What Are Business Revenue Trends and How Are They Calculated?

Are you seeking a low-cost small business loan? Banks consider a number of ratios to evaluate a company’s financial health before they agree to grant a loan.

One of the ratios considered is the revenue trend of your business. Analyzing business revenue trends can help banks determine if a business has the income to make payments for the life of the loan. It’s considered a more valuable measure of financial health than just flat revenue numbers per year. Banks prefer to lend to growing businesses because they are less likely to default on their debts.

 


How Banks Calculate Business Revenue Trend

Banks will look at average growth in revenues by reviewing your earliest tax return to your most recent tax return.


What’s Your Business Revenue Trend Goal?

Your business revenue trend should demonstrate growth in your business revenues over time. Banks typically look for growth that matches or exceeds your industry.


Can Your Business Revenue Trend Percentage Be Improved?

The answer is a resounding “yes”. Increasing revenue will strengthen your business revenue trend. Here are some strategies to reach that goal.


How to Increase Small Business Revenue

It can be hard to concentrate on business growth when you’re managing all of the day-to-day operations it takes to keep your business running. Don’t waste time and money on strategies that won’t work. Instead, focus on these four proven ways you can increase the revenue for your small business:

  • Bring more people in the door
  • Increasing the average transaction size through upselling
  • Encourage customers to purchase from you more often
  • Raise prices

If you need assistance, consider hiring an outside marketing professional. They can help develop a solid road map to increase your customer base and overall revenue.


Key Criteria Banks Consider

Of course, your business is more than just your revenue trend. It’s just one of 7 key criteria banks use to evaluate your business when you apply for a business loan.

To learn more about the 7 criteria and help you increase your likelihood of approval when applying for low-cost funding, sign up for our new no-cost online educational tool, SmartBiz Advisor.*

This tool helps you learn how banks typically evaluate your business and recommends ways to increase your likelihood of approval when applying for the low-cost SBA and bank funding you deserve. 

Just like a CFO in a large business, SmartBiz Advisor can educate you on how to best build your lending profile. Banks that provide SBA loans look at a number of different factors like debt coverage, debt usage and personal credit scores. SmartBiz Advisor is a free and transparent tool. Learn more about SmartBiz Advisor here.

*What you need to know: The information provided through SmartBiz Advisor, including the Loan Ready Score, is for educational purposes only. SmartBiz Advisor is not a financial or legal advisor as defined under federal or state law. Use of this information is not a replacement for personal, professional advice or assistance regarding your finances or credit history.