How Much Money Can You Borrow From Lenders?
I regularly hear a familiar question from the founders I work with at Balanced Business Group: “How much can I borrow from a lender?” It’s a valid concern when you’re eager to expand production, invest in a new bottling line, enhance packaging design, or streamline distribution to meet surging demand. My goal is to share insights drawn from my experience helping brands position themselves for stronger financial partnerships.
Many founders surpass $400,000 in trailing 12 months revenue or manage $1 million in monthly inventory to discover business lending limits can vary greatly depending on maturity, collateral, brand velocity, and market traction. It’s never about one simple metric — a lender studies a mix of revenue thresholds, credit history, and operational stability, which sets the stage for securing business financing.
Let’s explore the most important factors that shape borrowing capacity, the types of lenders you might encounter, the steps for preparing for a business loan, and how to match your loan size to real-world goals. Through this lens, you can gain a clear picture of how much money might be available — and how to align it with your brand’s growth.
Factors That Determine How Much You Can Borrow
Several elements influence a brand’s borrowing capacity. Here’s how the main factors usually break down.
Revenue Milestones and Stage
Founders surpassing $400,000 in trailing 12 months, or TTM, revenue tend to gain access to lenders such as Wayflyer and Settle. Brands don't need to be profitable yet, but it helps to maintain at least 12 months of runway in the bank. At this stage, the debt facility covers immediate growth needs and might expand as the business matures.
Collateral and Inventory
Brands with at least $1 million in accounts receivable and/or inventory unlock another tier of non-bank asset-based lenders, including the Palmer Collective, Assembled Brands, and Dwight. Loans can range from $850,000 to over $10 million at interest rates roughly 4-5% lower than initial-stage options. Inventory and AR serve as collateral, which reassures lenders who value tangible assets. Building that kind of monthly average also signals consistent production and reliable sell-through.
Credit History’s Role
A strong credit profile signals reliable repayment patterns. Even if you’re juggling multiple lines of credit — possibly to buy new equipment — demonstrating consistent repayment lifts borrowing limits. Bank lenders, in particular, review personal credit scores if the business lacks a lengthy track record. A positive history with short-term loans or leases indicates you can handle obligations without defaulting.
Moving Toward Profitability
Once a business shows stable profit margins or consistent positive cash flow, bank financing becomes a real possibility. Banks set the lowest interest rates but maintain the strictest approval criteria. To pave the way, show them a track record of successful retail partnerships, dependable distribution channels, and strong financial statements.
Types of Lenders and Loan Options
I’ve witnessed how securing business financing for expansions, rebranding, bridging short-term gaps, or seasonal surges can follow several pathways. Traditional banks remain a strong choice for established brands that value competitive rates but can handle slower underwriting. Online lenders focus on speed and flexible approvals, but they might charge higher interest. Meanwhile, credit unions serve small businesses seeking personalized assistance, and asset-based lenders often fund mid-stage ventures with robust AR or inventory.
Your business goal should also influence your choice of loan product. Lines of credit help manage seasonal demands, unpredictable supplier invoices, short-term marketing pushes, or urgent shipping fees. Term loans work best for expansions, large equipment purchases, major warehouse build-outs, or specialized manufacturing lines, while equipment financing can lock in lower rates by using the machinery itself as collateral.
Some smaller operations rely on credit unions or microlenders if they need less complex funding. In any scenario, I encourage founders to consider how quickly they need capital, the strength of their collateral, their immediate distribution demands, their runway for new product development, and the repayment schedule that aligns with projected cash flow.
Below is a table comparing lenders and loan options.
Lender Type Who They Help Benefits Challenges
Traditional Banks Profitable, steady-revenue businesses Competitive rates, larger loan amounts Stringent underwriting, slower approvals
Credit Unions Local or smaller-scale brands Personalized service, community roots Membership rules, less specialized CPG knowledge
Online Lenders Early-stage, time-sensitive founders Fast approvals, fewer documentation steps Higher interest, shorter repayment periods
Asset-Based Lenders Mid-stage with $1 million-plus AR or Larger lines, collateral-based flexibility Frequent audits, more involved monitoring
inventory process
Profitable, steady-revenue businesses Competitive rates, larger loan amounts Stringent underwriting, slower approvals
Credit Unions Local or smaller-scale brands Personalized service, community roots Membership rules, less specialized CPG knowledge
Online Lenders Early-stage, time-sensitive founders Fast approvals, fewer documentation steps Higher interest, shorter repayment periods
Asset-Based Lenders Mid-stage with $1 million-plus AR or Larger lines, collateral-based flexibility Frequent audits, more involved monitoring process
inventory
Preparing Your Financials for a Strong Loan Application
Preparing for a business loan demands that you thoroughly organize your financial statements and make a persuasive case for how you’ll use borrowed funds to boost profitability.
