FAQ
Business Loan
Questions, Answered.
Clear answers to the most common questions before you apply, covering rates, eligibility, process, and more.
1
What credit score do I need to qualify for a business loan?
The minimum credit score depends on the lender type. Traditional banks require 680+ for the most competitive rates. SBA loans generally need a personal FICO of 620 to 680. Online lenders like OnDeck and Lendio accept scores as low as 560 to 625. Marketplace lenders like Lendzi accept scores from 500+, though expect higher rates. Fundivi requires no credit check at all, basing decisions entirely on your monthly revenue. Credit score is not the only factor, as lenders also weigh annual revenue, time in business, and debt-to-income ratio. Strong cash flow can offset a lower score.
2
What is revenue-based financing and how is it different from a traditional loan?
Revenue-based financing (RBF) is a type of business funding where repayment is tied directly to your sales, typically a fixed percentage of your daily or weekly gross revenue, rather than a fixed monthly payment. Key difference: if your revenue drops 30% this month, your repayment drops 30% too. This makes it fundamentally different from a term loan, where the payment never changes regardless of how business is performing. RBF is ideal for businesses with strong, consistent revenue but limited credit history. The cost is quoted as a factor rate (e.g. 1.25x) meaning $100,000 borrowed at a 1.25 factor rate costs $125,000 total to repay.
3
What are typical business loan interest rates in 0?
Rates vary significantly by lender type and your credit profile. Jul 2026 benchmarks: Traditional bank loans: 6.7% to 11.5% APR for well-qualified borrowers. SBA 7(a) loans: 9.75% to 13.25% variable, based on the current prime rate of 6.75%. Online lenders: 7% to 30%+ APR. Short-term / alternative lenders: 35% to 99% APR. Revenue-based financing: Factor rates of 1.10 to 1.40x. Key rule: if the return your borrowed capital generates exceeds what you’re paying in interest, the loan is working for your business. Always calculate the total cost, not just the monthly payment.
4
How fast can I get funded after applying?
Funding timelines depend entirely on the lender type. Speed and rate are usually a trade-off: Online direct lenders (Fundivi, OnDeck, Biz2Credit): As fast as the same business day. Apply in the morning, receive funds by evening. Fundivi’s AI underwriting can issue an approval decision in as little as 3 hours. Lending marketplaces (Lendio, Lendzi): Typically 24 hours to a few days. Traditional banks: Usually 2 to 4 weeks. SBA loans: 30 to 90 days. The most thorough process, but worth it for the lowest rates and longest terms.
5
What is the difference between a term loan and a line of credit?
Term loan: You receive a lump sum upfront and repay in fixed instalments over a set period. Best for one-time investments such as equipment purchases, renovations, or expansion.
Business line of credit: A revolving credit limit you draw from and repay as needed. You only pay interest on what you use, and funds become available again once repaid. Best for managing ongoing cash flow gaps, seasonal dips, or time-sensitive opportunities. If you know exactly how much you need and why, a term loan is usually more cost-effective.
6
Will applying affect my personal credit score?
It depends on how you apply and which lender you use. Soft pull or no pull, zero impact: Fundivi runs no credit check at all. Most online lenders and marketplaces (OnDeck, Lendio, SoFi, Lendzi) let you check eligibility without a hard inquiry. Hard pull, temporary dip of 5 to 10 points: This happens once you formally accept a loan offer. Best practice: start with lenders that offer pre-qualification without a hard pull. Only trigger a hard inquiry once you have identified the specific offer you want to proceed with.
7
What fees should I watch out for beyond the interest rate?
The interest rate is only part of the true cost. These fees can significantly increase what you pay: Origination fee: Typically 1% to 4%, often deducted from your disbursement. Closing costs: Apply to SBA and real estate-backed loans, usually 2% to 5%. Prepayment penalty: Some lenders charge 3% to 5% of the remaining principal if you repay early. Platform or funding fee: Some marketplaces charge for connecting you to a lender (Fundivi and Lendzi charge none). Always request the full APR, not just the stated interest rate.
8
Do I need collateral to get a business loan?
Not always. Unsecured loans are based on creditworthiness and cash flow only, available from most online lenders, but they come with higher rates. Secured loans are backed by business assets (equipment, real estate, receivables) and offer lower rates and larger amounts. Personal guarantee: Many lenders require a personal guarantee even on unsecured loans, meaning your personal assets could be at risk if the business defaults. If your business has limited assets, start with unsecured options from online lenders.
