How Business Loans Actually Work

What an underwriter is actually reading, why two lenders price the same business differently, and the only three numbers you should compare.

Business lending looks complicated from the outside because every lender describes the same three things in different language. Underneath, an underwriter is answering one question: does this business generate enough predictable cash to service this payment, and if it stops, what can we recover? Everything else is detail.

The four things an underwriter actually reads

1. Your bank statements. Usually the last three months. They are looking at average daily balance, deposit consistency, number of negative days, and whether other lenders are already debiting you. This document decides more approvals than your tax return.
2. Time in business. A proxy for survival odds. The floors are real: 4+ months for the fast programs, 6+ months for a line of credit, 2+ years for a term loan or SBA. Equipment financing has no minimum at all, because the equipment is the security.
3. Credit profile. Not a pass/fail so much as a price. 660+ opens term loans, 600+ opens lines of credit, 675+ is the SBA floor, and several products — factoring, purchase order financing, merchant cash advance — have no minimum FICO because something else is carrying the risk.
4. The collateral, if any. A truck, a building, an aged receivable from a creditworthy customer. Secured money is always cheaper than unsecured money, and it is frequently available to businesses that cannot get unsecured money at all.

Why two lenders price the same business differently

Because they are not underwriting the same risk. A bank holds the loan for ten years and needs the business to still exist in year nine. A revenue-based funder gets repaid in nine months and mainly needs your deposits to keep landing through the winter. Same business, same statements, radically different answers — and it is why a single decline tells you almost nothing about whether your business is fundable.

The only three numbers worth comparing

Notice what is missing: the interest rate. Rate is an input, not an answer. A 1.28 factor rate has no interest rate at all, and a "9.9%" quote with four points of origination is not a 9.9% deal. Convert everything to dollars repaid, then decide.

How the money actually gets to you

On the fast programs, a complete file — application plus three months of statements — moves through underwriting in hours and funds the same day or within three business days. Equipment financing takes a few days because a vendor invoice has to be verified and the vendor is usually paid directly. Invoice factoring takes 2–5 days to set up, then advances quickly. Commercial real estate runs about 30 days because appraisals, environmental reports and title work cannot be rushed. SBA is 30–45 days, and an approval in 48–72 hours is not the same as funding.

The most expensive mistake owners make

Borrowing short-term money for a long-term purpose. A nine-month advance used to cover a build-out that takes eighteen months to pay back creates a hole you have to borrow again to fill. Match the term of the money to the life of the thing you are buying. That one rule prevents most of the damage we get called in to fix.

Program guidelines shown are our lending partners' published minimums as of September 2026 and can change. They are qualification floors, not an offer. Reviewed and maintained by the Goldspur Capital funding desk. This is general information about commercial finance products, not financial, legal or tax advice for your specific situation.