit74%
HVAC & Home Services$68,500Working Capital / Equipment79%
Manufacturing$185,000Equipment Financing85%
Professional Services$45,200Working Capital / LOC76%
Beauty & Salon$38,900Working Capital / Equipment72%
Auto Repair$72,400Equipment / Working Capital80%

Source: MFE internal funding data, May 2025 - April 2026. n=1,000+ approved applications. Median revenue per applicant: $32,400/month.

Time-to-Funding Benchmarks

Decision and funding speed by product type — actual median times in our 2025-2026 data:

ProductMedian DecisionMedian FundingEnd-to-End
Merchant Cash Advance4 hours1 business day1.2 days
Working Capital18 hours2 business days2.5 days
Line of Credit24 hours2-3 business days3.1 days
Invoice Factoring22 hours1-2 business days2.4 days
Equipment Financing26 hours3 business days3.8 days
Revenue Based Financing30 hours3 business days4.1 days
All products combined22 hours2 business days2.4 days

Comparison: Traditional bank business loans averaged 47 days end-to-end in 2025 (per Federal Reserve Small Business Credit Survey 2025).

Geographic Distribution

Top 10 states by funding volume in our 2025-2026 dataset:

Florida
18.2%
Texas
14.1%
California
10.8%
New York
7.9%
Georgia
5.4%
Illinois
4.6%
North Carolina
4.2%
Pennsylvania
3.8%
Arizona
3.5%
Ohio
3.1%

FL + TX + CA represent 43% of all funded businesses, reflecting Hispanic-owned business density and small business growth in Sun Belt states.

Borrower Demographics

Demographic% of Approved ApplicantsYoY Change
Hispanic-owned34%+8%
Black-owned16%+3%
Women-owned28%+5%
Veteran-owned9%+1%
ITIN-only owner23%+12%
Spanish-language application19%+41%
First-generation business owner62%+4%

The Bank Coverage Gap

Per the Federal Reserve's 2025 Small Business Credit Survey, only 36% of small businesses that applied for financing at a large bank were fully approved. For Black-owned businesses, that number drops to 16%. For Hispanic-owned businesses, it's 24%.

Our data reinforces this gap. 52% of our approved applicants had been declined by at least 2 prior lenders before applying with us. Most cited reasons:

Alternative lenders fill this gap by weighting cash flow over credit score, accepting collateral substitutes (equipment as collateral, accounts receivable as collateral), and underwriting based on bank statement data rather than tax returns.

Methodology

This report aggregates funding data from 1,000+ approved business funding applications processed by Merchant Fund Express between May 2025 and April 2026. Data points include applicant FICO score, time in business, monthly revenue, requested vs approved amount, product type, and demographic information (where voluntarily disclosed).

Geographic distribution reflects MFE's serving footprint across all 50 U.S. states. Industry classifications follow NAICS codes. Demographic data is self-reported and voluntary; not all applicants provide demographic information. Federal Reserve comparisons cite the 2025 Small Business Credit Survey published by the 12 Federal Reserve Banks.

How to Cite This Report

This report is published under Creative Commons Attribution 4.0 (CC-BY 4.0). You may quote, embed, and reuse — please cite:

Chen, D. (2026). The 2026 Small Business Funding Report.
Merchant Fund Express. Retrieved from
https://merchantfundexpress.com/research/

For media inquiries, custom data pulls, or interview requests: /press/ or info@merchantfundexpress.com.

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