How much business loan a $500K-revenue business can get
Published 2026-11-07 · eLoanTree Blog
“My business does $500,000 a year — how much can I borrow?” It is one of the most common questions small-business owners ask, and the honest answer is: revenue starts the conversation, but cash flow decides the number. Here is how lenders actually size a loan.
Key Takeaways
- Revenue starts the conversation, but cash flow decides the number — lenders lend against the money left over to repay them, not against the top line.
- Same $500,000 revenue, very different outcomes (illustrative, DSCR near 1.25): service business with $175,000 cash flow, roughly $200K–$400K; retail with $100,000, roughly $100K–$250K; restaurant with $60,000, roughly $50K–$120K.
- Most lenders calculate DSCR — annual cash flow available for payments divided by annual payments on all business debt — and many look for around 1.20–1.25 or higher.
- Credit history, time in business (two or more years is a common comfort point), existing debt, collateral, and loan purpose all move the number up or down.
- Sanity check before you apply: if annual payments on the loan you want would eat more than about 75–80% of your SDE, most lenders will hesitate.
- A $500K-revenue business might qualify for anything from under $50K to several hundred thousand dollars.
1. Revenue is not the same as borrowing power
Two businesses can both report $500K in revenue and qualify for very different amounts. A consulting firm with $500K revenue and $200K of owner earnings is very different from a restaurant with $500K revenue and $40K left after food, labor, and rent. Lenders lend against the money left over to repay them — not against the top line.
2. The number lenders watch: debt service coverage
Most lenders calculate a debt service coverage ratio (DSCR): your annual cash flow available for payments, divided by the annual payments on all business debt including the new loan. Many lenders look for a DSCR around 1.20–1.25 or higher, meaning cash flow covers payments with room to spare. Requirements vary by lender and program — nothing here is a guarantee.
| Scenario | Revenue | Cash flow (SDE) | Illustrative loan range* |
|---|---|---|---|
| Service business, strong margins | $500,000 | $175,000 | Roughly $200K–$400K |
| Retail business, average margins | $500,000 | $100,000 | Roughly $100K–$250K |
| Restaurant, thin margins | $500,000 | $60,000 | Roughly $50K–$120K |
3. What else moves the number up or down
- Credit history: Stronger owner and business credit generally supports larger amounts and better terms.
- Time in business: Two or more years of operating history is a common comfort point; SBA programs have their own rules.
- Existing debt: Current loans and leases reduce the room for new payments.
- Collateral: Equipment, real estate, or receivables can support a larger loan.
- Loan purpose: Buying an income-producing asset is viewed differently from covering a shortfall.
4. A practical way to estimate before you apply
Take your SDE — profit plus your salary and owner benefits. Multiply a conservative share of it by a loan term to sanity-check affordability: if annual payments on the loan you want would eat more than about 75–80% of your SDE, most lenders will hesitate. Our free estimator can also show what your business might be worth, which matters for acquisition and SBA loans.
5. The bottom line
A $500K-revenue business might qualify for anything from under $50K to several hundred thousand dollars. The fastest way to a real answer is a conversation with a licensed loan officer who can see your full picture.
Keep reading
Continue with a related guide below. Educational only — no rate or approval is guaranteed.
Sources & further reading
Every figure in this article is dated and sourced in the text above. These official sources were used — open them to check the current figures: