Ravenrock Funding Group, a small-business funding broker in Sarasota, Florida, explains why lending partners ask how long a business has operated, how the answer changes the options, and what records help a newer business. Partners set their own minimums; this post states none. In a county where 16.8% of employed residents are self-employed, the question comes up constantly.
Why partners ask the question
Time in business is a stand-in for evidence. A business with a long run of bank statements and tax returns shows a partner how revenue behaves through good months and bad. A newer business has less to show, so the partner has to lean harder on other things: the owner's credit, collateral, or a contract that proves income is coming.
A question Sarasota County, FL owners face often
Sarasota County has an unusually large base of people working for themselves. The American Community Survey (2020-2024) puts the self-employed share of employed residents at 16.8% (+/- 0.8), against 12.8% (+/- 0.1) for Florida as a whole. Nonemployer Statistics counted 59,161 businesses with no paid employees in the county in 2024.
Many of those businesses are young, or were run informally before becoming an LLC. That makes the start date itself a question: is it when the owner began working, when the LLC was formed, or when the business bank account opened? Partners usually go by records, so the documented date is what counts. The Sarasota, FL page has more of the county figures.
How time in business changes the options
| Option | What partners lean on for a newer business |
|---|---|
| Term loan | Usually tax returns and a longer track record; newer firms face more questions |
| Line of credit | A history of deposits that shows the line will be paid down |
| Working capital | Recent bank statements and steady deposits |
| Equipment financing | The equipment itself as collateral, plus the owner's credit |
| Inventory financing | The stock's resale value and sales history |
This is a general pattern, not a rule. Each partner sets its own minimums, and we do not quote them because they vary and change. The comparison of all six options explains each structure.
Why equipment can be the exception
When the money buys an asset that secures the deal, the partner has a fallback if payments stop. That is why equipment financing is often the first option a newer business can realistically pursue, particularly for equipment with a clear resale market.
What about SBA loans?
Owners also ask how long they need to be in business to get an SBA loan. Ravenrock Funding Group does not arrange SBA-backed loans, so we do not answer for those programs. A small business development adviser can explain them; our resource directory explains where to look.
Records that prove the time you have
- A state business-entity record showing the formation date and an active status
- Business bank statements from the account's opening onward
- Tax returns, including any filed before the business became an LLC
- A fictitious name filing if you trade under another name
- Contracts or invoices that show steady clients
If your record has gaps, such as a missed annual report or a trade name that was never filed, fix them first. Our Sunbiz annual report and fictitious name checklist covers what partners compare.
Buying an existing business
Buying an established business can bring its history with it, if the records transfer. Partners may look at the seller's statements and tax returns alongside the buyer's experience. Make sure the purchase agreement and the state records make the change of ownership clear, because a partner will compare them.
Mistakes that make a business look newer than it is
- Running business income through a personal account for the first year
- Opening a new bank account after a name change, which resets the visible history
- Forming a new LLC for an existing business without keeping records that link the two
If the honest answer is 'not yet'
Sometimes the right move is to wait, build a few more months of statements, and come back. We would rather say that on the first call than send a request that is likely to be declined. Other posts cover related questions.
By Ravenrock Funding Group · Updated