How Much Business Loan Can I Qualify For?

The amount you can borrow depends on your revenue, credit score, time in business, and the type of financing you're pursuing. 

Most lenders use a multiple of your monthly or annual revenue as a starting point. A common formula is 10% to 30% of annual revenue for term loans, though this varies significantly by lender. 

If your business brings in $500,000 a year, you might qualify for $50,000 to $150,000 depending on other factors. 

Stronger credit, longer time in business, and available collateral push you toward the higher end. Weaker profiles push you lower.

How Lenders Calculate Your Maximum Loan Amount

There's no single formula every lender uses, but most consider the same core factors. Understanding how they think helps you estimate what you'll qualify for.

Revenue-Based Calculations

Revenue is the foundation. Lenders want to know you can afford the payments, and your revenue determines that capacity.

Common approaches include:

Percentage of annual revenue. Many lenders cap loans at 10% to 30% of your annual revenue. A business generating $300,000 per year might qualify for $30,000 to $90,000 under this method.

Multiple of monthly revenue. Some lenders express limits as a multiple of monthly revenue. A limit of "up to 2x monthly revenue" means a business with $50,000 in monthly sales could access up to $100,000.

Debt service coverage ratio (DSCR). More sophisticated lenders calculate whether your cash flow can cover the proposed loan payments plus your existing debt obligations. They typically want to see DSCR of 1.25 or higher, meaning your available cash flow is at least 125% of your total debt payments.

According to the Federal Reserve's 2024 Small Business Credit Survey, the median loan amount for small businesses that received financing was $100,000. But that median hides enormous variation. Businesses with higher revenue and stronger profiles borrow significantly more.

Credit Score Impact

Your credit score affects both approval odds and loan amounts.

Higher scores signal lower risk. Lenders are more comfortable extending larger amounts to borrowers with 720+ credit scores than to those with 620 scores. The difference can be substantial.

Here's a rough illustration of how credit score might affect maximum loan amounts for a business with $400,000 in annual revenue:

These numbers are illustrative, not guarantees. Every lender weighs factors differently. But the pattern holds: better credit unlocks higher amounts.

Time in Business

Newer businesses represent more risk. Without track record, lenders can't predict how you'll perform through slow seasons, economic downturns, or unexpected challenges.

Most lenders have minimum time-in-business requirements:

1. Under 6 months: Very limited options. Merchant cash advances or microloans might be available.
2. 6 months to 1 year: Some online lenders will work with you. Expect lower limits.
3. 1 to 2 years: More options open up. Still considered relatively new.
4. 2+ years: Full range of options available. Banks and SBA lenders become accessible.

A two-year-old business with $300,000 in revenue will typically qualify for more than a six-month-old business with the same revenue. The additional history reduces perceived risk.

Existing Debt

Lenders look at your total debt picture, not just the loan you're applying for. If you're already carrying significant debt, your capacity for additional borrowing decreases.

They'll calculate your debt-to-income ratio and assess whether adding a new loan payment is sustainable. Heavy existing debt can either reduce your maximum loan amount or disqualify you entirely.

Before applying for new financing, consider paying down existing balances. Lower debt means more room for new borrowing.

Maximum Loan Amounts by Loan Type

Different financing products have different ceilings.

Term Loans

Bank term loans: Up to $5 million or more for well-qualified businesses. Banks can go higher for exceptional borrowers with strong collateral.

Online term loans: Typically $5,000 to $500,000. Some online lenders go up to $1 million for established businesses with strong revenue.

SBA loans: Up to $5 million for most SBA 7(a) loans. The SBA 504 program for real estate and equipment can go higher.

For short-term loans, amounts tend to be smaller because the compressed repayment timeline limits how much you can handle. Long-term loans spread payments over years, allowing for larger amounts.

Lines of Credit

Business lines of credit range from $5,000 to $5 million depending on the lender and your qualifications.

Online lenders typically offer lines from $5,000 to $250,000. Banks offer higher limits to established customers, sometimes $500,000 to several million.

Lines of credit are often sized based on your working capital needs rather than a strict revenue multiple. A business that needs to cover regular cash flow gaps might get a line equal to one to two months of expenses.

Merchant Cash Advances

MCAs typically range from $5,000 to $500,000. The amount is based almost entirely on your sales volume.

A common formula is 100% to 150% of monthly credit card sales or bank deposits. If you process $40,000 per month in credit card transactions, you might qualify for an advance of $40,000 to $60,000.

Because MCAs have such short effective repayment periods, taking the maximum available isn't always wise. The payments can strain cash flow even if you technically qualify.

