A US lender looks at three things before it extends a small business a line of credit. These are the credit behind the firm, its business history and its finances. Each lender sets its own bar, and the bars differ a lot.
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What the credit reports show
Fit Small Business says a credit report shows lenders how much debt a business carries and how it handled past loan payments. It also hints at whether the owner will keep paying on time. That data feeds a credit score, a number meant to show overall credit risk.
Why age matters
The length of time a company has traded can decide which loan programmes and rates it can get. Startups under two years old fail often, and lenders know it. That makes qualifying harder for them.
BestMoney expects a borrower to show good credit and a sound balance sheet. It also puts the likely floor at two years of trading. Other lenders ask for less. Finder lists three lenders with minimums of six months, 12 months and one year.
How revenue gets tested
Revenue is the main source of repayment, so lenders look closely at it. Fit Small Business says they review income trends, annual revenue and a financial ratio analysis.
Finder’s table shows how widely the floors vary. Its three lenders ask for annual revenue of $60,000, $180,000 or $240,000, and minimum credit scores of 550, 580 or 600. The strictest lender on revenue is not the strictest on credit score.
What you hand over
BestMoney says the usual pack starts with the lender’s own application form. Two years of tax returns follow, one set for the business and one for the owner.
Lenders also want financial statements. BestMoney names the balance sheet, the profit and loss statement, an A/R and AP aging report and a debt schedule. A secured line needs proof of collateral on top.
Secured or unsecured
A secured line is backed by collateral that the lender can take if the borrower defaults. Because the lender has more ways to recover its losses, the risk is lower and so are interest rates. Checking the collateral’s value slows funding.
An unsecured line has no collateral, so the lender takes on more risk. Funds can arrive faster, rates tend to be higher, and lenders focus more on whether you can repay. BestMoney adds that you may need better credit to qualify for one.
What the lender then decides
Once the application is in, the lender weighs it and the documents and decides on eligibility. If it approves, the credit limit and interest rate depend on the firm’s age, income, credit and overall financial health. A well-established firm with strong financials could win a larger line at a lower rate. A newer or weaker firm may get a smaller limit and a higher rate.
Finder says business lines of credit typically carry limits between $1,000 and $250,000. BestMoney cites the Federal Reserve’s 2026 Small Business Credit Survey, which found that about 38% of small firms had sought financing of some kind in the previous year.
What it costs once you have it
Qualifying is not the end of the checking. Fit Small Business warns that some lenders charge inactivity fees on a line left unused for a set period, and others charge a fee on each draw. It says repayment terms on small business credit lines rarely exceed 36 months.
Finder gives a shorter figure. It says lines of credit typically run for 24 months or less, and may require daily or weekly repayments. It adds that approval and funding can take one to two business days at some lenders and up to two weeks at others.
