Best Startup Business Loans

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.

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Best startup business loans in October 2023

Written by Jill A. Chafin | Edited by Kurt Adams and Janet Schaaf | September 27, 2023

How Does LendingTree Get Paid?
LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.

How Does LendingTree Get Paid?

LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.
LenderUser ratingsBest forMax. loan amountMin. credit scoreTime in business
User Ratings & Reviews rating-reviews-tooltip-icon

Ratings and reviews are from real consumers who have used the lending partner’s services.

Short-term loans$250,00062512 months
User Ratings & Reviews rating-reviews-tooltip-icon

Ratings and reviews are from real consumers who have used the lending partner’s services.

Flexible line of credit$250,00066012 months
Fundbox logo
User Ratings & Reviews rating-reviews-tooltip-icon

Ratings and reviews are from real consumers who have used the lending partner’s services.

Fast funding$150,0006006 months
Taycor Financial lender logo
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Ratings and reviews are from real consumers who have used the lending partner’s services.

Equipment financing$2,000,000550None
User Ratings & Reviews rating-reviews-tooltip-icon

Ratings and reviews are from real consumers who have used the lending partner’s services.

Bad credit$1,500,0005006 months
User ratings coming soonSBA loan for startups$50,000620Not specified

Learn more about how we chose our picks.

OnDeck: Best startup business loans for short-term loans

Max. amount$250,000
Term lengthUp to 24 months
Est. interest rateStarting at 35.40% APR
Min. credit score625
Min. time in business12 months

American Express Business Line of Credit: Best startup business loans for flexible line of credit

Max. amount$250,000
Term length6, 12 or 18 months
Est. interest rate
  • 3% to 9% for 6-month loans
  • 6% to 18% for 12-month loans
  • 9% to 27% for 18-month loans
Min. credit score660
Min. time in business12 months

Fundbox: Best startup business loans for fast funding

Fundbox logo

Max. amount$150,000
Term length12 or 24 weeks
Est. interest rate4.66% for 12 weeks
8.99% for 24 weeks
Min. credit score600
Min. time in business6 months

Taycor Financial: Best startup business loans for equipment financing

Taycor Financial lender logo

Max. amount$2,000,000
Term length12 to 84 months
Est. interest rate3.49% to 28.00%
Min. credit score550
Min. time in businessNone

Fora Financial: Best startup business loans for bad credit

Max. amount$1,500,000
Term lengthUp to 15 months
Est. interest rateFactor rates from 1.10 to 1.40
Min. credit score500
Min. time in business6 months

SBA Microloan: Best SBA loan for startups

Max. amount$50,000
Term length6 years
Est. interest rate8.00% to 13.00%
Min. credit score620
Min. time in businessNot specified

What is a startup business loan?

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:

  • Buying furniture, computers and other equipment
  • Purchasing or leasing office space
  • Paying utilities and other overhead expenses
  • Purchasing inventory
  • Hiring employees

You can use a startup business loan for any ordinary and necessary expense for launching and growing your business.

How do startup business loans work?

With traditional small business loans, you typically need excellent personal and business credit scores, a reliable annual revenue, a good debt-to-income ratio, a detailed business plan and maybe even assets to put up as collateral. While you’ll likely need the same with a startup business loan, the requirements tend to be less stringent.

For example, the lender Fora Financial states they take a “big-picture approach” by prioritizing your business’s potential for growth over your credit score. Look for lenders offering loans to start a small business to help get your business ideas off the ground.

Minimum requirements for a small business loan

If you’re asking yourself what do I need for a startup business loan, it’s important to keep in mind that every lender has its own business loan requirements. However, here are the most common factors you may need to get a startup business loan:

  • Credit score: If your business doesn’t have an established credit score yet, lenders will likely consider your personal FICO Score. Typically, a score in the 600s is best for qualifying, although certain lenders will accept as low as 500.
  • Tax returns and financial records: To secure financing, you need to meet a lender’s annual revenue requirements — typically ranging from $36,000 to $100,000 or higher. Small business accounting software can help track your business income and expenses. If you have no income stream, try applying for small business grants to get things up and running.
  • Time in business: The term “startup” can be misleading since most lenders require you to be in operation for at least six months to qualify for financing. However, Taycor Financial doesn’t have a minimum time-in-business requirement for equipment financing, making them an excellent choice for brand-new companies.
  • Business plan: Your lender will likely want to see your company’s overall goals, mission and plan for future growth.

How do I qualify for a startup loan?

Many top lenders are hesitant to work with startups since they haven’t had time to build a proper business history or demonstrate their ability to repay debt. If your business is less than a year or two old, you’ll likely need to rely on your personal credit score and financial status to get funded.

