Who Is Eligible For a Small Business Merchant Loan?

Think of it this way: you own a buzzing coffee shop, and an empty storefront next door has just become available. It’s a golden chance to grow, but your funds aren’t exactly bursting at the seams. You’ve heard about merchant cash advances and small business merchant loans, and you’re wondering, am I even eligible?

Good news: Merchant loans are built for businesses like yours. 

Better news: The qualification bar is often way more flexible than your classic bank loan. 

Let's break down who actually qualifies and what lenders are looking for.

Fundamentals: The Foundation of Your Business

First, you need a real, operating business. It probably goes without saying, but the merchant lenders aren't funding a shiny idea on a laptop. They want to see you earning revenue, preferably with regular credit card processing.

That said, most lenders want you to have been in business at least three to six months; some require a full year. Why? They need to see a sales history to judge whether you can realistically repay the advance. If you opened last Tuesday, you'll likely need to wait a bit longer before merchant financing is an option.

Show Me the Money: Revenue Rules

Where this gets interesting is when a lender takes into light your revenue, even specifically your monthly credit card sales. Primarily, whereas old-line banks chase credit scores and collateral, merchant lenders want cash-flow stability.

Typical minimum monthly revenue runs from about $5,000 to $10,000, though it varies by lender. Some aggressive outfits may accept lower figures, while lenders serving larger businesses might require $20,000 or more per month. The key word is “consistent.” One great month followed by three awful ones won’t cut it. Lenders want predictability in your sales.

Credit Score: It Matters, Big-Time-Or Does It?

One strength Merchant loans have that many traditional loans don't is that they tend to be easier on credit scores. Forget the old 720 requirement your bank threw out there; most Merchant lenders will work with scores as low as 500-or even lower in some cases.

That said, your score does affect terms. A higher score (650+) generally means better factor rates and nicer repayment terms. A lower score doesn't automatically disqualify you, but it can raise costs. The magic of merchant financing is that your sales volume often trump's past credit missteps. If you're moving $50,000 in monthly card sales, they'll be more forgiving of previous rough patches.

Industry Matters: Some Businesses Have It Easier

Not all ventures are created equal, it would seem. If you run a restaurant, a retail shop, a salon, or any business with heavy card transactions, you're in a sweet spot. These industries line up perfectly with the repayment model-a small slice of daily card sales.

However, high-risk categories-crypto, adult content, or gambling-receive a greater degree of scrutiny or possibly an outright rejection. Cash-oriented businesses do poorly, as well, given the inability of lenders to siphon their cut from sales they cannot track.

Documents: What You'll Need to Show

Approval isn't just about ticking boxes - it's about proving you meet them. Be prepared to provide:

• Bank statements (usually 3-6 months) showing your deposits and cash flow
• Credit card processing statements demonstrating your monthly volume
• Business tax returns or financial statements (though not always required)
• Personal identification and basic business information
• Evidence of business ownership (sometimes just a voided business check works)

The good news? This is typically way less paperwork than a traditional bank loan requires. Many merchant lenders can approve you within 24–48 hours if your documents are in order. 

Real Talk: Are You Really Eligible? 

Truth be told: If you've got an established business with steady revenue, regularly process credit cards, and can show cash flow, you're likely qualified. The bar is lower than traditional financing, which is the draw and also the risk. But eligibility isn't everything. 

Merchant loans come with higher costs than traditional loans, so they are best for short-term needs or when speed matters more than price. The question isn't just "Am I qualified?", but "Is this the right financing for my situation?" If you need quick capital, have solid sales, and can handle the repayment structure, merchant financing may be an ideal fit.