Entrepreneurship is alive and well in the U.S. New business applications remain well above pre-pandemic levels, according to U.S. Census Bureau data. On top of that, 18% of Americans say they plan to start a business in 2026, according to NerdWallet’s 2026 Consumer Outlook Report.
With so many businesses launching each year, demand for small-business loans hasn’t slowed. Many owners still rely on loans to manage cash flow, fuel growth or cover expenses. But securing funding may be getting harder as SBA rules have changed and banks become more cautious about who they lend to.
To understand which businesses are finding success, we analyzed small-business loans approved through Fundera by NerdWallet’s online marketplace from the second half of 2024 through the first half of 2025. Applicants self-reported details like credit scores, revenue and time in business.
Here’s what we found.
Key findings
- Most approved applicants reported personal credit scores of 700 or higher, though one in five still secured funding with scores below 660. (link)
- While higher-revenue businesses were approved more often and for larger amounts, 22% of approved borrowers reported earning less than $500,000 a year. (link)
- The median time in business among approved borrowers was seven years, but one in four had been operating for four years or less. (link)
- General contractors, restaurants and bars and health services made up the largest share of approvals. (link)
- Sixty-five percent of approved borrowers sought funding for working capital. (link)
- Short-term loans dominated approvals, but SBA and medium-term loans delivered higher amounts. (link)
- On average, small-business owners received 75% of the amount they requested. (link)
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Strong credit scores remain a major advantage
More than half (55%) of approved applicants reported personal credit scores of 700 or higher. Higher scores were also linked to larger loan amounts, according to the data.
Lenders use credit scores to gauge how likely you are to repay a loan. Generally, the higher your score, the less risky you look. This can open the door to bigger loans, better terms and lower interest rates.
But you’re not out of options if you have fair or even bad credit. Our data found that borrowers with credit scores of 659 or below made up 20% of approved applications. Of those approved applicants, 80% reported at least $500,000 in annual revenue, and 71% had been in business for five years or more. This suggests that a bad credit score can be offset by strengths in other areas of your business.
Action steps:
- Improve your credit score by paying bills on time, disputing credit report errors or becoming an authorized user on someone else’s credit card account.
- Boost loan approval odds by adding a co-signer or offering additional collateral.
- Consider alternative lending options. Many online lenders or merchant cash advance companies offer financing for bad-credit borrowers.
High-revenue businesses get approved more often, but low revenue isn’t a dealbreaker
Nearly a quarter of approved businesses (22%) reported earning less than $500,000 a year in revenue. While higher-revenue businesses get approved for loans more often (and for more money), our data shows that if you make at least $100,000 a year, you’ve still got options.
Strong and consistent revenue tells lenders that your business is stable and has the cash flow to handle repayments. That's why many lenders require at least $100,000 in annual income, but online lenders may be more flexible.
You can also explore lower-revenue loan options, like microloans, invoice factoring and some business lines of credit.
Action steps:
- Be upfront with lenders if your business is going through a rough patch, says Manny Tocco, head of sales for business banking at Citizens. Being transparent and showing how you’re addressing revenue challenges builds trust and can boost your chances of getting approved, Tocco said.
- If you aren’t submitting your application right away, explore near-term ways to improve income, like increasing sales, improving customer retention or adding complementary products or services.
» MORE: Business loan requirements
While time in business matters, many newer businesses still get approved
Older businesses tended to receive larger loan amounts on average, but our data shows that newer companies can still qualify for funding. For example, NerdWallet found that one in four approved borrowers reported being in business for four years or less.
Just like revenue and credit scores, a business’s age signals stability. With more than half of businesses closing within their first five years, lenders are understandably leery about lending money to newer businesses — especially startups.
New businesses may be able to boost approval odds by having a strong credit score or high annual revenue. For example, 78% of approved borrowers operating for four years or less reported having a personal credit score of 660 or higher.
If you’re just starting out, there are startup-friendly options, like SBA microloans and loans from online lenders or community development financial institutions (CDFIs).
Action steps:
- If you have assets on hand, like inventory or savings, consider using them as collateral.
- Explore other financing options, like startup business grants or a zero percent APR business credit card.
- Reach out to your local Small Business Development Center for one-on-one guidance on starting a business, applying for financing and more.
Lenders favor businesses with stable demand, growth potential and collateral
Across all approved loans, the largest share went to:
- General contractors.
