A startup business loan can help you access capital to launch or expand your business. You can also explore alternative financing solutions if you aren’t eligible for a startup loan.
Written by Jill A. Chafin | Edited by Kurt Adams and Janet Schaaf | September 27, 2023
| Lender | User ratings | Best for | Max. loan amount | Min. credit score | Time in business |
|---|---|---|---|---|---|
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User Ratings & Reviews
Ratings and reviews are from real consumers who have used the lending partner’s services. | Short-term loans | $250,000 | 625 | 12 months |
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User Ratings & Reviews
Ratings and reviews are from real consumers who have used the lending partner’s services. | Flexible line of credit | $250,000 | 660 | 12 months |
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User Ratings & Reviews
Ratings and reviews are from real consumers who have used the lending partner’s services. | Fast funding | $150,000 | 600 | 6 months |
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User Ratings & Reviews
Ratings and reviews are from real consumers who have used the lending partner’s services. | Equipment financing | $2,000,000 | 550 | None |
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User Ratings & Reviews
Ratings and reviews are from real consumers who have used the lending partner’s services. | Bad credit | $1,500,000 | 500 | 6 months |
 | User ratings coming soon | SBA loan for startups | $50,000 | 620 | Not specified |
Learn more about how we chose our picks.
| Max. amount | $250,000 |
| Term length | Up to 24 months |
| Est. interest rate | Starting at 35.40% APR |
| Min. credit score | 625 |
| Min. time in business | 12 months |
High starting interest rate
Includes an origination fee and monthly maintenance fee
Loans not available in Nevada, North Dakota or South Dakota
You can use OnDeck’s business term loans for a range of expenses, such as expanding your brick-and-mortar business, investing in new supplies or launching a marketing campaign. However, you must be in business for at least one year with an annual revenue of $100,000, so brand-new companies will need to look elsewhere.If approved, you’ll need to make payments either daily or weekly. And be prepared: APRs start fairly high — at 35.40% — with the average OnDeck term loan APR at 62.1% (based on loans originated in the half-year ending March 31, 2022).
You can also consider OnDeck’s business line of credit if you want access to revolving funds. However, OnDeck doesn’t serve all industries, such as adult entertainment, loan brokers, firearms vendors and more.
| Max. amount | $250,000 |
| Term length | 6, 12 or 18 months |
| Est. interest rate |
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| Min. credit score | 660 |
| Min. time in business | 12 months |
All loans require a personal guarantee
Confusing fee structure based on term length
An American Express business line of credit can be a quick and easy way to access flexible funds for your new business. With funds up to $250,000, you can tackle your business’s most urgent needs, such as expansions, payroll, inventory and more. You’ll need a FICO Score of 660 or higher to qualify, plus a monthly revenue of at least $3,000.American Express’s monthly fees can be complicated to understand. As of April 2023, monthly fees for six-month terms are 2% to 9%, 12-month terms are 7.5% to 18% and 18-month terms are 15.75% to 27%. However, you only pay for the funds you withdraw, allowing your business to grow and expand as needed.
| Max. amount | $150,000 |
| Term length | 12 or 24 weeks |
| Est. interest rate | 4.66% for 12 weeks 8.99% for 24 weeks |
| Min. credit score | 600 |
| Min. time in business | 6 months |
Must have annual gross revenue of $100,000 or higher
Weekly repayments with short terms
If your business needs an immediate cash infusion, a Fundbox business line of credit could help. You can borrow up to $150,000 with interest starting as low as 4.66% for a 3-week term and 8.99% for a 12-week term. Use what you need when you need it, and only pay interest on what you withdraw.Your business needs to operate for at least six months with $100,000 or more in annual revenue to qualify. If approved, funds can hit your business checking account as quickly as the next business day.
| Max. amount | $2,000,000 |
| Term length | 12 to 84 months |
| Est. interest rate | 3.49% to 28.00% |
| Min. credit score | 550 |
| Min. time in business | None |
A personal guarantee may be required
Longer-loan terms could incur more interest over time
Taycor Financial is one of the few lenders that offer financial solutions for startups with no minimum time-in-business requirement. You can borrow up to $2,000,000 with commercial equipment financing or leasing or explore other finance options such as business lines of credit, business bridge loans and term loans.If you have low credit, Taycor Financial’s minimum credit score requirement of 550 might help secure the necessary funds your business needs. While a down payment isn’t required, you might need to provide a personal guarantee. Also, interest rates can go quite high.
