Eligibility varies depending on the type of financing, but most lenders evaluate similar factors to assess a business’s capacity to repay.

Time in Business is a critical factor, as lenders often prefer businesses with a proven operational history. According to the U.S. Bureau of Labor Statistics (BLS), approximately 20%¹ of new businesses fail during the first two years of being open, making lenders cautious about approving financing for newer ventures. However, some financing options—particularly revenue-based products—are more flexible, considering shorter durations if the business shows strong performance.

Similarly, annual revenue and cash flow provide insight into whether the business can handle repayments. Consistent revenue signals stability, which is reassuring for lenders, especially during slower seasons. According to the Federal Reserve, 54%² of businesses that faced financial challenges named uneven cash flow as one of the problems they navigated.

Credit scores, both personal and business, also play a vital role. While many business owners keep track of their personal credit score, a surprising 72%³ of small business owners don’t know their business credit score, according to a survey by the Small Business Administration. Since business credit scores reflect payment history with vendors and other financial institutions, monitoring and maintaining a healthy score is essential to boost approval chances and secure lower fees.

Sales history, particularly for eCommerce sellers, highlights the business’s consistency and ability to generate predictable revenue. For sellers on platforms like eBay, demonstrating a steady track record of sales often enhances eligibility. Lenders will also review existing debt and financial obligations to assess how much additional financing the business can reasonably manage without overextending.

Navigating the financing process doesn’t have to be daunting. Preparation and understanding of what lenders expect can speed up approvals and improve outcomes.

Defining your financing goals is the first step. Whether the capital is for expanding inventory, covering operational expenses, or scaling business operations, aligning the financing product with the intended purpose increases the likelihood of success. Once the objectives are clear, it’s time to explore the right financing options—ranging from term loans for long-term investments to merchant cash advances that adapt to fluctuating sales.

Gathering the necessary documentation in advance reduces delays and ensures a smoother process. Lenders typically require business bank statements, tax returns, and sales records.

Submitting an application is often a quick online process, but accuracy is essential to avoid unnecessary processing delays. Once submitted, applications undergo underwriting, where lenders assess financial performance before making a decision. If approved, funds are often disbursed quickly—sometimes within 24 to 72 hours.

For eBay sellers, the financing landscape offers unique advantages. eBay Seller Capital, powered by partners like Liberis and iBusiness Funding, leverages real-time sales data to pre-qualify sellers for tailored financing options. This means minimal paperwork and faster decision-making, making it easier for sellers to access the capital they need.

Products like the Business Cash Advance (BCA) and Flexible Cash Advance (FCA) offer payment structures that align with eBay sales performance, ensuring flexibility during slower periods. For sellers seeking more traditional solutions, term loans through iBusiness Funding provide financing to support long-term growth. 

Improving eligibility is not just about meeting minimum criteria but optimizing your business profile to appeal to lenders. Monitoring and improving your business credit score, ensuring consistent revenue patterns, and maintaining manageable financial obligations all contribute to a stronger application.

Business owners who proactively track their credit and prepare for seasonal fluctuations demonstrate readiness and reliability, giving lenders more confidence in approving their requests. For eCommerce sellers, showing consistent sales performance and taking advantage of flexible financing options can make a significant difference in securing the right type of capital.

¹ U.S. Bureau of Labor Statistics. "Table 7. Survival of Private Sector Establishments by Opening Year."

² https://www.fedsmallbusiness.org/reports/survey/2023/2023-report-on-employer-firms

³ https://www.sba.gov/blog/10-stats-explain-why-business-credit-important-small-business
 

Disclaimer: This article is for informational purposes only and does not constitute financial, legal, or tax advice. eBay is not a lender and does not make credit decisions. Financing is provided by third-party lending partners and is subject to their terms and eligibility requirements. Individual results, including loan approval and terms, may vary based on the lender’s criteria.