Frequently Asked Questions
Straight answers about business financing
Loanwise Solutions is a nationwide commercial loan broker and business financing marketplace. These are the questions business owners ask us most — answered without the sales pitch.
About Loanwise Solutions
Who we are, how we get paid, and what working with a broker actually looks like.
What is Loanwise Solutions?
Loanwise Solutions is a nationwide commercial loan broker and business financing marketplace based in Chicago, Illinois. We help business owners compare financing options and connect with a network of banks, credit unions, private lenders, fintech lenders, and specialty finance companies across the United States.
Is Loanwise Solutions a direct lender?
No. We are a commercial loan broker, not a direct lender. We do not fund loans with our own capital. Instead we place your file with the lending partners most likely to approve it on the best available terms.
How does a commercial loan broker get paid?
In most cases the lender pays a placement fee at closing, so there is no cost to you for the consultation or for shopping your file. When a deal structure requires a borrower-paid fee, we disclose it in writing before you commit to anything.
What states does Loanwise Solutions serve?
All fifty states. Our office is in Chicago, but our lending partners fund nationwide and the entire process can be completed remotely.
Why use a broker instead of going straight to my bank?
Your bank has one credit box. If you fall outside it, you get a decline and start over. We submit one package to multiple qualified lenders, compare real offers side by side, and structure the request the way underwriters want to see it.
How many lenders does Loanwise Solutions work with?
We maintain relationships with a network of more than 100 active capital partners, spanning banks, credit unions, SBA-preferred lenders, private and bridge lenders, fintech lenders, factoring companies, and equipment specialists.
Does contacting Loanwise Solutions obligate me to anything?
No. The consultation is free and there is no obligation. If financing does not make sense for your situation right now, we will tell you that directly.
Qualifying for business financing
What lenders look at when they decide whether to approve your business.
What do I need to qualify for a business loan?
Most commercial lenders look at four things: time in business, monthly or annual revenue, personal and business credit, and available collateral. Meeting three of the four strongly is usually enough — very few borrowers are perfect on all four.
How long do I need to be in business to get financing?
Six months of operating history opens most revenue-based and working capital programs. Two years opens bank and SBA programs. Startups can still be financed through unsecured credit lines, equipment financing, or an SBA loan with a larger equity injection.
How much revenue do I need?
Many programs start around $10,000 in monthly revenue. Bank and SBA lenders typically want at least $250,000 in annual revenue with demonstrated profitability or clear debt service coverage.
Can I get a business loan if I've been declined by a bank?
Yes, and it is one of the most common reasons business owners come to us. A bank decline reflects that one lender's credit box, not your overall fundability. We identify why the file was declined and route it to lenders who underwrite that profile.
Do I need collateral for a business loan?
Not always. Working capital loans, lines of credit, factoring, and merchant cash advances are frequently unsecured or backed only by a general UCC filing. Real estate, equipment, and larger SBA loans do require specific collateral.
Will I have to sign a personal guarantee?
For most small business financing, yes. Owners with 20% or more equity typically guarantee the debt. Non-recourse options exist mainly for stabilized commercial real estate.
Can I qualify with a tax lien or past bankruptcy?
Often yes. Tax liens on an approved payment plan and bankruptcies discharged more than two to four years ago are workable with many lenders. Invoice factoring is especially accommodating because it underwrites your customers' credit.
Credit requirements
How credit is actually used in commercial lending decisions.
What credit score do I need for a business loan?
It depends on the product. Merchant cash advances start near 500. Working capital loans and equipment financing generally start around 600. Bank lines and SBA loans typically want 650 to 680 or higher. Commercial real estate lenders usually look for 660+.
Can I get business financing with bad credit?
Yes. Revenue-based financing, invoice factoring, merchant cash advances, and asset-backed equipment loans all place more weight on cash flow or collateral than on your FICO score. Expect higher pricing and shorter terms.
Do lenders check personal or business credit?