Here are some steps to take before applying for startup financing:

1. Improve your personal credit score.

Improving your credit score is a great way to open the door to the most competitive loan offers. Start by checking your credit to see where you stand.

2. Focus on your debt-to-income (DTI) ratio.

Lenders look at your DTI to see how you handle debt. The lower the ratio, the better your chances of approval. Stay on top of your monthly bills and create a business budget to improve your DTI.

3. Offer substantial collateral.

Collateral is anything of value you put up for a secured business loan. Even if it’s not required, offering collateral shows lenders that you’re a reliable, creditworthy business owner who can successfully manage your finances. Secured business loans tend to tend to offer the most competitive rates and terms.

4. Show a strong cash flow.

If your business is already in operation, try to boost sales before applying for financing to reassure lenders that your company is a dependable investment.

Most importantly, be cautious of business and personal no-credit-check loans. Although these might sound like an easy way to access capital for your business, they often come with high interest rates and inflexible terms, or they could be a scam.

Tips for comparing startup business loans

There’s no one-size-fits-all approach to finding the perfect funding solution for your business, especially since small business startup costs vary greatly by industry.

Here are a few things to consider when researching the right loan option for you:

  • Length of repayment time. Loan repayment terms can range from a few months to 25 years for loans backed by the U.S. Small Business Administration (SBA).
  • Interest rate. Business loan interest rates vary by lender and loan type. It’s crucial to shop around to find the lowest rate on a loan that fits your needs.
  • Repayment schedule. Most loans require you to make weekly or monthly principal and interest payments over the loan term. However, some loans may allow you to make interest-only payments during the startup phase and then principal plus interest payments later. Others might call for interest-only payments for the life of the loan with a balloon payment at the end of the loan term.
  • Collateral required. Collateral is anything of value you put up as security for a loan — such as real estate, inventory, equipment, accounts receivable or other assets. The lender can take your collateral if you fail to repay the agreed-upon loan. Some lenders require collateral on small business loans.

Types of startup business loans

Here are some common types of startup business loans.

Line of credit

A business line of credit allows you to withdraw money as needed up to a predetermined limit instead of borrowing a lump sum. Like a credit card, a line of credit is revolving, meaning you can borrow, repay, then borrow again. And you only pay interest on the withdrawn amount.

Some lenders may offer lines of credit to businesses that have only been operating for two to six months. However, they typically check the business owner’s personal credit score, with many lenders requiring a minimum credit score between 600 and 640.

SBA 7(a) loans

The SBA 7(a) loan program offers small business loans up to $5 million with repayment terms of up to 25 years. You can use the funds to purchase equipment or real estate, provide working capital and more.

SBA 7(a) loans aren’t offered directly by the SBA, but by SBA-approved lenders, including banks, credit unions and community development organizations. And while the SBA doesn’t set a minimum credit score, the lenders offering SBA loans may set their own minimums. You have a better chance of approval if you have a personal FICO Score of 680 or higher.


Microloans are business loans for relatively small amounts — usually less than $50,000. They may be backed by the SBA or offered by nonprofit organizations specializing in helping small businesses get funding.

These lenders tend to take a more holistic approach to underwriting loan applications, taking into account your business plan, geographic area, industry and management team’s past success and credit.

Short-term loans

Short-term business loans have shorter repayment terms — usually three to 24 months. These loans can help fill a short-term purpose, such as covering a temporary cash shortage or seasonal income gap. Depending on the lender, you can borrow anywhere from $5,000 to $1 million or more.

Be sure to pay attention to the interest rate. Rates on short-term loans tend to be higher than longer-term loans, often ranging from 7% to 50% or higher, depending on the loan.

Equipment financing

Equipment financing helps business owners purchase machinery or equipment for running their businesses. These loans use the equipment as collateral, making them more readily available than unsecured business loans.

Many online lenders require a minimum credit score in the 600s for an equipment loan. You may also need to be in business for at least six months and meet minimum annual revenue requirements.

Merchant cash advance

A merchant cash advance (MCA) isn’t technically a loan. Instead, a merchant cash advance company typically partners with your credit card processor. Then, the MCA company gives you a lump sum of cash and collects repayment by taking a percentage of your daily credit card and debit card sales.

You can usually obtain a merchant cash advance easily if your business’s daily debit and credit card sales volume is substantial. However, this type of funding can be expensive — with some advances charging APRs in the triple digits.

