Business Fundability vs. Business Bankability
(“Fundable” vs. “Bankable” in plain English)
Fundable – Can you attract any money right now?
A fundable business looks investable to someone, somewhere—angels, online lenders, revenue-based financiers, crowdfunding backers, or even friends-and-family. The bar is relative: a brand-new app with zero revenue can still be “fundable” if the story, market size, and team excite an investor. Key drivers include:
- Scalable idea or growth narrative
- Strong founder credibility / track record
- Business credit file taking shape (even thin)
- Personal credit > 650–680
- Clean public records (no liens, recent bankruptcies)
Think of it as “will someone write me a check today?”—regardless of price, term, or structure.
Bankable – Can you qualify for traditional bank credit at prime-like rates?
A bankable business passes the conservative underwriting test of FDIC-insured lenders and the SBA. It is measured by hard numbers, not narrative:
- ≥ 2 years operating history (most banks)
- Stable or rising profitability (positive net income & cash flow)
- Debt-service-coverage ≥ 1.25×
- Personal credit ≥ 690–720 (owner)
- Collateral (or sufficient guaranty coverage)
- Clean tax transcripts, UCC filings, and banking history
Being bankable means the cheapest capital—SBA 7(a) loans, bank lines of credit, equipment term loans—will open their doors.
Why the difference matters
- Fundable ≠ Bankable: A food-truck concept might crowdfund $50 k tomorrow yet still be years away from an SBA loan.
- Bankable ⇒ Fundable (by default): Once you clear bank hurdles, most alternate lenders will also compete for your deal.
Road-map to move from Fundable → Bankable
- Use short-term fundable capital (RBF, micro-loans, equipment leases) to build revenue history and on-time payment records.
- Tighten bookkeeping, file clean taxes, and keep personal credit trending up.
- After 12–24 months of provable cash flow, refinance expensive fundable debt into a bankable SBA or conventional loan.
In short:
Fundable gets you money now; Bankable gets you cheap money later.
Advantages of a Bankable Business
A bankable business is one that traditional lenders—banks, credit unions, SBA programs—regard as a safe, low-risk borrower. Achieving that status unlocks a cluster of concrete, measurable advantages:
- Cheapest Capital Available
You qualify for prime-based or SBA-capped interest rates that are often 3-8 percentage points lower than online or alternative lenders . - Larger Check Sizes
Banks routinely extend six- and seven-figure lines of credit, term loans, or commercial real-estate mortgages because your financials support the higher exposure . - Longer Repayment Horizons
Instead of 6- to 18-month payback demands, you can secure 7-, 10-, or 25-year amortizations, dramatically shrinking monthly cash-flow pressure . - Minimal Personal Risk
With strong business credit and collateral coverage, lenders drop or sharply limit personal guarantees, keeping your home and personal assets off the table . - Speed & Negotiating Power
A bankable file (clean tax returns, 1.25×+ debt-service coverage, 690+ credit) often earns expedited underwriting and the leverage to negotiate covenants, rates, and fees . - Supplier & Investor Magnetism
Trade vendors extend net-60 or net-90 terms, and outside investors view you as a co-investment-ready platform, not a rescue case . - Strategic Flexibility
Low-cost, long-term funding lets you pounce on acquisitions, large inventory buys, or expansion projects without waiting for the next fund-raising cycle . - Recession Resilience
When credit markets tighten, bankable firms retain access to emergency lines, while competitors scramble for expensive stop-gaps . - Premium Valuation Multiples
At exit, buyers and investors pay higher EBITDA multiples for businesses with established banking relationships and audited, lender-grade financials . - Built-In Advisory Ecosystem
Bankers, CPAs, and SBA resource partners proactively offer mentoring, industry data, and networking—free perks that non-bankable firms rarely receive .
In short, becoming bankable turns your balance sheet into a competitive weapon: cheaper money today, bigger opportunities tomorrow, and a safety net for whatever the market throws at you next.
Fund your business today and start the process of becoming bankable “tomorrow.”
BusinessMoney.broker 