Guide

How is time in business measured: incorporation date, first deposit, or license?

For revenue-based funders, from the first business bank deposits — the statements are what they read, so an entity formed two years ago that started depositing six months ago is six months old to them. Banks and SBA lenders lean on the formation date and the first filed return. If you traded as a sole proprietor before forming an LLC, the earlier history often counts if the bank account and the deposits are continuous.

Three different clocks

The state's clock starts at formation: the LLC or corporation's filing date. Banks and SBA lenders use it, alongside the first tax return, because that is what their models read.

The bank's clock starts at the first deposit. Revenue-based funders use it because deposits are what they underwrite; formation paperwork with no deposits behind it is not a business to them. This is the clock that decides whether you clear the six-month floor.

The license's clock, for regulated trades: a contractor's license, a liquor license, a professional registration. Some funders in those trades read it as the start date because the business could not legally have traded before it.

The cases that catch people

Formed the LLC in January, opened the bank account in July: six months old to a funder in January of the next year, not twelve.

Traded as a sole proprietor for three years, then formed an LLC last spring: usually the three years count if the deposits moved to the new account continuously and you can show both sets of statements. Send both.

Bought an existing business: the history may or may not carry over depending on whether the account and the entity continued. See the guide on funding a business you just bought.

Changed banks: the old bank's statements still count. Send them, or the new account's three months looks like a new business.

What to send so you get credit for all of it

Every bank account the business has used, back to the first deposit. The formation documents. The license with its issue date. And a one-line timeline in the cover note: formed, first deposit, license, any entity change. An underwriter who can see the whole line uses the earliest defensible date; one who sees three months of a new account uses three months.

Sources

Related questions.

Does a dormant year in the middle reset the clock?
For a revenue-based funder, largely yes: they read the recent deposit pattern and a gap breaks it. Send the earlier history anyway; it helps the story even if it does not move the date.
I have an EIN from years ago but only started trading recently. Which counts?
The deposits. An old EIN with no revenue behind it is paperwork. Some funders will note the long-standing entity favorably, but the offer is sized on the months with money in them.
Does a franchise's brand age count for a new unit?
Not for revenue-based products; the unit's own deposits are the clock. Franchise lenders and the brand's preferred lenders do take the brand's track record into account for opening loans.

One application · every lender we work with

Find out what you qualify for before you need it.