Who is Eligible for FundLocal Financing?

At FundLocal, we strive to provide flexible and accessible financing solutions for a wide range of small businesses. Whether you're looking for a business line of credit, equipment financing, or a working capital loan, our goal is to help you access the funding you need to grow and manage your business. To ensure your business qualifies for financing, it’s important to understand our eligibility criteria and the documents required for applying.

Here’s a detailed guide on who is eligible for FundLocal financing and what you need to meet the requirements.

To qualify for financing with FundLocal, your business must meet certain minimum criteria. These include factors related to how long your business has been operating, its revenue, and its financial health. Below are the key requirements you’ll need to meet:

1. Business Age

Your business must have been operational for at least 6 months to be eligible for financing. This requirement ensures that your business has had time to generate revenue and establish a financial track record.

• Minimum Requirement: 6 months in business

• Why It’s Important: Lenders need to see that your business is stable and capable of generating consistent income. A business that has been operating for at least 6 months has a track record that demonstrates it can manage cash flow and handle repayments.

2. Minimum Annual Revenue

FundLocal requires businesses to have a minimum annual revenue of $100,000. This threshold ensures that your business has sufficient cash flow to cover operating expenses and loan repayments.

• Minimum Requirement: $100,000 in annual revenue

• Why It’s Important: Annual revenue helps lenders assess your business’s ability to repay the loan. Consistent income indicates financial stability and the capacity to manage the loan payments.

3. Business Location

Your business must be located in the United States to qualify for FundLocal financing. While we serve businesses in most states, certain state-specific regulations (e.g., in California, New York, and Utah) may require additional documentation.

• Minimum Requirement: Must be operating in the U.S.

• Why It’s Important: State regulations can affect how we evaluate your business’s eligibility, and we work within these guidelines to ensure compliance and accuracy in the funding process.

4. Business Bank Account

To receive funding and manage repayments, you’ll need a dedicated business bank account. This allows us to track your business’s financial activity and ensures that your personal finances are kept separate from your business finances.

• Minimum Requirement: Active business checking account

• Why It’s Important: A separate business bank account helps verify your business’s cash flow and provides a clear view of your financial transactions, which is crucial for assessing your loan eligibility.

5. Business Structure and Registration

Your business must be legally registered and operating under an official business structure, such as an LLC, corporation, or sole proprietorship. You should also have any necessary business licenses or permits.

• Minimum Requirement: A legally registered business (LLC, Corporation, Sole Proprietorship, etc.)

• Why It’s Important: A valid business structure ensures that your business is legitimate and compliant with state and federal laws, which is critical for receiving financing.

6. Recent Business Bank Statements

To assess your business’s cash flow and financial stability, FundLocal requires you to provide recent business bank statements as part of the application process. The number of statements required depends on your state:

• For most states: You’ll need to submit 3 months of business bank statements.

• For California, New York, and Utah: You’ll need to submit 4 months of business bank statements.

• Why It’s Important: Bank statements provide insight into your business’s revenue patterns, daily balances, and overall financial health. Consistent deposits and sufficient balances are strong indicators of your ability to repay the loan.

Depending on the type of financing you are applying for—whether it’s a business line of credit, equipment financing, or a working capital loan—there may be additional criteria or documentation required.

1. Business Line of Credit

• Credit History: While a hard credit check is not required for initial quotes, FundLocal may perform a soft credit inquiry to evaluate your business’s creditworthiness. A soft credit check does not affect your credit score.

• Revenue and Cash Flow: You will need to demonstrate sufficient revenue and cash flow to handle the flexibility of a revolving line of credit.

2. Equipment Financing

• Equipment Details: When applying for equipment financing, you’ll need to provide information about the equipment you plan to purchase, including the cost, type, and expected business impact.

• Collateral: The equipment itself usually serves as collateral for the loan, so no additional collateral is typically required.

3. Working Capital Loan

• Short-Term Cash Flow Needs: For a working capital loan, we’ll assess your short-term cash flow needs to ensure that the loan amount aligns with your operational requirements.

• Repayment Ability: You should demonstrate the ability to repay the loan based on your current revenue and operational cash flow.

In addition to the basic eligibility requirements, other factors may influence your ability to qualify for FundLocal financing:

1. No Open Bankruptcies

Businesses with active or ongoing bankruptcy proceedings are typically not eligible for financing. However, if your business has exited bankruptcy and is back on stable financial footing, you may still qualify.

• Minimum Requirement: No open or active bankruptcies

• Why It’s Important: Active bankruptcies signal financial instability, making it harder to evaluate your business’s ability to repay a loan.

2. Personal and Business Credit

FundLocal does not require a hard credit check for initial funding quotes, which means exploring your options won’t impact your credit score. However, a soft credit inquiry may be performed as part of the approval process to assess your credit history.

• Minimum Requirement: A soft credit check may be performed based on your application and loan amount.

• Why It’s Important: While credit isn’t the only factor in approving a loan, having a solid credit history can help improve your chances of securing better terms and larger loan amounts.

3. Industry Type

FundLocal serves a wide range of industries, including construction, retail, restaurants, manufacturing, and more. However, certain high-risk or highly regulated industries may require additional documentation or review.

• Why It’s Important: Different industries present different levels of risk, so we review each business based on its specific financial circumstances and industry regulations.

If your business meets the eligibility criteria and you’re ready to apply, the process is simple:

1. Provide basic business information: Start by filling out a form with your business’s key details.

2. Submit business bank statements: Upload your recent business bank statements (3 to 4 months).

3. Get a no-obligation quote: You’ll receive a tailored funding offer without a hard credit check.

4. Complete the application: After accepting the quote, provide any additional documentation required for approval.

At FundLocal, we’re committed to helping businesses access the funding they need to grow and succeed. If you have any questions about your eligibility or the application process, our support team is here to help guide you through every step. Ready to explore your funding options? Start your application today!