How Much Revenue Is Required to Get a $2 Million Business Loan?

For growing businesses, obtaining a $2 million business loan would represent a significant opportunity to finance growth initiatives. A $2 million loan could assist businesses with expansion into other geographic areas or new product lines; purchase capital assets such as equipment or buildings; purchase another company; and improve operating cash flow. The question that many small business owners generally have about obtaining a $2 million business loan is;

How much revenue must I obtain to be eligible for a $2 million business loan? 

While the specific answer varies from lender to lender, understanding the minimum revenue requirements will allow business owners to prepare themselves to select a lender to best meet their needs.

Follow the Revenue Requirements for Large Business Loans

The revenue of a business will indicate the ability of the company to repay the loan. For large loans (over $1 million), lenders will want to see consist earnings, healthy cash flow, and established business history.

Many traditional lenders (e.g., banks) utilize very detailed revenue analysis methods. Alternative lenders (e.g., Swish Funding) take a more comprehensive perspective; they will examine the entire financial condition of the business rather than just revenues.

Minimum Revenue Requirement Guidelines

There are several minimum revenue requirement guidelines for $2 million business loans, depending on which lender you work with, however, here are some minimum revenue guidelines for $2 million business loans in general.

1. Annual Revenue Benchmarks

It is common for many lenders to expect their clients' annual sales to fall within the range of One Million to Three Million Plus Dollars per year.

•  The general rule of thumb for most lenders is the 1.5X to 2.0X annual revenue requirement. 
• In order to qualify for loans comfortably, businesses need to make approximately 1.5X to 2.0X the amount of the loan in annual revenue. 

This could mean, for example: Conservative lenders would expect to see $3M+ in annual revenue, and Flexible Lenders would expect to see $1M to $2M in annual revenue. Swish Funding typically works with businesses that fit within the Flexible category, especially when the business has strong cash flow.

2. Monthly Revenue Expectations

For many lenders, they look for monthly sales in addition to annual sales. In the case of a $2M loan, lenders might require anywhere from an estimated $80,000 to $250,000 in monthly sales revenue based on several risk factors as well as how the loan is structured. Service business models that operate under the B2B model or have seasonal fluctuations, such as wholesalers/manufacturers/franchises, typically qualify more easily when applying for a loan with a lender.

3. Revenue Stability Over Time

To qualify, lenders want to see a company that has a stable revenue stream. Revenue growth should be steady and should not experience drastic increases/decreases. In general, a company should have between 12 to 24 months of stable/growing revenue thereby providing the lender with sufficient support to see that the borrower has a consistent source of revenue and can repay their loan. However, businesses that experience seasonal revenue fluctuations can also qualify, especially lenders such as Swish Funding who understand the nature of these types of businesses and cycles.

Other Factors That Impact Approval

While lenders do take into account your revenue, it’s not the primary factor taken into consideration when deciding if you’re eligible for financing.

Cash Flow Strength

Not just about your gross sales; it’s about how much money you’re left with after expenses. Great profit margins on lower sales can make up for that.

Time in Business

Most lenders want to see you have roughly:

• 2+ years in business for a $2 million loan.
• Fast-growing businesses with good cash flow might qualify sooner.

Credit Profile

Having a good credit score is always helpful, but many alternative lenders pay more attention to the success of your business operations than the credit score of your owners. Swish Funding works with businesses that have at least fair credit. There is an opportunity for their owners/businesses to get approval with a lower credit score.

Existing Debt

Lenders will look at what debts you have to see how much additional financing you will likely get. Lenders will make sure the amount you are applying for won’t make your current debts unmanageable.

Why Go With Swish Funding?

Traditional lenders are rigid, so even some qualified businesses cannot get financing from them because of their stringent requirements. On the other hand, Swish Funding.

• Flexible revenue criteria will allow you to get financing quicker.
• Faster decisions will be made by Swish Funding compared to banks.
• Loan terms will be tailored to match your cash flow.
• Fast approval with little paperwork means you spend less time worrying about being able to get the capital you need to grow your business.
• Funding experts who are knowledgeable about businesses in growth stages.

Instead of waiting months for a decision from your bank, Swish Funding gives you access to capital when you need it most.

Can You Qualify With Less Revenue?

Yes, there are cases where a business can qualify even if they have low revenue.

• You are a business with good profit margins. 
• You have high-value contracts or receivables. 
• You have collateral or asset-backed support. 
• You have rapid growth over the last couple of years. 

At Swish Funding, your application will be worked on by trained professionals who will evaluate it based on your business’s performance. Therefore, while a business may be considered a high risk by a traditional lender, there is still a good chance of getting approved at Swish Funding. 

How to Prepare for the Application Process?

If you would like to apply for a $2 million business loan, there are several steps you can take to prepare: 

• Gather your most recent bank statements and financials. 
• Cut back on as many non-essential expenses as possible to improve your cash flow. 
•  If possible, pay off as much of your high-interest debt as you can. 
• Work with a lender that fully understands your particular industry. 

If your business generates an annual revenue of $1 million or more and you are looking to grow, you may be able to get the $2 million business loan. 

Apply today at Swish Funding and see if your company qualifies for one of our financing options tailored to help growing businesses. 

We’ll help you move forward on your growth path with continued assistance and a partner who understands the industry well.