In my experience guiding founders, lenders appreciate clarity and consistency. Be sure to include:
Essential financial documents: Income statements, balance sheets, P&L accounts, and cash flow projections form the foundation. Segmenting revenue by SKU or product line shows you grasp your costs and margins at a granular level. Lenders want transparency — they often scrutinize the cost of goods sold and overhead expenses — so keep records as accurate as possible.
Common red flags: Unreconciled bank accounts, gaps in recordkeeping, unexplained dips in sales, or incomplete tax records raise eyebrows. Promptly address any anomalies. If your business faced a recall or a supply chain disruption, outline how you handled it and what steps you’ve taken to prevent recurrences. Sharing a concise timeline of growth milestones, along with supportive details such as rising e-commerce sales and positive retail feedback, can reduce concerns.
Professional presentation: Clean, GAAP-compliant figures inspire trust. If you’re short on internal accounting resources, consider professional assistance. At BBG, our finance services focus on clarifying your financials, enabling you to present a credible snapshot that’s easy for lenders to digest. Venturing into external CFO services or specialized bookkeeping can feel like a big step, but immediate outcomes potentially include polished reporting and better strategic insights.
Demonstrated repayment capacity: Lenders weigh risk carefully, so highlight consistent month-over-month increases in sales and overall operating efficiency. Minimizing overhead while boosting top-line growth signals the ability to service debt responsibly.
Matching Loan Amounts to Business Needs
A well-planned approach keeps you from under-borrowing and potentially stalling new initiatives or overextending and creating high-interest burdens. Aligning borrowed funds with concrete goals preserves healthy cash flow and sets a clear path toward measurable returns. Consider the following:
Scaling operations: A brand on the cusp of doubling production might need a term loan for new tanks or a larger packaging line. Think about how quickly those additions can translate into higher sales. If the runway from production to revenue is long, bridging options like a revolving line of credit can fill temporary gaps.
Equipment purchases: Specialized equipment for a more efficient bottling or canning process can require significant upfront capital. Collateral-based or equipment financing deals often feature favorable rates because the asset itself holds tangible value. Consider how those upgrades affect unit economics, production speed, operator training, and maintenance schedules.
Managing cash flow: Seasonal fluctuations challenge many wineries and CPG companies, particularly when large orders coincide with big payouts for raw materials or packaging. Revolving credit lines fit that situation, acting as a buffer you can tap into for short-term projects and repay once sales materialize.
Risks of over- and under-borrowing: Overextending means dedicating more monthly revenue to debt service than necessary — money that might be better directed toward growth. Conversely, borrowing too little can derail marketing pushes or expansions that need full funding to succeed.
Realistic projections: Show lenders a forecast covering best- and worst-case scenarios. Tie your assumptions to real data, such as velocity in existing sales channels, so they see you’ve done your homework.
Position Your Business for Lending Success
Identifying how much money you could borrow and the best way to align that funding with operational milestones helps you move forward with confidence. In my role at BBG, I’ve seen strong financial packages and transparent communication open doors to lenders who believe in your mission. For many founders, it’s the difference between sporadic working capital and a watertight plan to expand, explore multistate distribution, or roll out new product lines.
Ready to refine your approach? Consider reading our guide to the Top 5 Questions Lenders Ask CPG Brands Before Granting a Loan and our article What Do Investors Look for in CPG Brands? These resources clarify typical lender expectations and early equity considerations.
A balanced financing plan keeps debt manageable without stunting expansion. My team and I would love to help you build that plan. If you’d like a personalized consultation on finding the right lenders, optimizing your financials, or strategizing your credit approach, get in touch with BBG today.
Author: Pedro Noyola
Pedro Noyola is the CEO of Balanced Business Group (BBG), a company dedicated to helping Founders in the CPG food and beverage industry gain financial confidence. At BBG, Pedro combines traditional accounting with tailored financial guidance, providing industry-specific insights to ensure sustainable growth for passionate food entrepreneurs. He is also an angel investor and a mentor to emerging CPG brands via SKU and TIG Collective. Pedro’s career spans leadership roles at FluentStream, where he helped the company achieve recognition as one of the Fastest Growing Companies in America by Inc., and Telogis, where he was part of a team that grew the company’s recurring revenue from $50 million to $1.2 billion in under five years.
Pedro holds a BA and MPA from The University of Texas at Austin and an MBA from Harvard Business School. He is an active member of the Young Presidents Organization, continually seeking growth in both leadership and learning. Outside of work, Pedro enjoys family time and outdoor activities, drawing personal fulfillment from his roles as a husband and father.