You can apply for financing up to $400,000 using a simple, one-page application. More significant amounts require a more in-depth application process.
| Max. amount | $1,500,000 |
| Term length | Up to 15 months |
| Est. interest rate | Factor rates from 1.10 to 1.40 |
| Min. credit score | 500 |
| Min. time in business | 6 months |
Can’t have any open bankruptcies
The factor rate makes it hard to compare with competitive interest rates
A working capital loan from Fora Financial can provide between $5,000 and $1,500,000 for any type of business expense — with no restrictions whatsoever. It’s one of our top picks for a bad credit business loan since it considers FICO Scores as low as 500 and doesn’t require any collateral. However, you need a minimum of $12,000 monthly revenue to qualify.Fora Financial prides itself on its quick application process, claiming you can get approved and funded within 24 to 48 hours. While certain lenders charge prepayment penalties on business loans, Fora Financial awards you for paying off your debt early.
| Max. amount | $50,000 |
| Term length | 6 years |
| Est. interest rate | 8.00% to 13.00% |
| Min. credit score | 620 |
| Min. time in business | Not specified |
May require collateral plus a personal guarantee
Smaller loan amounts compared to other loan types
If your new business is looking for small loan amounts, an SBA microloan might be just the solution. You can borrow up to $50,000 to go toward working capital, equipment, inventory or other business-related expenses.SBA microloans focus on underserved business owners and offer less-strict credit requirements than other lenders for minority business loans, women-owned businesses or veteran business loans.
Remember, these are small loans; the average SBA microloan in the fiscal year 2021 was $16,557. You might want to explore other options if you envision needing more funds.
A startup business loan can help new companies without an established business credit score — or without access to other types of financing — get the capital they need to cover startup costs and grow their business.
Business loans for startups can help cover a range of expenses, such as:
You can use a startup business loan for any ordinary and necessary expense for launching and growing your business.
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Startup business loans can be a great way to launch or expand your business. However, you want to ensure you’re getting a loan with reasonable rates and terms and can cover the weekly or monthly repayments, otherwise you risk burying yourself in unmanageable debt.
Startups that have been in operation for at least six months can consider approaching banks, credit unions and alternative lenders for small business for a business line of credit, term loan or SBA microloan. However, you might need to start with a business credit card, personal loan or crowdfunding if you haven’t hit the six-month mark yet.
New businesses will need to rely on their personal finances when borrowing funds. As discussed above, you’ll need a good credit score, reliable income, and a solid debt-to-income ratio. Some small business loans may require a down payment, collateral or a personal guarantee.
The amount you can expect to receive from a startup loan will depend on multiple factors, such as your time in business, credit score, collateral and annual revenue. Most small business loans start at $5,000 and can go as high as $10 million, depending on your business’s unique profile.
Newly established businesses should expect a much lower borrowing range. For example, the average SBA Microloan in 2021 was $16,557. Even if you get approved for a more significant amount, it’s best to limit how much you borrow to ensure your business can repay the debt.
Lenders usually check an applicant’s personal credit score when deciding whether to approve a startup loan. While getting a business loan with bad credit is possible, your options may be limited and you may have to put up collateral or pay a higher interest rate.
Securing funding for a small business startup can be tough, especially if your company is brand new. This is because most lenders have minimum annual revenue requirements or may require you to be in business for at least two years.
However, some lenders offer loans targeted to startups, so don’t be discouraged if you don’t get approved on your first try. Focus on boosting your revenue and credit history to help improve your chances of approval.
Your lender may require a down payment to qualify for a startup business loan. For example, depending on loan type and program, the Small Business Administration (SBA) typically requires an SBA loan down payment of 10% to 30%, depending on loan type and your qualifications.