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#The four pillars of small business underwriting
Every small business lender, from a community bank writing SBA paper to a non-bank funder, weighs the same four inputs when deciding whether to make an offer and how to size it. Knowing what they look at lets you pre-empt the weak spots in your file before an application goes in.
#1. Revenue
Revenue is the foundation. Most funders want to see at least four months of steady business bank deposits, with a minimum of roughly $15,000/month for revenue-based products and $25,000–$50,000/month for term loans and lines of credit. Consistency matters more than spikes, a business that deposits $30K every month will often outscore a business that averages $40K but with two months under $15K.
The fastest way to strengthen this pillar is to run every dollar of revenue through a dedicated business bank account. Cash deposits are fine; personal-account co-mingling is not, because it makes underwriters guess at true business volume.
#2. Time in business
Most non-SBA products require at least six months in business. SBA 7(a) requires two years. The EIN issuance date or state formation date, whichever is earlier, sets the clock. If you bought an existing business, the prior owner's operating history can sometimes be assigned via asset purchase documentation.
#3. Personal credit
Personal FICO is pulled via soft inquiry during underwriting for most non-bank products and a hard pull at offer acceptance. ICG accepts 500+ for revenue-based products; most banks want 680+; SBA routinely looks for 700+. If your FICO is below 600, focus on getting revolving utilization under 30% and clearing any open collections before applying.
#4. Debt service capacity
Lenders calculate debt service coverage, how much free cash flow covers existing and proposed debt payments. A DSCR of 1.25 or higher is the target. If you already carry two or three short-term advances, consolidating them into a single longer-term product before applying for new capital often unlocks better offers.
#What to have ready before applying
- Three to six months of business bank statements (PDF from your bank's online portal, not screenshots)
- Business tax ID (EIN) and formation state
- A voided business check for ACH verification
- A basic debt schedule listing every existing loan, advance, line of credit, or equipment lease
#When to apply
Apply when you know what the capital is for and have a plan to deploy it within 30 days of funding. The cost of sitting on undeployed capital, factor rate or interest clock running, erodes the economic benefit quickly. Revenue-based funding and bridge capital are built for tight deployment windows; SBA term loans are built for longer horizons.
ICG Funding has helped thousands of small businesses qualify and fund. If you're ready to see real numbers, apply here, the application is quick and we soft-pull credit only.
Common questions
Answers, before you ask.
QWhat credit score do I need to qualify for a small business loan?
It depends on the product. ICG accepts personal FICO scores of 500 or higher for revenue-based products, most banks want 680 or higher, and SBA loans routinely look for 700 or higher.
QHow much monthly revenue do lenders want to see?
Most funders want at least four months of steady business bank deposits averaging roughly $15,000 per month for revenue-based products, and $25,000 to $50,000 per month for term loans and lines of credit.
QHow long do I need to be in business to get funding?
Most non-SBA products require at least six months in business. SBA 7(a) requires two years. The clock starts at the EIN issuance date or state formation date, whichever is earlier.
QWhat documents do I need before I apply?
Have three to six months of business bank statements as PDFs from your bank portal, your business EIN and formation state, a voided business check for ACH verification, and a debt schedule listing every existing loan, advance, line of credit, or equipment lease.
QWhat is debt service coverage and why does it matter?
Debt service coverage is how much free cash flow covers existing and proposed debt payments. Lenders target a DSCR of 1.25 or higher, so consolidating existing short-term advances before applying often unlocks better offers.
QDoes applying hurt my personal credit?
Most non-bank products use a soft credit inquiry during underwriting and only a hard pull at offer acceptance. ICG soft-pulls credit during the quick application.
QCan I qualify if I bought an existing business?
Yes. The prior owner's operating history can sometimes be assigned to you via asset purchase documentation, which can satisfy the time-in-business pillar.
QShould I run revenue through my personal account?
No. Run every dollar of revenue through a dedicated business bank account. Personal-account co-mingling forces underwriters to guess at true business volume and weakens the revenue pillar.
Sources
Where this comes from.
Primary sources cited in this guide. We link to regulators, federal agencies, and peer-reviewed data rather than secondary commentary.
- 17(a) loans
U.S. Small Business Administration
- 2SOP 50 10: Lender and Development Company Loan Programs
U.S. Small Business Administration
- 3Small Business Lending
Office of the Comptroller of the Currency
- 4Get an Employer Identification Number (EIN)
Internal Revenue Service
- 5About Form 4506-T, Request for Transcript of Tax Return
Internal Revenue Service
- 6October 2024 Senior Loan Officer Opinion Survey on Bank Lending Practices
Board of Governors of the Federal Reserve System
Written by
Elliot BaucheFounder of ICG Funding. Specialises in small business capital. Revenue-based funding, term loans, lines of credit, and SBA programs for owners with under $5M in annual revenue.
How we write and reviewTagged
- qualification
- underwriting
- credit
- revenue