- Health services (e.g., health practitioner offices and outpatient care centers).
- Restaurants, cafes and bar-lounges.
And, the industries with the highest average loan amounts were:
- Manufacturing.
- Construction and materials.
- Software development.
These industries tend to have stable customer demand, high growth potential, collateral on hand or a combination of all three. These factors help lenders feel better about extending financing.
SBA loan approvals for fiscal year 2026 (which began in October 2025) tell a similar story. Construction and accommodation and food service businesses have the highest share of SBA 7(a) loan approvals so far, while health care and social assistance businesses lead the way in SBA 504 loans.
Action steps:
- Draft a compelling business plan for your loan application that highlights revenue stability, customer retention and growth opportunities.
- Consider industry-specific lenders, which may offer more flexible or tailored loan options.
» MORE: Explore the top SBA lenders
Most borrowers seek working capital
Among approved business owners, 65% said they were seeking funding to cover working capital needs.
Given that many businesses struggle to cover even a single month’s worth of operating expenses, it’s not surprising working capital tops the list. One slow sales week or unexpected cost can put a serious strain on your business, sparking the need for outside funding.
Other top reasons for applying included business expansion and buying equipment, according to our data.
Action steps:
- Build a cash reserve so you’re not scrambling to find financing or dipping into personal savings every time your business hits a bump in the road. Shoot for at least six months’ worth of operating expenses, recommends Helen Dao, certified financial planner and senior vice president of investments at Stirlingshire Investments.
- Consider opening a business line of credit before you need it, Dao said. Having one provides flexibility in case misfortune strikes your business or the economy. Because by that time, getting approved for new financing may be much harder.
» MORE: Best working capital loans
Short-term loans dominate approvals, but SBA and medium-term loans deliver the biggest amounts
Short-term loans were the most commonly approved type of financing, followed by short-term lines of credit and merchant cash advances.
Short-term business loans tend to be easier to qualify for and fund faster compared with long-term loans. The downside? They often come with higher interest rates.
But because they’re usually repaid within 12 months, total interest costs may end up being smaller than a longer term loan with a lower rate.
When it comes to average loan size, medium-term loans (with two- to five-year repayment terms) and SBA loans led the way. These are harder to qualify for, but their longer repayment terms and lower interest rates make them a good choice for bigger, long-term investments.
Action step:
- Match your needs to the right loan type. For example, if you’re looking for money to fuel long-term growth, a larger loan from a bank or SBA lender may be best. If you need cash quickly to cover an unexpected repair and don’t already have a business line of credit with a bank or SBA lender, online loans may be the best choice.
Borrowers receive 75% of what they asked for, on average
Across approved borrowers, the typical business received three-quarters of what they originally requested.
It’s not uncommon to get less than what you ask for. A 2024 Federal Reserve study found that, among 2,724 small businesses that applied for a business loan, only 52% reported receiving full funding.
This can happen for a few reasons. Borrowers may overestimate how much they need. Other times, the lender isn’t willing to give the full amount, either due to loan caps or because the applicant’s qualifications makes full approval too risky.
Action steps:
- Get a good idea of exactly how much you need and what you can realistically qualify for. Working with a professional, like a business loan broker, can help. You may also be able to access free advice through your local Small Business Development Center (SBDC).
- Use a business loan calculator to make sure you can comfortably afford repayments before accepting a loan.
Methodology
This study analyzes loan application data from small-business owners approved for financing through Fundera by NerdWallet’s loans marketplace between July 2024 and June 2025. Applicants self-reported data for personal credit scores, business revenue, business start dates, funding purposes, industry information and loan amount requested. We also analyzed the actual amount applicants received and the type of business loan borrowers ended up with.
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- 1. Federal Reserve Bank of St. Louis. Business Applications: Total for All NAICS in the United States. Accessed Jan 20, 2026.
- 2. Bureau of Labor Statistics. Survival of private sector establishments by opening year. Accessed Jan 20, 2026.
- 3. U.S. Small Business Administration. 7(a) & 504 Summary Report. Accessed Jan 20, 2026.
- 4. Bluevine. Survey: 39% of small businesses have less than a month of cash on hand. Accessed Jan 20, 2026.
- 5. Fed Small Business. 2025 Report on Employer Firms: Findings from the 2024 Small Business Credit Survey. Accessed Jan 20, 2026.
