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When you apply for a business loan, most lenders require that your business have a certain amount of revenue. While this helps to protect lenders, it also makes getting access to capital difficult for some businesses. You may struggle to find a loan to help you get your business off the ground before you’ve really started bringing in revenue.
To create our list of business loans with low revenue requirements, we collected hundreds of data points across more than 20 business loan lenders. We evaluated nearly 30 factors, including interest rates, fees, loan amounts, borrower requirements, regional availability, and more.
Business Loans With Low Revenue of 2023
- Best for Micro-Businesses: American Express
- Best for Low Credit: Lendio
- Best for Young Businesses: Fundbox
- Best for Maturing Businesses: Bank of America
- Best Fintech Lender: OnDeck
Best for Micro-Businesses : American Express
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American Express
- Minimum Annual Revenue: $36,000
- Loan Amounts: $2,000–$250,000
- Loan Terms: 6-18 months
Low monthly revenue requirement
No loan origination or prepayment fees
Wide range of loan amounts
Fee for each month with an outstanding balance
Short repayment terms
Minimum $10,000 loan for 12- and 18-month terms
American Express Blueprint—formerly known as Kabbage—is great for micro-businesses, thanks to its low annual revenue requirement. You’ll only need an average monthly revenue of $3,000, which comes to an annual revenue of $36,000.
We also like American Express for its wide range of loan amounts. Business lines of credit are available in amounts ranging from $2,000 to $250,000. However, the amount you can borrow is partially determined by your repayment term. Repayment terms only go up to 18 months, and if you want to repay your line of credit over 12 or 18 months, you’ll have to borrow at least $10,000.
American Express Blueprint lines of credit are available to borrowers in all 50 states who meet the following requirements:
- In business for at least one year
- FICO score of at least 640
- Average monthly revenue of at least $3,000
Best for Low Credit : Lendio
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Lendio
- Minimum Annual Revenue: $96,000
- Loan Amounts: $5,000–$10,000,000
- Loan Terms: 30 days–25 years
Many different lenders and loan types
Wide range of loan amounts
Available to borrowers with fair credit
Not a direct lender
Interest rates, fees, and terms vary by lender
Long funding times for some loans
Lendio isn’t actually a lender but a loan marketplace. It helps match business borrowers with more than 75 lenders. Lendio’s partner lenders offer loans such as:
- Accounts receivable funding
- Business lines of credit
- SBA loans
- Short-term loans
- Business term loans
- Business cash advances
- Equipment financing
- Commercial mortgages
- Startup loans
- Business acquisition loans
- Business credit cards
Thanks to the many different loan options, nearly any business can find one that works for them. Loans come in all different amounts and terms.
And unlike many other lenders, some of Lendio’s partner lenders offer loans to business owners with credit scores as low as 600. That means even if you have a spotty credit history, you can still get the financing you need for your business.
Because Lendio works with so many different partner lenders, the requirements for any given loan vary. However, Lendio recommends that prospective borrowers meet the following baseline requirements:
- In business for at least six months
- FICO score of at least 600
- Monthly revenue of at least $8,000
Best for Young Businesses : Fundbox
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Fundbox
- Minimum Annual Revenue: $100,000
- Loan Amounts: Up to $150,000
- Loan Terms: 12 or 24 weeks
Available to young businesses
Fast funding within one business day
Available to borrowers with fair credit
Short repayment terms
Lower credit limit than competitors
Weekly fees during repayment
Unlike many lenders, Fundbox happily serves businesses in their first year of business. You’ll only need three months in business to qualify for a line of credit. And as an added bonus, you only need a personal FICO score of 600 to borrow funds, meaning even business owners with fair credit can qualify.
It’s worth noting that while there are loans available for fair-credit borrowers and new businesses, you won’t be able to borrow as much money as you could with other lenders, or borrow it for as long. Fundbox’s lines of credit max out at $150,000 and must be repaid in either a 12- or 24-week term.
Fundbox currently offers lines of credit to borrowers in all 50 states, Guam, American Samoa, North Mariana Islands, Puerto Rico, and U.S. Virgin Islands who meet the following requirements:
- In business for at least three months (although six is recommended)
- FICO score of at least 600
- Annual revenue of at least $100,000
Best for Maturing Businesses : Bank of America
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- Minimum Annual Revenue: $50,000–$100,000
- Loan Amounts: $10,000 and up
- Loan Terms: Revolving or 12-60 months
Multiple financing options
Low interest rates
Physical branches available
Two years in business for loans
Online applications for BofA customers only
Origination fee required
Bank of America offers an excellent variety of financing options, primarily for maturing businesses. Its three main options are its line of credit, secured line of credit, and term loan.
Both the unsecured line of credit and term loan have steeper qualification requirements, including two years in business and a good personal credit score. But loan options also come in higher amounts, at lower interest rates, and with longer repayment terms than competitors.
The secured line of credit also provides a unique opportunity for newer businesses with lower revenue to start building their business credit with a security deposit as low as $1,000. And once you’ve reached the necessary years in business and minimum revenue, you can upgrade to an unsecured credit line.
To qualify for a Bank of America business term loan or line of credit, you’ll have to meet the following requirements:
- In business for at least two years
- FICO score of at least 670
- Annual revenue of at least $100,000
While you don’t have to be an existing Bank of America customer to qualify for Bank of America business financing, you do need to be a customer to complete your financing application online.
Best Fintech Lender : OnDeck
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OnDeck
- Minimum Annual Revenue: $100,000
- Loan Amounts: $5,000–$250,000
- Loan Terms: Up to 24 months
Same-day funding
Multiple funding types
Offers loan renewal with waived interest and fees
Requires either daily or weekly payments
High average APR
Requires an origination fee
OnDeck allows borrowers to choose between two types of funding: business term loans and business lines of credit. As a result, each business owner can decide which works best for them based on the amount they want to borrow, their desired repayment timeline, and whether they plan to need capital again in the future.