Invoice Factoring

With factoring, the "loan amount" is really about how much of your receivables you can convert to cash. Factoring companies typically advance 80% to 90% of invoice value.

If you have $200,000 in outstanding invoices from creditworthy customers, you could potentially access $160,000 to $180,000 through factoring. The limit scales with your receivables.

Learn more about how this works in our guide to invoice factoring.

Equipment Financing

Equipment loans are typically sized to cover the cost of the equipment being purchased, up to 100% of the purchase price. Some lenders finance up to 125% to cover soft costs like installation and training.

The equipment itself serves as collateral, which makes lenders more comfortable with higher amounts relative to your revenue than they'd be with unsecured financing.

Quick Estimation Methods

Want a rough idea of what you might qualify for? Here are some quick calculations.

The 10% Rule (Conservative)

Take your annual revenue and multiply by 10%. This gives you a conservative estimate of what most lenders would consider reasonable.

$300,000 annual revenue × 10% = $30,000

This is a floor, not a ceiling. Many businesses qualify for more. But if you're looking for a number you can probably get, 10% of revenue is a safe assumption.

The Monthly Revenue Multiple (Moderate)

Take your average monthly revenue and multiply by 1 to 2.

$25,000 monthly revenue × 1.5 = $37,500

This method aligns with how many online lenders think about limits. It gives you a moderate estimate.

The DSCR Method (Precise)

This requires more calculation but gives a more accurate picture.

1. Calculate your monthly net operating income (revenue minus operating expenses, before debt payments)
2. Determine the monthly payment on the loan amount you're considering
3. Divide net operating income by total debt payments (existing plus proposed)
4. If the result is 1.25 or higher, you can likely support that loan amount

Let's say your monthly net operating income is $15,000 and your existing debt payments are $3,000.

Available for new debt: $15,000 ÷ 1.25 = $12,000 maximum total debt service New loan payment capacity: $12,000 - $3,000 = $9,000 per month

A $9,000 monthly payment over 3 years at 15% interest supports a loan of roughly $250,000.

This method is what banks and sophisticated lenders actually use. It accounts for your real capacity to repay.

Factors That Increase Your Maximum Amount

Several things can push your qualification higher.

Strong Cash Flow

Consistent, healthy cash flow matters more than raw revenue. A business with tight margins might have impressive top-line revenue but limited ability to service debt. A business with strong margins has more room to borrow.

Bank statements showing steady deposits, minimal overdrafts, and healthy ending balances signal a business that can handle loan payments.

Collateral

Offering collateral reduces lender risk. In return, they'll often extend larger loan amounts.

Real estate, equipment, inventory, and accounts receivable can all serve as collateral. The value of what you pledge directly affects how much additional you might qualify for.

If you're seeking a larger loan, consider whether you have assets to offer. The difference between a secured and unsecured loan can be significant.

Industry

Some industries are viewed more favorably than others. Stable, predictable industries like healthcare, professional services, and government contracting often qualify for higher amounts than volatile industries like restaurants, construction, or retail.

Multiple Revenue Streams

A business with diverse income sources is less risky than one dependent on a single customer or product line. Diversification supports higher loan amounts because there's less chance that one setback wipes out your ability to repay.

Clean Financials

Organized, accurate financial records signal a well-run business. If you can produce clean profit and loss statements, balance sheets, and tax returns that all tell a consistent story, lenders gain confidence.

Messy or inconsistent financials raise questions. Questions lead to lower amounts or rejections.

Factors That Decrease Your Maximum Amount

These things work against you.

Low or Inconsistent Revenue

If your revenue fluctuates wildly or has been declining, lenders get nervous. They'll reduce the amount they're willing to extend.

Seasonal businesses often face this challenge. Revenue that's $100,000 one month and $20,000 the next makes payment capacity hard to predict. Lenders respond by being conservative.

Poor Credit History

Credit problems limit your options and amounts. Bad credit doesn't necessarily disqualify you, but it does cap how much lenders will risk on you.

Recent bankruptcies, defaults, or collections are particularly damaging. Even if you've recovered, lenders may limit amounts for several years afterward.

Heavy Existing Debt

Every dollar of existing debt reduces your capacity for new borrowing. If you're already stretched thin, lenders won't pile more on.

Debt-to-income ratios above 40% to 50% start to cause problems. Above that level, lenders either reduce amounts significantly or decline the application.

Short Time in Business

Newer businesses qualify for less. Without history demonstrating how you handle challenges, lenders keep their exposure limited.

