For business loan brokers: This guide explains Business Loan Requirements: A Brokerβs Qualification Checklist through the lens of evaluating a clientβs situation, preparing the file, and discussing financing options clearly.
By Kaylan Pepin, CPA, CMA, Co-founder and CEO of Levr.ai. Kaylan spent his career in commercial banking at RBC, CIBC, and BDC before building Levr.
Most declined applications were never going to be approved, because the business did not meet that lender’s minimums in the first place. Knowing the requirements before the client apply saves the client the inquiry, the wait, and the discouragement. Here is what lenders actually look at.
The four things almost every lender checks
1. Time in business. Online working capital lenders often want 6 to 12 months. Banks and SBA-style programs usually want two years or more. True startups have a harder road, which we cover in getting a startup loan.
2. Revenue. Minimums vary widely. Many online lenders start around 10,000 to 20,000 dollars in monthly revenue. Larger products want more history and more volume. Lenders care about consistency as much as size, since steady deposits show a loan can be serviced.
3. Credit. For most small business loans the owner’s personal score matters. Roughly: 500s can still qualify for revenue-based products at higher cost, 600s open up most online lenders, 680 plus is where banks and the best pricing live. Weak credit narrows options but rarely closes all of them. See our bad credit guide.
4. Documents. Bank statements, year-end financials, and sometimes tax returns. Clean, complete documents are half the battle, and here is the full list of what to prepare.
Requirements vary a lot by product
A merchant cash advance weighs card sales. Invoice financing weighs the client’s customers’ creditworthiness, not the client’s. Equipment financing leans on the asset. A bank term loan weighs everything. That is why the same business can be declined by one lender and welcomed by another on the same day. Browse the differences across our loan types guide.
Where are the client actually eligible?
This is the matching problem, and it is exactly what Levr does. Tell us about the client’s business once, and we show the client only the lenders whose boxes the client fit, across the US and Canada, with no credit check to look. If a lender is not a match, the client will know why, whether that is revenue, region, or time in business, so the client can target the right product instead of guessing. And if the client has been declined before, read why loans get declined, because the reason is usually fixable.
Quick answers
Can a client get a business loan with less than a year in business? Often yes, through revenue-based products, if the client’s monthly deposits are consistent. Traditional term loans usually want longer.
What credit score Does a client need? There is no single number. 600s cover most online lenders, 680 plus for banks, and some products barely weigh the client’s score at all.
Do lenders in Canada and the US have different requirements? The mechanics are the same, though programs differ, for example SBA in the US and CSBFP in Canada. Levr matches across both markets.
Find out which lenders the client’s business qualifies with, free and with no credit check. Get started free.
This article is for general education, not financial advice. Every business is different, so talk to the client’s accountant or financial advisor about the client’s specific situation.
Brokering a client financing request? Compare every business loan type, or see how Levr matches the client’s business to lenders.
How brokers can use Levr
Levr supports business loan brokers as they organize client information, prepare applications, manage documents and communication, and move deals through their lending workflow.
