Seasoning

Three different things called seasoning

The word gets used loosely, and which meaning applies changes what you should do about it.

• Account seasoning — how long the business bank account has been open and active. This is the one that blocks most applications, because you cannot produce six months of statements from an account that is eight weeks old.
• Revenue or merchant seasoning — how long a particular income stream has been running at its current level. A restaurant that added catering three months ago has years of revenue seasoning on dine-in and three months on catering, and an underwriter will weight them differently.
• Funds seasoning — how long money has been sitting in an account before it is used as a down payment or equity injection. Bank and SBA underwriters commonly want to see cash resting for a period, typically around 60 to 90 days, so they can confirm it is yours rather than borrowed for the closing.

In every case the underlying question is the same: how much of this can be verified, and for how long has it been true? Seasoning is not about virtue. It is about evidentiary depth.

Why switching banks is more expensive than it looks

Here is the scenario that catches experienced owners. A six-year-old landscaping company moves from a regional bank to an online business bank for better fees. Five weeks later it applies for working capital and gets declined.

Nothing about the business changed. It has six years of time in business, the same customers, the same revenue. What it does not have is five months of statements in the account it now uses. The old bank's statements exist, but they end abruptly, and the new account has no history — so the underwriter is left with an unverifiable gap right where they most need continuity.

The distinction matters because the two problems have opposite solutions. Thin time in business is fixed by waiting or changing product. Thin seasoning is often fixed by documents — submitting the closed account's final statements alongside the new ones, showing the transfer that moved the balance across, and letting the underwriter reconstruct the timeline. If you must switch banks, keep the old account open and lightly active for six months rather than closing it the day the new one funds.

How much seasoning is enough

There is no single answer, but the practical bands are consistent across the market:

1. Three months of account history — the working minimum for most revenue-based products and advances.
2. Six months — where pricing typically improves and where more funders will look at the file at all.
3. Twelve months — the point at which seasoning generally stops being the constraint. Longer histories add little beyond this.
4. Sixty to ninety days for funds — the common expectation for down payment and equity injection money on bank and SBA loan files.

If you are building seasoning deliberately, three habits do most of the work: route every payment method into the same account, deposit cash daily rather than in batches, and keep the balance above zero every single day. Twelve consecutive clean months in one account is worth more to an underwriter than a larger balance with a broken history.

What to watch for

• Seasoning and time in business get conflated in marketing copy. A funder advertising "6 months minimum" may mean six months of business age, six months of statements, or both. Ask which, in writing, before you spend an application on it.
• Renewals do not reset seasoning, they extend it. One reason a renewal prices better than a first advance is that the funder now has months of its own repayment history on you — the most seasoned data that exists.
• A large deposit close to closing can undo funds seasoning. Money that appears the week before an SBA closing usually has to be sourced and explained. Move it early or expect to document it.
• Merchant processor switches carry the same cost as bank switches. Changing payment processors resets the settlement history that card-based products underwrite on, even though your sales never paused.
• Do not open a second account "for the loan." Splitting deposits across two young accounts gives you two thin histories instead of one adequate one. When you are ready to look at business loan options, a single well-seasoned account is the strongest asset in the file.

What does seasoning mean for a business loan?

It refers to how long a specific record has existed — usually how long your business bank account has been open and actively receiving deposits, and sometimes how long funds have been sitting in it. Most revenue-based lenders want at least three months of account history, with six months being the point where pricing generally improves.

Is seasoning the same as time in business?

No. Time in business measures how old the company is. Seasoning measures how mature a particular account or revenue stream is. A twenty-year-old company that opened a new bank account last month has excellent time in business and almost no account seasoning, and it will be declined by lenders that require several months of statements.

How long should money sit in my account before an SBA closing?

Lenders commonly look for around 60 to 90 days of history on funds used for a down payment or equity injection, though the specific requirement varies by lender and program. Money that arrives shortly before closing generally has to be sourced with documentation showing where it came from, and gifted or borrowed funds are treated differently from savings.