Resources / Sizing
How much can my business borrow?
Every funder has a sizing formula, and most won't show it to you. The inputs are nearly universal, though, so here's the actual math — for advances and for term loans — so you can ballpark your own number before anyone pulls anything.
Advances: a multiple of monthly revenue
Short-term funding is sized as a multiple of true monthly operating revenue (deposits minus transfers, loan proceeds, and refunds — here's how that's measured). The industry range is roughly 70% to 120% of one month's revenue:
| True monthly revenue | Typical advance range |
|---|---|
| $25,000 | $17,000 – $30,000 |
| $60,000 | $42,000 – $72,000 |
| $150,000 | $105,000 – $180,000 |
| $400,000 | $280,000 – $480,000 |
Where you land inside the range is driven by the quality signals: NSFs, negative days, average balance, deposit consistency, and how much of your revenue is already committed to other positions.
Term loans: cash-flow coverage, not just revenue
Larger, longer money ($250K–$5M over 1–5 years) is sized on debt-service coverage: can your monthly free cash flow cover the new payment with room to spare? The standard bar is a coverage ratio of 1.25× or better — for every $1 of new monthly payment, underwriting wants to see at least $1.25 of monthly cash flow after existing obligations.
Practical rule of thumb: a healthy business can typically term-finance 4–8× its monthly revenue when margins and balances support the payment. A $300K/month distributor with clean statements and modest existing debt can credibly carry a $1.5M–$2M term loan; the same revenue with thin balances and two open advances cannot.
What moves your number up
- Three clean months — no NSFs, no negative days — before applying
- All revenue in one operating account, so it all counts
- Paying down or consolidating positions — freed-up withhold converts almost dollar-for-dollar into new capacity
- Rising deposit trend — underwriting weights the most recent month hardest, in both directions
- Books that match the bank (for term loans) — a P&L that reconciles to deposits clears coverage analysis fast
What doesn't move it
Asking for more. The request field on an application is a preference, not an input to the formula — funders size from the statements. A $50K business requesting $500K just signals that expectations need a phone call.