Business funding · Revenue-based approval
Business Loans Based on Sales History, Not Credit Score
A growing share of small business funding is approved on what the bank statements show rather than what the credit bureau says. Lenders read three to twelve months of deposits, decide how much the business can repay from its sales, and price the advance on that. This guide explains which products work that way, what the statements need to show, how the amount is calculated and what you give up in exchange for ignoring the credit score.
Which Business Loans Are Based on Sales Instead of Credit?
Revenue-based financing, merchant cash advances, short-term loans and invoice factoring are approved mainly on sales history: the lender reads your business bank statements or card processing records and sizes the funding to a share of monthly revenue, typically 50% to 150% of average monthly deposits. Credit is checked only to screen for recent bankruptcies or open collections, so owners with scores in the 500s are funded regularly. Through RAN Funding, businesses with 12 months of history (6 for some lenders) and $20,000 or more in monthly deposits can access $20,000 to $2 million this way, usually within 24 to 48 hours.
How Sales-Based Underwriting Works
Instead of asking “will this owner pay?”, a revenue-based lender asks “how much of this business’s cash flow can be set aside for repayment without breaking it?” The file is the bank statements. The underwriter looks at:
- Average monthly deposits over 3 to 12 months, net of transfers, loan proceeds and owner contributions.
- Consistency: deposits that arrive every week beat the same total arriving in one lump.
- Negative balance days and NSFs: the strongest signal of stress. Zero to three a month is fine; ten is a decline.
- Ending balances: a cushion at month end shows the payments can clear.
- Existing positions: every daily or weekly debit already on the statement reduces what can be added.
- Industry and seasonality: a landscaper’s winter dip is expected; a sudden 40% drop at a restaurant is a question.
Credit is pulled, usually softly at first, to screen for bankruptcies in the last 1 to 3 years, open tax liens and recent judgments. A 540 score with none of those is workable; a 700 with an active bankruptcy is not.
The Products, Compared
| Product | Approved on | Typical amount | Repayment | Cost | Credit floor |
|---|---|---|---|---|---|
| Revenue-based financing | Bank deposits | 50% – 150% of monthly deposits | Fixed daily or weekly debit, 4 – 18 months | Factor 1.15 – 1.45 | 500+ |
| Merchant cash advance | Card sales | 50% – 120% of monthly card volume | A % of each day’s card settlements | Factor 1.20 – 1.50 | 500+ |
| Short-term loan | Deposits plus a light credit check | Up to 2 months of deposits | Fixed weekly or monthly, 6 – 24 months | Factor 1.15 – 1.40 | 550+ |
| Invoice factoring | Your customers’ payment history | 70% – 90% of eligible invoices | When the customer pays | 1% – 5% per 30 days | None |
| Equipment financing | The equipment plus deposits | Equipment cost | Monthly, 2 – 7 years | 8% – 25% APR | 550+ with a down payment |
How Much You Can Get From Your Sales History
A worked example at typical 2026 sizing. A restaurant averaging $60,000 a month in deposits with one existing advance debiting $400 a day:
| Step | Calculation | Result |
|---|---|---|
| Gross capacity | About 100% of monthly deposits for a clean file | $60,000 |
| Existing position | $400 × 21 days = $8,400 a month already committed | Capacity drops to roughly $40,000 – $45,000 |
| Holdback test | New payment + existing payment should stay under about 15% – 20% of deposits | $8,400 + new ≤ $12,000 → new payment ≈ $3,600/month |
| Offer | $40,000 at factor 1.28 over 9 months | $51,200 payback, about $5,700 a month |
Clean statements with no existing positions and rising deposits push the multiple toward 150%; falling deposits, negative days and stacked advances push it below 50% or to a decline. Our how much funding can my business get guide walks through more scenarios.
What You Give Up When Credit Is Ignored
- Price. Factor rates of 1.15 to 1.45 on 6- to 12-month terms are 30% to 90% annualized. See factor rate vs APR.
- Payment frequency. Daily or weekly debits, which need a steady balance.
- Term. Rarely longer than 18 months, so the payment is large relative to the amount.
- No early-payoff savings on most factor-rate contracts unless a prepayment discount is written in.
- Credit building. Most revenue-based funders do not report to the bureaus, so the loan does not improve your score.
The trade is worth making when the money earns more than it costs in the time you have it: stock for a season, a contract deposit, a repair that keeps the doors open. It is not a good way to fund slow, low-margin growth.
How to Get the Best Sales-Based Offer
- Keep all sales in one business operating account for at least three months before applying.
- Stop the negative days: a small cushion in the account is worth more than a higher score.
- Pay down or consolidate stacked advances first; see reverse consolidation.
- Have the last three months of statements in PDF, every page, plus the card processing statements if you take cards.
- Ask for the amount the statements support, not the amount you want; a right-sized first advance earns a larger renewal.
- Compare at least three offers on payback dollars and payment per month, not on the factor rate alone.
How to Apply Through RAN Funding
- Apply online in about five minutes with a soft credit pull.
- Upload three months of business bank statements (four in California, New York and Virginia).
- A specialist reads the statements the same day, calculates capacity and sends the file only to the funders whose boxes it fits.
- Review the offers side by side, with the total payback and the daily or weekly payment on each.
- Choose, sign and fund, often within 24 to 48 hours.
RAN Funding is a business financing broker, not a lender. The funding partner sets the terms and pays RAN Funding; there is no charge to you for the comparison.
Common Questions
Can I get a business loan with a 500 credit score if my sales are strong?
Usually, through revenue-based financing or a merchant cash advance, as long as there is no open bankruptcy or recent judgment and the deposits are steady. See business loans with a 500 credit score for the detail.
Do these lenders check credit at all?
Yes, but to screen for recent bankruptcies, liens and judgments rather than to set the approval. The score itself has little effect on whether you are funded, and some effect on price.
How many months of sales do I need?
Six months at minimum with a few lenders; twelve months opens most of the market and better pricing. Factoring needs only invoices to creditworthy customers.
Does a revenue-based loan build business credit?
Rarely. Most funders do not report to the business or personal bureaus. If building credit matters, add a product that reports, such as equipment financing or a secured business card.
Will a sales-based lender ask for tax returns?
Not for amounts under about $150,000. Larger requests may need the most recent return and a year-to-date profit and loss statement.
Is RAN Funding a lender?
No. RAN Funding is a broker. It places your file with the revenue-based, short-term, factoring and equipment funders in its network and is paid by the funder you choose.
Sources
- 2026 Report on Employer Firms: Findings from the 2025 Small Business Credit Survey — Federal Reserve Banks, 2026
- Merchant cash advances: what small businesses should know — Federal Trade Commission
See What You Qualify For
One application, about five minutes, soft pull only. A funding specialist reads your statements the same day and tells you which products fit, what each costs and how fast it funds.
More on Revenue-Based Funding