Become a Business Financing Pro: Over 40 Small Business Statistics and Facts on Loans and More

By July 29, 2015Business Financing

It’s time for your business to expand with new projects, open another branch, or replace your furniture and just as you’re about to start looking into business financing options, you remember your last experience of applying for small business loans. Slow. Lots of paper.

But how does the small business loan application process compare to other business financing options in the market? Who really qualifies for business financing today? How hard is it to get business financing? What types of credit can you get? And how can your credit change over time?

Get answers to all those questions with over 40 small business statistics that set a landscape for the world of small business financing today.

When you’re making business financing decisions, keep these small business statistics handy, so you have a broader picture of what you’re up against, and how you can keep growing your own numbers.

What are the business size and age qualifications for business financing and small business loans?

  • Businesses need to exist for an average of 2-3 years before getting a small business loan for working capital (P2Binvestor 2014).
  • In 2013 small businesses made up 99% of employer firms in the United States (Office of Advocacy U.S. SBA 2014).
  • It can take the average business about one week to hear back from a bank regarding their credit application for a small business loan (Bank of America 2015).
  • Some peer-to-peer lending agencies require businesses to exist for 2 years before being able to qualify for a small business loan (Fit Small Business 2015).
  • According to the SBA, in 2014 roughly 50% of small businesses would survive for 5 years or more (SBA 2014).
  • One third of small businesses survive 10 years or more (SBA 2014).

How much can you borrow in small business loans?

  • The median small business loan banks will give is $130,000-$140,000 and the highest they’ll give is about $250,000 (SBA 2013).
  • The average small business loan is $371,000 (SBA 2013).
  • The average balance on small business loans from a bank in 2012 was $256,060 (NSBA 2012).
  • For small business loans under $250K, alternative lenders now offer a variety of options, at different rates (Fit Small Business 2015).
  • Behalf offers credit lines of up to $50,000.

How hard is it to get business financing?

  • In 2012, 43% of small businesses said that they were unable to find sources for the business financing they needed (NSBA 2012).
  • Only 13% of applicants were approved for a small business loan in 2013 (Ventury Capital 2015).
  • 46% of businesses think it’s somewhat easy to get the business financing they need (The Hartford 2015).
  • Of the people that think getting a small business loan is relatively easy, 36% admitted that they use retirement savings, money from family or friends, or personal savings for business funding, as opposed to bank loans (The Harford 2015).
  • Big banks only approve a little more than 20% of the small business loan requests they receive (Business News Daily 2015).
  • Banks gave out 20% fewer small business loans since the financial crisis of 2008 (Harvard Business School 2014).
    #DidYouKnow: Big #banks only approve about 20% of loan requests from #SMBs. Shocked? Check out more…

What’s behind your credit score?

  • The SBA gives businesses credit scores on a 0 to 100 numbering scale, the likelihood of getting a small business loan is dependent on that score (Small Business by Demand Media 2015).
  • Many lenders consider a score of 75 as “acceptable” making it harder for those with a lower score to get a small business loan (Small Business by Demand Media 2015).
  • The SBA’s credit score is 50% – 90% based on a business owner’s personal credit history (Fit Small Business 2014).
  • Factors that go into the business credit profile that the SBA gives include how often you pay your bills, credit history, and available credit (Business News Daily 2015).

What credit score do you need for business financing approvals?

  • FICO scores of less than 660 will have a hard time finding a bank that is willing to give them a loan (Ventury Capital 2015).
  • Banks will give better loan rates and terms to small business owners who have a FICO score of 720 (Ventury Capital 2015).
  • SBA usually won’t consider giving out small business loans when FICO scores are less than 700 (Ventury Capital 2015).
  • Many alternative lending sources only lend to scores above 550 (Fit Small Business 2015). Many of these lenders take into account other factors, beyond your credit score.
  • Behalf does not have a hard credit score requirement and, instead, uses a multidimensional approval algorithim that factors in hundreds of sources of personal and business data

Can your credit score change?

  • In 2012, 29% of small business surveyed stated that, in the last four years, their loans or lines of credit decreased (NSBA 2012).
  • Between 2009-2012, 42% of respondents said their small business loans had been threatened in some way (including having their limit be reduced or called in early by the bank) over the last four years.
  • In 2012, 52% of small businesses surveyed said that over the course of the previous four years their small business loans went unchanged.
  • In 2013, 43% of small businesses said the terms for their business credit cards had gotten worse with only 9% of small businesses saying that it improved (NSBA Mid Year Economic Report 2013).
  • Of these small businesses, about 1 in 10 had their loans or lines of credit called in early by the bank and 19% were given less than 15 days notice to payback their small business loans (NSBA 2012).
  • Of those small businesses whose lines of credit were changed, 60% reported that the reason of change was due to banks’ internal risk assessment (NSBA 2012).
  • In general, the average business needs 12-18 months to improve its credit score (Cardhub 2015).
  • Most Behalf small business customers who receive a credit line increase will get a boost of 13% or more within their first 6 months (Behalf, Internal Data, July 2015).

What business financing terms can you get?

  • In 2012, 44% of businesses said that the business financing terms for their credit cards had gotten worse (NSBA 2012).
  • The small business loan terms are usually between 10-20 years for repayment, depending on the specific type of loan (Business News Daily 2015).
  • Bank loans repayment terms are often between 3-5 years and usually include balloon payment structures (Business News Daily 2015).
  • In 2012, 40% of small businesses used their businesses’ property to secure their loans (NSBA 2012).
  • Small businesses can qualify for Behalf terms of up to 150 days, at a business financing schedule they choose.

What’s the average debt of a small business?

  • As of July 2013, 88% of small businesses carried debt (NSBA Mid Year Economic Report 2013).
  • The average debt for small businesses in July 2013 was $835,828 (NSBA Mid Year Economic Report 2013).

Want to recommend more small business statistics? Shoot us a reply in the comments, or email, and we’ll include it in our next list of small business statistics. We’ll also be happy to send you the links to any of the small business loan studies quoted above.