There's not much you can do about this except keep operating successfully. Time is the remedy.

High-Risk Industry

Restaurants, startups, entertainment venues, and certain retail categories face tougher scrutiny. Lenders see more failures in these industries and respond by limiting amounts.

If your industry works against you, you'll need especially strong performance on other factors to offset the concern.

How to Maximize Your Loan Amount

Want to qualify for the highest amount possible? Here's what to focus on.

Improve Your Credit Score

This is the highest-leverage move for most borrowers. Even a 50-point improvement can meaningfully increase your maximum loan amount.

Pay down credit card balances. Make all payments on time. Dispute any errors on your credit report. These actions compound over time.

Increase Revenue Before Applying

If you can delay your application by a few months while growing revenue, you'll likely qualify for more. Revenue is the primary driver of loan amounts.

Even showing a strong trend matters. Three months of growing revenue looks better than three months of decline, even if the totals are similar.

Pay Down Existing Debt

Lower debt means more borrowing capacity. If you're carrying balances you could pay off, doing so before applying improves your profile.

This is especially true for high-interest debt like credit cards. Eliminating those payments frees up cash flow for new loan payments.

Organize Your Financials

Clean, professional financial documents signal a well-run business. If your bookkeeping is a mess, fix it before applying.

At minimum, have current profit and loss statements, a balance sheet, and three to six months of bank statements ready. Being able to produce these quickly shows you run a serious operation.

Consider Collateral

If you have assets to pledge, secured financing opens up higher amounts. Even if you prefer unsecured options, knowing collateral is available gives you leverage.

Apply to Multiple Lenders

Different lenders have different models. One might offer $50,000 while another offers $80,000 to the same applicant. Shopping around reveals your true maximum.

Just be mindful of hard credit inquiries. Too many in a short period can ding your score.

Ask About Combination Products

Sometimes the answer isn't one large loan but multiple smaller products. A term loan plus a line of credit might get you the total funding you need when neither alone would reach that level.

Discuss your total funding needs with lenders. They may have creative solutions.

What If You Don't Qualify for Enough?

If the amount you qualify for falls short of what you need, you have options.

Adjust your plans. Can you accomplish a scaled-down version of your goal with less capital? Sometimes starting smaller and growing makes more sense than waiting for a larger loan.

Stack financing. Multiple smaller products can add up to what you need. A $40,000 term loan, a $25,000 line of credit, and $15,000 in equipment financing equals $80,000 total.

Find a co-signer or partner. Adding someone with stronger credit or more assets can increase what you qualify for.

Build your profile first. If you're not in a rush, spend six months to a year improving your revenue, credit, and financials. Then reapply when your profile is stronger.

Explore alternative funding. Investors, crowdfunding, revenue-based financing, or grants might fill the gap that traditional loans can't.

Frequently Asked Questions

How much can I borrow with a 650 credit score?

With a 650 score, you'll have access to online lenders and some business financing, but amounts will be limited compared to higher scores. Expect maximums in the range of 10% to 15% of annual revenue. A business with $400,000 revenue and a 650 score might qualify for $40,000 to $60,000 from online lenders.

Can I get a $100,000 business loan?

Yes, if your business profile supports it. Generally, you'd need annual revenue of at least $300,000 to $500,000, depending on the lender. Strong credit (700+) and at least two years in business significantly improve your chances of reaching $100,000.

How do lenders verify my revenue?

Most lenders review your business bank statements, typically three to six months. They look at deposits to verify revenue claims. Some also request tax returns, especially for larger loans. Connecting your bank account electronically for automated analysis is increasingly common.

Can I qualify for more than my annual revenue?

In some cases, yes. Equipment financing for expensive machinery might exceed annual revenue because the equipment serves as collateral. SBA loans for real estate can be quite large relative to revenue. But for unsecured loans and general working capital, amounts rarely exceed 25% to 30% of annual revenue.

Does the loan purpose affect how much I can get?

Sometimes. Equipment purchases secured by the equipment itself may qualify for more than unsecured working capital requests. Real estate financing operates under different guidelines than general business loans. Lenders also look more favorably on loan purposes that will generate return, like revenue-producing equipment, versus those that won't directly increase income.

How quickly can I apply for a larger amount if I'm declined?

It depends on why you were declined. If it was a recent credit event, you may need to wait until that ages off or its impact diminishes (often 12-24 months). If it was insufficient revenue, you can reapply once your revenue has grown meaningfully. If it was documentation issues, you could potentially reapply quickly after addressing those gaps.