As a fintech company, OnDeck provides some key benefits that traditional lenders don’t. For example, business loans are eligible for same-day funding, meaning the money will land in your bank account before 5 p.m. the day your loan is approved.
OnDeck offers business financing in all states except Nevada, North Dakota, and South Dakota to business owners who meet the following requirements:
- In business for at least one year
- FICO score of at least 625
- Annual revenue of at least $100,000
Final Verdict
Many business loans and lines of credit require that businesses have a high amount of revenue to qualify. But the loans on our list offer loans to newer businesses and those that aren’t making much money yet.
Each lender on our list is ideal for a different type of borrower. For example, if you have a very small business—meaning less than $100,000 or so in revenue—then American Express is the best choice. Meanwhile, Lendio is ideal for someone who wants lots of options. And if you’re already a couple of years into your business, Bank of America might work well for you.
Compare Business Loans With Low Revenue
| Lender | Minimum Annual Revenue | Loan Amounts | Loan Terms |
|---|---|---|---|
| American Express | $36,000 | $2,000–$250,000 | 6-18 months |
| Lendio | $96,000 | $5,000–$10,000,000 | 30 days–25 years |
| Fundbox | $100,000 | Up to $150,000 | 12 or 24 weeks |
| Bank of America | $50,000 | $10,000+ | Revolving or 12–60 months |
| OnDeck | $100,000 | $5,000–$250,000 | Up to 24 months |
Guide to Choosing Business Loans With Low Revenue
Factors to Consider When Getting a Business Loan
There are two main types of business loans: secured and unsecured. A secured business loan is one that requires collateral for your application to be approved. An unsecured loan, like a credit card, does not require collateral. New businesses, or businesses with low income, may have an easier time getting a loan if it’s secured. Some secured business loans use a business asset as collateral, while others may allow you to use a personal asset. If you fail to repay the loan, your lender can seize the collateral to help recoup its losses.
Here are a few things to consider when getting a business loan with low income:
- Interest rate and APR: One of the most important factors to consider when choosing a secured business loan is the interest rate and APR (meaning the total annual cost of the loan, including fees). A high interest rate can significantly impact the long-term cost of your loan.
- Fees and lender charges: In addition to the interest on your loan, many lenders charge additional fees. For example, it’s common to pay an origination fee on business loans. Most lenders also impose late fees when you make a late payment. Finally, check if a lender charges a prepayment penalty, which is a fee for paying your loan off early.
- Minimum and maximum loan amounts: Business lenders generally have both a minimum and maximum loan amount. It’s important to make sure the lender you choose offers loans for the amount you need. Too large a loan could mean paying unnecessary interest on funds you don’t need, while too small a loan could result in a financial shortfall.
- Required assets to secure the loan: Lenders will require either a personal or business asset for a secured loan. Each lender will have its own requirements for the types of assets that can serve as collateral, so it’s important to find out before committing to a loan.
- Ability to repay the loan: It’s important that you only borrow money you feel confident you can repay. Of course, failing to repay a business loan can negatively affect both your personal and business credit. And in the case of a secured loan, failing to make your payments could mean losing an important asset.
Alternatives to a Business Loan With Low Revenue
A term loan or line of credit can be an excellent choice for a business that needs some working capital. But if you can’t qualify for a business loan (or don’t want to), there are some alternatives worth considering.
- A credit card: One alternative to consider, especially if you need a relatively small amount of funding, is a business credit card. Credit cards may be less likely to have high revenue requirements, meaning you could qualify even if you’re just getting your business started.
- Crowdfunding: Another alternative to a business loan is crowdfunding. Crowdfunding sites like Kickstarter allow new businesses to attract lots of small investments. Crowdfunding also raises awareness for your product, so you have more name recognition when it’s time to start marketing and selling.
- Peer-to-peer lending: A third type of alternative financing is peer-to-peer lending. Rather than borrowing money from a bank or credit union, peer-to-peer funding allows you to borrow money from individual investors.
Frequently Asked Questions
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What Is the Minimum Revenue for a Business Loan?
The minimum revenue required for a business loan depends on the lender. However, many lenders require an annual revenue of at least $100,000, which is verified through business bank account statements.
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Is Revenue-Based Financing a Good Idea?
Revenue-based financing is a type of business financing where repayment of the loan is based on the company’s future revenue rather than tied to a specific interest rate. Repayment for the loan is a percentage of the company’s revenue.
Revenue-based financing has some benefits, including not having to give up equity in your business or having to commit to a certain interest rate. However, if your business doesn’t have predictable revenue, there’s no way of knowing how much you might end up paying back.
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What If You Get Denied a Business Loan Based on Revenue?
If your business loan application is denied because your revenue is too low, you have some other options. First, you can turn to an alternative, including a business credit card, crowdfunding, or peer-to-peer lending. Another option is to choose a lender that has a lower revenue requirement. Finally, you can work on boosting your business revenue and try applying again.
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Why Does Business Revenue Matter to Lenders?
Business revenue matters to lenders because it’s an indicator of whether you’ll be able to repay your loan. If your business has no revenue and you want a business loan that would come with $2,000 monthly payments, you probably won’t be able to repay that loan. It’s no different than when you apply for a mortgage and your lender wants to verify your income from your employer to ensure you have the ability to repay.
Methodology
Investopedia is dedicated to providing consumers with unbiased, comprehensive reviews of business loan lenders. To rate providers, we collected hundreds of data points across more than 20 business loan lenders. In all, we evaluated 29 factors, including interest rates, fees, loan amounts, borrower requirements, regional availability, and more.
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