Most lenders size a business loan at 10-30% of annual revenue for term loans, or 70-120% of average monthly deposits for working capital products. A business doing $1.2M/year in revenue ($100,000/month in deposits) typically qualifies for somewhere between $120,000 and $360,000 in annual-revenue-based products, or $70,000-$120,000 on a working-capital facility sized off monthly deposits.
The exact ceiling depends on which sizing method the product uses, plus your credit, existing debt, and collateral. Here's how each product actually calculates your maximum.
The three sizing methods lenders actually use
'How much can I borrow' has three different answers depending on which underwriting model applies to the product you're asking about. Knowing which one governs your file tells you which number to calculate first.
- Revenue multiple: 10-30% of annual revenue - common for bank and SBA term loans
- Monthly deposit multiple: 70-120% of average monthly deposits - common for working capital loans and revenue-based advances
- Collateral value: 70-100% of appraised or invoiced asset value - governs equipment financing, vehicle financing, and invoice factoring
What the ceiling looks like at real revenue levels
| Monthly revenue | Annual revenue | Working capital range (70-120% monthly) | Term loan range (10-30% annual) |
|---|---|---|---|
| $25,000 | $300,000 | $17,500-$30,000 | $30,000-$90,000 |
| $50,000 | $600,000 | $35,000-$60,000 | $60,000-$180,000 |
| $100,000 | $1.2M | $70,000-$120,000 | $120,000-$360,000 |
| $250,000 | $3M | $175,000-$300,000 | $300,000-$900,000 |
| $500,000 | $6M | $350,000-$600,000 | $600,000-$1.8M |
What pushes you toward the top or bottom of the range
Two businesses with identical revenue can qualify for very different maximums. Credit score, time in business, existing debt payments, and bank statement cleanliness all move you up or down within the range - sometimes out of it entirely.
- Higher end: 650+ credit, 2+ years in business, no negative-balance days, minimal existing debt payments relative to revenue
- Lower end: sub-600 credit, under 2 years in business, existing loan or advance payments already consuming revenue, occasional negative balances
- Collateral changes the math entirely: equipment and vehicle financing can exceed both revenue-based ranges above because the asset - not the deposits - secures the loan
Existing debt shrinks your ceiling fast
Lenders look at debt service coverage - how much of your revenue is already committed to existing loan or advance payments - not just top-line revenue. A business with $100,000/month in deposits but $25,000/month already going to two existing advances qualifies for far less new capital than the revenue alone suggests, because the lender is sizing against what's left over, not the gross number.
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How to size the ask instead of guessing
Borrowing the theoretical maximum is rarely the right move even when you qualify for it. Start from what you actually need the capital for, confirm your revenue can service that specific payment comfortably, and only then check where that amount falls in your qualification range. A loan sized to the need, not the ceiling, is easier to approve, cheaper to carry, and doesn't strand you with payment obligations that outlast the reason you borrowed.
- Calculate the specific need (inventory buy, equipment, payroll gap, expansion cost)
- Confirm monthly revenue can absorb the new payment alongside existing obligations
- Check where that amount sits within your product-specific qualification range
- If it's near or above your ceiling, consider whether collateral (equipment, invoices) can extend the range
We tell you the real number, not the optimistic one
Dealerun matches you with funding partners who compete to fund your file. Up to $5M per deal, offers in hours, no credit impact to check, 4.8/5-rated specialists. Share your revenue and existing debt and our specialists will tell you honestly where you land in the range - and which partners size it most generously for your specific profile.
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FAQ
How much can my business borrow based on revenue?+
Term loans typically size at 10-30% of annual revenue; working capital products size at 70-120% of average monthly deposits. A business with $1.2M in annual revenue generally qualifies somewhere between $120,000 and $360,000 depending on the product and your credit profile.
Does existing debt lower how much I can borrow?+
Yes, significantly. Lenders size new loans against revenue left over after existing debt payments, not gross revenue. A business already carrying heavy advance or loan payments will qualify for meaningfully less new capital than the revenue alone would suggest.
Can I borrow more than 30% of my annual revenue?+
Yes, through collateral-based products - equipment financing, vehicle financing, and invoice factoring size against asset or invoice value rather than revenue, and can exceed revenue-based ranges when the collateral supports it.
What's the fastest way to find out my actual borrowing limit?+
Share your monthly revenue, credit score range, and existing debt payments with a broker who can check across multiple lender sizing models at once via soft pull - this gives a real range in minutes instead of guessing from a single rule of thumb.
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