Business Loans You Can Get After 6 Months in Operation

Lenders use your time in business to help evaluate your risk level — the longer you’ve been operating, the more likely you’ll be able to repay your debts. Some loans are available to businesses with three to six months in operation. However, more choices will open up at the one-year mark, as this amount of time demonstrates to lenders that you have staying power.

Of course, time in business isn’t the only factor lenders will use to evaluate your loan application. They’ll also consider your personal credit score and revenue. If you have strong finances and credit, it can help you qualify for a loan, even if your business is new.

Online lenders tend to have flexible qualification requirements and may be able to work with businesses with three to six months of operating history. But these lenders will often charge higher interest rates and offer smaller loan amounts, as well as shorter repayment terms.

Alternative lenders may offer a variety of loan types, such as:

Among these options, equipment financing, invoice factoring and merchant cash advances may be more available to newer businesses. These types of financing are backed directly by the asset or sales they’re tied to — the equipment you’re purchasing, your outstanding invoices or your future credit card sales — making lenders more willing to work with a shorter time in business.

Nonprofit community lenders often focus their lending efforts on traditionally underserved businesses, such as startups, borrowers with lower credit scores and those located in low-income communities.

Compared to online lenders, community organizations can be slower to fund but may offer more competitive interest rates and repayment terms. They also typically provide business training, coaching and other resources, which can be particularly helpful for entrepreneurs who are just starting out.

If you already have a relationship with a bank, especially a local institution, ask about their business loan options. A bank may be more flexible with its requirements if you’re an established customer.

Compared to online and community lenders, banks will likely offer the most competitive rates and terms. However, they are slower to fund and you’ll need to show strong credentials (e.g., credit score, revenue, collateral).

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Expansion Capital Group offers fast, same-day funding. The company has a simple and streamlined application process and may be able to issue funding within hours after you sign your agreement.

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If you have at least six months in business, there are a few actions you can take to improve your chances of getting financing:

Think about your financing needs: Can you wait another six months to apply for a loan? Although this isn’t a viable option for every business, waiting until you’ve reached the one-year mark may open up more loan options — and help you access better rates and terms.

Showing a lender that you have strong business revenue can improve your chances of getting a loan. To do this, you’ll need to provide business bank statements and financial statements. You should make sure all of your documents are accurate and up to date. Not only will this speed up the application process, but it will also help prevent automatic rejections from lenders that are using automated underwriting technology.

Even if you’re still building your revenue, you can include documents that will help strengthen your application. You might provide sales projections, as well as a well-organized business plan that demonstrates your company’s ability to meet its financial goals.