Usually both. Personal credit is pulled for any owner with a significant stake, and business credit files such as Experian Business, Dun & Bradstreet, and the FICO SBSS score are reviewed for bank and SBA programs.
Does applying for a business loan hurt my credit?
Prequalification is generally a soft pull with no score impact. A hard inquiry typically happens only once you move forward with a specific lender, which is why comparing offers through one broker beats applying to five lenders separately.
What is a FICO SBSS score?
It is a small business credit score from 0 to 300 that blends personal credit, business credit, and financial data. SBA lenders often prescreen at 155 or higher for the 7(a) Small Loan program.
How can I improve my chances of approval?
Keep business and personal finances separate, maintain healthy average daily bank balances, avoid overdrafts and NSF activity, keep credit utilization below 50%, file tax returns on time, and avoid stacking multiple short-term advances.
Approval timelines and funding speed
Realistic timelines from application to money in the account.
How fast can I get a business loan?
Merchant cash advances and working capital loans can fund in 24 to 72 hours. Lines of credit and equipment financing take one to seven days. SBA loans run 30 to 90 days. Commercial real estate closes in 30 to 60 days. Bridge loans close in 7 to 21 days.
What slows a business loan application down?
Missing bank statements, outdated financial statements, unfiled tax returns, unclear use of proceeds, undisclosed existing debt, and third-party items such as appraisals, environmental reports, and title work.
How can I speed up my approval?
Have six months of business bank statements, the last two years of business and personal tax returns, a current P&L and balance sheet, and a debt schedule ready on day one. A complete file routinely cuts the timeline in half.
How long does SBA loan approval take?
Typically 30 to 90 days for SBA 7(a) from complete application to funding. SBA Express is faster, often three to five weeks, but the maximum loan amount is smaller.
Can I get same-day business funding?
Same-day funding happens on smaller merchant cash advances and revenue-based loans when the file is clean and submitted early in the day. It is the exception rather than the rule.
Documentation and the application process
What we ask for, and why each item matters to the underwriter.
What documents do I need to apply for business financing?
The baseline package is a completed application, three to six months of business bank statements, and a photo ID. Larger or bank-grade requests add two years of business and personal tax returns, a year-to-date P&L and balance sheet, a debt schedule, and an AR/AP aging report.
What does the application process look like?
Three steps. First a short discovery call to understand your goals and profile. Second, we package the file and submit it to matched lenders. Third, we present the offers side by side and guide you through closing with the lender you choose.
Do I need a business plan?
Not for revenue-based or working capital financing. Yes for startups, business acquisitions, franchise units, and construction projects, where lenders want projections with defensible assumptions.
Is my information kept confidential?
Yes. Your file is shared only with lending partners relevant to your request, and we tell you which lenders we are approaching before we submit.
Can I apply for more than one type of financing at once?
Yes, and stacked structures are often the right answer — for example an SBA acquisition loan paired with a working capital line so the business has liquidity from day one.
Rates, costs, and fees
How commercial financing is priced and what to compare.
What are current business loan rates?
Pricing varies by product and profile. SBA and conventional bank loans are the lowest-cost options. Working capital and lines of credit typically run in the 8% to 30% APR range. Factoring is quoted as 1% to 4% per 30 days. Merchant cash advances use factor rates of about 1.10 to 1.49.
What is the difference between a factor rate and an APR?
An APR annualizes cost over time. A factor rate is a flat multiplier applied to the funded amount regardless of how fast you repay. A 1.30 factor rate on $50,000 means $65,000 total, and repaying faster does not reduce it unless the contract says so.
What fees should I expect?
Common items include an origination fee of 1% to 5%, SBA guaranty fees on government-backed loans, appraisal and environmental fees on real estate, and documentation or UCC filing fees. We provide a full cost breakdown before you sign.
Are there prepayment penalties on business loans?
Sometimes. SBA loans with terms over 15 years carry a declining prepayment penalty in the early years. Many short-term products are not priced to reward early payoff. We flag prepayment terms on every offer we present.
