Time in Business

Which start date actually counts

Almost every borrower who gets declined on time in business is surprised by the date the lender used. There are usually four candidates, and they can sit years apart:

• Entity formation date — when your LLC or corporation was registered with the state. This is what most bank and SBA underwriters use.
• EIN issue date — when the IRS assigned your federal tax ID. Often within days of formation, but not always.
• First revenue date — the first business deposit visible in your bank records. Many revenue-based funders use this instead, which can help a business that was registered long before it started trading.
• Merchant account open date — when you began processing card payments. This is what card-based products often key on.

A consultant who registered an LLC in 2021, did nothing with it, and started billing in 2025 has four years of entity age and about one year of trading history. Different lenders will read that file completely differently. If your dates diverge, say so in the application rather than letting an underwriter find it — a clean explanation up front reads as organized, while a discovered gap reads as a risk.

Where the thresholds sit

The market clusters around four bands, and each band changes the pricing more than the approval odds:

1. Three to six months — the floor for most merchant cash advances and short-term revenue products. Approval is possible; expect the most conservative sizing and the highest cost. The specifics are laid out in our MCA requirements guide.
2. Twelve months — where most online term lenders and lines of credit open up, and where offers stop being priced purely off deposits.
3. Twenty-four months — the conventional bank and SBA loan threshold. Below two years, expect to bring tax returns, projections, and industry experience to make the case.
4. Three years and beyond — the point at which time in business stops being the binding constraint and cash flow, credit, and collateral take over.

Time in business is not seasoning

These two get used interchangeably, and they are not the same. Time in business measures the age of the company. Seasoning measures the maturity of a specific record — how long this bank account has been open, how long this revenue stream has been running, how long these funds have been sitting in the account.

A six-year-old restaurant that changed banks last month has six years of time in business and about four weeks of account seasoning. It passes the age test and still cannot produce the six months of statements an underwriter wants. The opposite case exists too: a nine-month-old business banking with the same institution since day one has thin time in business but perfectly seasoned records. Knowing which of the two is actually blocking you determines whether you wait, switch products, or gather documents.

If you are a few months short

Waiting is sometimes genuinely the right answer — crossing from eleven months to thirteen can move you out of advance pricing and into term-loan pricing, which is usually worth more than the delay costs. But there are levers that work now:

• Submit bank statements that predate the entity if the same business operated as a sole proprietorship first. Continuity of revenue often counts even when the legal entity is newer.
• Ask which start date the lender uses before you apply. Being three weeks short at one lender may mean being four months clear at another.
• Strengthen what you control instead. Time in business is fixed; deposit consistency, average balance, and NSF count are not.

If you are past the twelve-month mark, it is worth seeing what the full range of business loan options looks like rather than defaulting to the fastest product you qualified for at month six.

What to watch for

• Buying an existing business usually resets the clock. A new entity acquiring a twenty-year-old operation typically starts at zero months, even though the business itself is decades old. Asset purchases and stock purchases are treated very differently here — confirm which one your lender sees.
• Changing entity type can reset it too. Converting a sole proprietorship to an LLC creates a new formation date. The revenue history survives, but you may need to point the underwriter at it.
• Some funders quietly apply a higher bar to specific industries. Trucking, construction, and restaurants often face a longer minimum than the published number. Ask about your NAICS code, not just the general policy.
• More time in business does not automatically improve your rate. It removes a constraint. Pricing then moves to revenue, balances, and credit — so do not expect the anniversary alone to change an offer.

How long do you have to be in business to get a business loan?

It depends entirely on the product. Merchant cash advances and short-term revenue products commonly start at three to six months. Most online term lenders and lines of credit want twelve months. Conventional banks and SBA lenders generally want two years, though SBA programs do fund startups with strong projections, industry experience, and an equity injection.

Does time in business start from my LLC formation date or my first sale?

Both are used, and lenders do not agree. Banks and SBA underwriters usually work from the entity formation or EIN date. Revenue-based funders more often work from the first business deposit in your bank statements. When those dates are far apart, ask which one the lender counts before you submit an application.

Can I get funding with less than 6 months in business?

It is possible but narrow. Options at that stage typically include equipment financing tied to the asset, invoice factoring tied to a creditworthy customer, business credit cards underwritten mainly on personal credit, and some card-based advances. Expect smaller amounts and higher cost, and treat the first facility as a way to build history rather than as the permanent solution.