Guide

How long after a bankruptcy can you get business funding?

Banks typically want three to five years after discharge. Revenue-based funders commonly consider a discharged Chapter 7 after twelve to twenty-four months, and some will look at a business inside an active Chapter 13 plan with court approval and steady deposits. What matters to them is current monthly revenue, not the filing: a business depositing $15,000 a month consistently tells a funder the rebuild is real.

The clocks, by lender type

A bank or SBA lender reads the credit file, and a bankruptcy sits on it for seven years after a Chapter 13 filing and ten after a Chapter 7. Most want three to five years after discharge and a rebuilt score before they will look.

A revenue-based funder reads the bank statements. Its concern is whether the case is discharged — an open case is a decline almost everywhere except a Chapter 13 with the trustee's blessing — and whether the deposits since show a business that runs. Twelve months after discharge is where files start being considered; twenty-four is where they are priced normally.

Equipment lenders sit in between: the asset carries some of the risk, so a discharged case with a larger down payment can be financed sooner than an unsecured product would allow.

What each underwriter weighs

A BANKA REVENUE-BASED FUNDERPERSONAL CREDIT SCOREheavysomeCOLLATERAL TO PLEDGEheavynot looked atTWO YEARS OF TAX RETURNSheavynot looked atTIME IN BUSINESSheavysomeMONTHLY BANK DEPOSITSsomeheavyDEPOSIT CONSISTENCYnot looked atheavyINDUSTRY AND STATEsomeheavy
The same business, read two different ways. A bank decision is built on credit, collateral and filed accounts; a revenue-based funder builds it on the money moving through your account. That is the whole reason a bank decline says very little about whether you can be funded.

Chapter 7 versus Chapter 13

Lenders generally read a Chapter 13 more kindly than a Chapter 7, because it shows a repayment plan being kept. Some funders will write a small advance to a business whose owner is inside an active Chapter 13, provided the court or trustee approves the new obligation and the deposits are steady. A Chapter 7 discharge is a clean slate on the debts and a harder read for a year or so afterward.

A business bankruptcy and a personal one are read differently too. If the business itself filed and the owner did not, the owner's personal file is what most small-business funders pull, and it may be intact.

What makes the application work

Twelve months of business statements with no returned items and no negative days. Deposits at or above the market's floor, consistently. The discharge order, sent with the application rather than discovered in underwriting. And a sentence on what caused the filing and why it is behind you — a divorce, a medical bill, a failed prior venture — because an underwriter who is given the reason reads the file as a story rather than a flag.

Start small. A modest first advance repaid on schedule is the fastest way back to normal pricing, and it is the only thing that will move a bank's answer sooner than the calendar does.

Sources

Related questions.

Do I have to disclose the bankruptcy?
Yes, if asked, and most applications ask. It is on your credit file and in public records; a funder that finds it after you said no will decline for the omission, not the filing.
Can a new LLC formed after the bankruptcy apply fresh?
The business can, but the owner's personal file comes with it, and time in business restarts with the new entity. A new LLC does not shorten the wait; steady deposits do.
Does a dismissed case count the same as a discharged one?
A dismissed case means the debts were not discharged and may still be collectible, which lenders read as unresolved. A discharge is the clean endpoint they are looking for.

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