Is interest on a business loan tax deductible?
Business loan interest is generally deductible as a business expense. Merchant cash advance costs are treated differently because an MCA is a receivables purchase rather than a loan. Confirm treatment with your CPA.
SBA financing
The government-backed programs most small businesses ask about.
What is an SBA loan?
An SBA loan is made by a bank or approved lender and partially guaranteed by the U.S. Small Business Administration. The guarantee reduces lender risk, which allows longer terms, lower down payments, and approval for borrowers who would not qualify conventionally.
What is the difference between SBA 7(a) and SBA 504?
SBA 7(a) is flexible and can be used for working capital, equipment, acquisitions, refinancing, or real estate, up to $5 million. SBA 504 is specifically for owner-occupied real estate and heavy equipment, structured as a bank loan plus a fixed-rate CDC debenture, often with only 10% down.
Who qualifies for an SBA loan?
For-profit U.S. businesses that meet SBA size standards, operate in an eligible industry, have owners of good character, and can demonstrate repayment ability. Most lenders additionally want 650+ credit and two years of operating history.
How much down payment does an SBA loan require?
Typically 10% for business acquisitions and owner-occupied real estate. Startups and special-purpose properties often require 15% to 30%.
Can SBA loans refinance existing business debt?
Yes, when the refinance provides a substantial benefit — usually at least a 10% payment reduction — and the existing debt was used for an eligible business purpose.
What are SBA loan terms?
Up to 10 years for working capital and equipment, and up to 25 years for real estate. Long amortization is one of the biggest advantages of the program.
Cash flow solutions
Choosing the right tool when the problem is timing, not profitability.
What's the best financing option for cash flow problems?
If the issue is slow-paying B2B customers, invoice factoring or accounts receivable financing is usually cheapest. If it is seasonality, a line of credit or seasonal inventory facility fits better. If it is a one-time gap, a short-term working capital loan is simplest.
How do I fix a payroll shortfall this week?
The fastest realistic options are invoice factoring on an existing invoice, a draw on an open line of credit, or a short-term working capital advance. Factoring is generally the least expensive of the three when you have receivables to sell.
Should I use factoring or a line of credit?
Factoring scales automatically with your invoicing and does not depend on your credit, which suits fast growth. A line of credit costs less when unused and keeps customer relationships entirely private.
How do seasonal businesses manage cash flow with financing?
The common structure is a revolving line or inventory facility drawn ahead of peak season and paid down as revenue arrives, sometimes paired with equipment financing so a capital purchase does not consume operating cash.
Is it a bad idea to take on debt to solve cash flow?
Debt used to bridge timing on profitable revenue is usually sound. Debt used to cover ongoing losses rarely is. We tell clients directly when financing would delay rather than solve the underlying problem.
Choosing between loan types
Quick answers on which product fits which situation.
What types of business loans does Loanwise Solutions offer?
SBA loans, working capital loans, business lines of credit, invoice factoring, accounts receivable financing, equipment financing, commercial real estate loans, bridge loans, merchant cash advances, franchise financing, startup business funding, business acquisition financing, and inventory financing.
Should I get a term loan or a line of credit?
Choose a term loan for a defined one-time expense with a known amount. Choose a line of credit for recurring or unpredictable needs, since it costs nothing when unused and can be drawn repeatedly.
What is the cheapest way to finance a business?
SBA and conventional bank loans carry the lowest rates and longest terms. The trade-off is documentation and a 30 to 90 day timeline. Speed almost always costs money in commercial lending.
How much can my business borrow?
Amounts range from $5,000 on a small advance to $50 million or more on commercial real estate. A common rule of thumb for unsecured working capital is 10% to 20% of annual revenue.
Can I refinance expensive business debt?
Frequently yes. Consolidating stacked merchant cash advances or high-rate short-term loans into a single longer-term facility is one of the most valuable things we do for clients.
Still have a question?
Tell us about your business and we'll answer it in a 15-minute call — no obligation, no pressure.