The three qualification tiers
Before talking about specific numbers, you need to know which type of line of credit you're actually applying for. Requirements differ dramatically across the three lender categories:
| Type | Typical Credit | Time in Biz | Min Revenue | Rate Range |
|---|---|---|---|---|
| Traditional bank LOC | 680+ | 2+ years | $500K+ | 9–12% |
| SBA Express LOC | 640+ | 2+ years | $250K+ | 11–14% |
| Online / alternative LOC | 580–650 | 6+ months | $100K+ | 15–25% |
If you meet bank qualifications, start there — the rate is materially lower. If you don't, SBA Express is the middle path. Only go to online/alternative when speed or credit flexibility matters more than rate.
Personal credit requirements
Every 20%+ owner of the business gets a personal credit pull. The lender typically uses the middle of three bureau scores. Here's what each tier accepts:
Traditional banks
A personal FICO of 680 is the hard floor at most banks. 720+ gets you the best rates. Below 680, you'll generally be declined without even a deep look at the business financials. Banks occasionally approve 660s for existing customers with deposit relationships.
SBA Express
The SBA doesn't set a hard credit minimum, but most SBA lenders want 640+ with 680+ preferred. The SBA guarantee lets lenders go slightly lower than they would on their own paper, but "slightly lower" means 20–30 points, not 100.
Online / alternative
Most online lenders work with 580+. Some operate down to 500s for specific products, though rates get steep at those tiers. The business bank account cash flow often matters more than credit score for these lenders — they use automated underwriting off of your bank statements.
Time in business
Lines of credit are harder to get than term loans for newer businesses because lenders worry about the revolving nature of the facility — you could theoretically keep the line fully drawn forever. Most want to see operating history.
- Banks: 2–3 years minimum. Some require 5+ years for larger limits.
- SBA Express: 2+ years preferred. Startups with strong personal credit occasionally qualify.
- Online lenders: 6 months minimum for most. Some work with 3 months for specific products.
- Fundbox, Lendio aggregators: sometimes as low as 3 months for small lines ($10K–$50K).
If you're under 12 months old, focus on online lenders first, and plan to refinance to a bank line once you cross the 24-month mark.
Revenue and cash flow requirements
Three revenue-based metrics underwriters watch:
Annual revenue
- $100K–$250K — online lenders only; limits typically $10K–$50K
- $250K–$500K — online + some SBA; limits $25K–$150K
- $500K–$1M — banks start here; SBA Express strong; limits $50K–$250K
- $1M+ — banks actively want your business; limits $100K–$500K+
- $5M+ — large bank lines of credit ($500K–$5M+ limits)
Revenue trend
Lenders compare the last 2–3 years. Flat revenue is acceptable. Growing revenue is preferred. Declining revenue triggers additional questions and often lower limits. If you're in a temporary down year, have a written narrative ready explaining why and what's changing.
Monthly deposit consistency
For online lenders especially, monthly bank deposit totals matter as much as annual revenue. Deposits should be relatively consistent month-to-month. A business with $600K annual revenue that deposits $80K one month and $12K the next will be treated more cautiously than a business depositing $50K every month.
Business financial health
Beyond revenue, lenders evaluate:
Debt service coverage
Can your business cash flow cover existing debt plus the proposed new line if fully drawn? The formula is DSCR = (net income + depreciation + interest) / total annual debt service. Above 1.25 is the typical approval zone; 1.50+ is strong.
Current ratio
Current assets divided by current liabilities. Above 1.0 is the floor. Above 1.5 is strong. Lines of credit are used for working capital, so lenders want to see the business already manages working capital well.
Gross margin stability
Large year-over-year gross margin swings signal pricing or cost issues. Stable or improving margins signal operational discipline.
Bank statement cleanliness
Online lenders especially scrutinize bank statements. Red flags: multiple NSFs in the last 6 months, frequent overdrafts, daily balances below $1,000 for extended periods. Clean statements are required; scrub personal expenses from business accounts before applying.
If you currently have one or more merchant cash advances with daily or weekly ACH payments, most bank and SBA lenders will decline your line of credit application until those MCAs are paid off. Plan the sequence carefully, or work with a broker who can structure a consolidation.
What you'll need to provide
Documentation scales with the loan size and lender type. A $25K online line may only require 3 months of bank statements. A $500K bank line requires the full package below:
For online/alternative (fast track)
- Last 3–6 months of business bank statements (sometimes automated via Plaid)
- Business tax ID and basic business info
- Personal details for credit pull
- Sometimes: most recent business tax return
For SBA Express (middle tier)
- Last 2–3 years of business tax returns
- YTD profit & loss and balance sheet
- SBA Form 1919 and Form 413 (Personal Financial Statement)
- Personal tax returns for each 20%+ owner
- Business debt schedule
- 3 months of business bank statements
- Use-of-funds narrative
For traditional bank lines (deepest)
- All SBA Express documents above
- 3 years of business tax returns (sometimes CPA-reviewed interims)
- Accounts receivable and accounts payable aging
- Complete corporate documents (articles, operating agreement, bylaws)
- Personal tax returns (3 years)
- Interim financials (signed by preparer)
- Deposit account relationship (some banks require)
Not sure which tier you qualify for?
Our funding specialists pre-qualify you across all three lender types with a single soft credit pull — no multiple applications required.
How to improve your approval odds before applying
Three moves that materially improve approval odds and unlock better rates:
1. Pay down revolving credit
The single fastest score lever. Bring revolving utilization below 30% of available limits. A 40–60 point FICO improvement in 60–90 days is common.
2. Clean up bank statements
Look at your last 6 months of business bank statements the way an underwriter will. Any NSFs? Any sustained days below $1,000? Any large personal transfers mixed in? Fix the behavior and let 3 clean months accumulate before applying.
3. Reduce existing business debt
Every existing loan payment reduces your debt service coverage ratio. Paying off a $50K equipment loan you could have paid off two months ago might move your DSCR from 1.15 to 1.35 and flip you from decline to approval.
What to do if you're denied
Denial from one lender rarely means denial from all. The typical sequence:
- Get the specific denial reason in writing. Federal law requires this (Regulation B / ECOA).
- Match the denial reason to the fix. Credit score? Wait 3–6 months. DSCR? Pay down debt. Bank statement issues? Clean up and wait.
- Try a different lender tier. Declined by a bank at 670 FICO? Apply to SBA Express or an online lender.
- Consider alternative products. Equipment financing, short-term working capital, or invoice factoring may fit your profile when a line of credit doesn't.