Every funder keeps a birthday rule. Before anyone reads your revenue or your credit, an intake screen checks how old your business is against a threshold, and if the answer is too young, the rest of the file never gets its turn. Owners discover this the frustrating way: strong sales, a growing customer list, and a decline that cites nothing but the calendar.
The rule is not arbitrary, and more importantly, it is not one rule. Thresholds vary enormously by product, the way the clock gets measured varies by funder, and under six months there is still a real, if narrower, menu. Here is the landscape as it actually works, so you apply where your age qualifies instead of donating hard inquiries to funders whose screens will bounce you.
Why the clock matters so much to funders
Business funding is repaid out of future revenue, and the only evidence that future revenue will exist is past revenue. A business with two years of deposits has shown it can survive a full seasonal cycle, a slow quarter, an equipment failure, a tax bill. A business at four months has shown it can survive four months. Nothing about the younger business is necessarily worse; there is simply less of it to read, and funders price what they cannot read as risk.
The thresholds also encode survival math. New businesses fail at meaningfully higher rates in their earliest years, and every funder's portfolio has taught it where its own losses cluster. When a funder sets its time in business minimum at six or twelve months, it is drawing a line through its own loss history, which is why the lines differ from shop to shop and why no amount of persuasion moves one.
The thresholds, product by product
Exact cutoffs vary by funder, but the market clusters into recognizable bands:
- Traditional bank term loans and lines: commonly two years or more, often with the tax returns to prove both of them.
- SBA-guaranteed loans: eligibility is set by the program and the participating lender, and while startups can qualify under some programs, most lenders want an operating history or a substantial equity injection and collateral in its place.
- Online term lenders: commonly one to two years.
- Merchant cash advances and revenue-based funding: commonly six months, with a meaningful minority working from three or four months of deposits. The full requirements picture for advances is deposit-driven, which is exactly why the age bar sits lower.
- Equipment financing: often one year, but flexible downward because the equipment itself secures the deal.
- Invoice factoring: frequently the lowest bar of all, because the underwriting rides on your customers' credit, not your history. A young business invoicing established customers can qualify very early.
How the clock actually gets measured
Time in business sounds objective until you ask: time since what? Funders answer differently, and the difference can add or subtract months from your file. Common start dates include the formation date on your articles of organization or incorporation, the date on your EIN assignment letter from the IRS, the date your business bank account opened, and the date revenue first appears in that account. Most funders use the earliest date they can verify with a document; some deposit-driven funders care only about how many months of revenue the statements show, regardless of when the entity was formed.
This creates two practical lessons. First, if you operated as a sole proprietor before forming an LLC, the earlier operating history may count, if you can document it: old statements, licenses, or filed schedules. Say so on the application rather than letting the LLC's recent formation date define you. Second, if you formed the entity long before you started selling, the paper age helps you at intake screens even though underwriters will still see the shorter revenue history. Consistency matters most: the dates on your application, your formation documents, and your statements should tell one coherent story, because mismatched details stall files even when nothing is actually wrong.
Under six months: the honest menu
Below the six-month line, the general-purpose funding market thins out fast, but it does not vanish, and the products that remain share a logic: each one leans on something other than your operating history. Equipment financing leans on the asset. Factoring leans on your customers. A small set of revenue-based funders lean on three or four months of strong, consistent deposits and price the youth in. Business credit cards lean on your personal credit, and for many young businesses they are the quiet workhorse for early expenses.
What genuinely will not work is dressing a young file up as an older one, or applying to a dozen twelve-month-minimum funders hoping one misses the date. The screens do not miss dates. We wrote a full field guide to who actually funds businesses under six months old, including what each option costs and asks in exchange; if you are in that window, that piece is the next read.
And sometimes the honest answer is that three more months of history is worth more than any product available today. Waiting is a strategy when the offer you can get now is small and expensive, and the offer at month seven, with three clean statements behind you, is visibly better.
Make the waiting months count
If you are close to a threshold, the gap months are preparation time, and the preparation is concrete. Run every dollar of revenue through one business account, because months of clean statements are the currency the next application spends. Keep the account healthy: no negative days, balances that hold rather than scrape zero. Start building business credit with vendors who report, so the file that turns six months old has more than a birthday going for it.
Then, before you apply, check what your numbers support with the qualification estimator and assemble the paperwork once with the document checklist tool. A business that crosses the six-month line with clean statements, one account, and a complete file does not just qualify; it qualifies at better pricing than the same business scrambling at month seven with a shoebox of screenshots.
Frequently asked questions
Does time in business mean time since formation or time since first revenue?
It depends on the funder. Many use the earliest verifiable document, often the formation date or EIN letter, for the intake screen, while deposit-driven funders count months of revenue visible in bank statements. If your paper age and revenue age differ, expect the stricter reading from underwriting and present both dates plainly.
I ran the business as a sole proprietor before forming my LLC. Which date counts?
Often the earlier one, if you can document continuous operation: old bank statements, licenses, filed tax schedules, or a DBA registration. Funders differ on this, but you lose nothing by claiming the full history with evidence attached, and an application that explains the transition reads far better than one whose dates look inconsistent.
Can I get any funding with three months in business?
Sometimes. A small set of revenue-based funders work from three or four months of strong deposits, equipment financing can work because the asset secures it, and factoring can work because your customers' credit carries it. Amounts run smaller and pricing runs higher than at six or twelve months, so weigh whether waiting a quarter buys a materially better file.
Do funders verify my start date, or take my word for it?
They verify. Formation records are public, EIN letters are standard stips, and your bank statements date themselves. An overstated start date is treated as misrepresentation rather than optimism, and it can end an otherwise fundable application, so let the documents set the date and build your request around what they show.