Year one is a cash problem, not a profit problem
Almost every new business spends before it earns. Equipment, stock, signage, licenses, a deposit on space and the first hires all arrive ahead of steady revenue. The measure that matters in year one is runway: how many months you can keep operating if sales stay where they are today.
Calculate your runway
- Add up fixed monthly costs: rent, insurance, software, loan payments, any base payroll.
- Add average variable costs.
- Subtract average monthly deposits.
- Divide your current cash balance by that net monthly burn.
For illustration, a balance of $60,000 and a burn of $10,000 a month gives six months. Those numbers are an example. If runway is under six months and sales are not clearly rising, plan your next step before it becomes urgent.
Why bank statements are your best asset
A startup has no long operating history, but it does have a bank account. We ask for about three months of business bank statements, which means a business that has been taking deposits for about a quarter has something to show. Run all income and expenses through one business account from day one. Clean statements are the cheapest credit-building habit there is.
A first-year timeline
| Stage | Focus | Funding question |
|---|---|---|
| Months 0-3 | Open account, first customers, learn costs | Usually owner savings; statements are still thin |
| Months 3-6 | Repeatable sales, pricing, first hire | You may have enough statement history to apply |
| Months 6-12 | Capacity: equipment, stock, second crew | Working capital tied to a specific expansion |
Fixed vs flexible costs for a new business
New owners often commit to fixed costs, such as a lease or a salaried hire, before they know what revenue looks like. Where you can, favor flexible costs in the first year: month-to-month space, hourly help, shared equipment. Flexibility keeps your runway longer, which gives your sales more time to mature. It also keeps your monthly payments manageable when you do apply for funding.
What we consider
Funding runs from $25,000 to $5,000,000, with funding possible in as little as 24 hours. We consider FICO scores of 500 and above, ask for about three months of statements and require no tax returns. Sole proprietors can apply, which describes many first-year businesses. The application takes about five minutes and uses a soft credit pull.
We do not promise outcomes. A very new business with very little deposit activity may not be ready yet, and that is useful to know. If you are unsure, build a few more weeks of clean statements first.
Mistakes to avoid
- Mixing personal and business spending in the same account.
- Borrowing to cover a business that has not found customers yet.
- Spending on equipment before testing demand.
- Waiting until cash is nearly gone to look at options.
When you are ready, apply here.