Invoice factoring

Invoice factoring involves selling a percentage of an invoice’s face value to a factoring company. The factoring company gives you 70% to 90% of the invoice’s face value, then collects the outstanding balance from your customers. Once the customer pays, the factoring company pays you the remainder of the invoice minus a predetermined fee.

Invoice factoring allows your business to get cash immediately rather than wait for customers. However, it’s not available to all businesses: Most factoring companies will only buy invoices issued to other businesses, so you might not qualify for invoice factoring if you run a business-to-customer (B2C) business.

Business credit cards

A business credit card is similar to a personal credit card, except for business use. Just about any business can apply for a business credit card. Issuers will check your personal credit score, so you may have to start with a low credit limit if you don’t have a strong personal credit score.

Because businesses tend to spend more than individuals, business credit cards often offer perks, points and other rewards. However, some business credit cards will also charge an annual fee. If you’re considering a business credit card with a yearly fee, make sure it offers enough value in rewards to offset the cost.

Personal loans and financing

Using personal money to start your business can help you get the funds you need when business loans aren’t available. Here are a few options to consider:

  • Personal savings. Bootstrapping your startup can set your business up for later success since lenders prefer working with business owners with some skin in the game. However, you might not have enough personal savings to fully fund your needs or grow your business as quickly as you’d like.
  • Personal loan. Personal loans can be easier to get than business loans because most personal loan lenders look only at your personal credit score. However, personal loans tend to provide lower amounts than business loans, and the interest rates tend to be higher.
  • 401(k) loan. If your 401(k) plan allows loans, you’re almost guaranteed to get approved — and you won’t even need a credit check since you’re essentially borrowing money from yourself. However, 401(k) loans are risky: If you leave your employer, you may have to repay the money immediately.
  • Home equity loan or HELOC. Home equity loans and home equity lines of credit (HELOC) are often some of the lowest-cost borrowing options in terms of interest rates because your home secures them. However, home equity loans and HELOCs can have substantial closing costs. You also risk losing your home if you can’t afford to repay the loan or line of credit.

Friends and family

If you have friends or family members willing to give you a loan, this can be one of the easiest ways to get money to start your business. However, you’re limited by their available cash. Plus, you risk damaging the relationship if you can’t repay the loan.


Crowdfunding is another way to raise money from friends, family and the general public. Kickstarter and GoFundMe are well-known business crowdfunding platforms business owners use to raise startup capital.

Crowdfunding is a low-risk venture because people donate to your business — not invest or lend. However, donors typically expect some benefit in return for their contribution. For example, they may want your product or service, formal recognition or another kind of reward if your business succeeds.

Business startup grants

Federal, state or local governments, corporations or foundations usually offer various small business grants. The biggest perk of a grant is that you don’t need to repay it. However, there can be a lot of competition for small business startup grants — you could spend a lot of time applying for grants and receive little or no funding in return.

How do I get a startup business loan?

Every lender will have its own application process. However, here are some steps you can take once you’re ready to apply for a starter loan.

  1. Write a business plan. Many business startup loan lenders will ask for a business plan as part of the approval process.
  2. Decide what type of financing you want to apply for. There are many types of business loans and other funding options. Only you can decide what’s right for your startup business.
  3. Check your personal and business credit scores. Poor credit is one of the main reasons business loan applications get rejected. If you don’t have business credit yet, lenders will look at your personal credit score — so be sure to check your credit and take steps to improve your score before applying.
  4. Compare lenders. Getting a loan offer can be exciting, but you should still shop around to find the right loan with the best rates and fees.
  5. Gather required documents. Requirements vary by lender, but most want to see your time in business, personal tax returns, copies of business licenses and registrations, financial statements and business and personal bank statements.
  6. Submit. You may be able to apply online for a business startup loan and submit all required documentation via an online portal or email.

How to get a startup business loan with no credit or revenue

Without a strong credit history, figuring out how to get a loan to start a business can be tough. Most lenders look at your credit score to determine your creditworthiness. However, some lenders will look at factors beyond credit history. For example, a lender may scour your bank statements, business plan and cash flow projections to better understand your situation and your company’s potential. They may even ask for collateral to help secure the loan.

If you have no credit or revenue yet, you can always consider a no collateral startup business loan, also called an unsecured business loan.

But be prepared: Most unsecured or bad-credit business loans typically have higher interest rates. You can likely handle a high rate if borrowing a small amount for a short term. However, it’s best to avoid high-interest loans since the debt could become unmanageable.

What to do if you are denied a startup business loan

If your startup business loan application was denied, contact the lender to review the reasons for their decision. Next, take any necessary steps to address the issues, such as improving your credit score, paying down debt, boosting your business’s revenue or strengthening your business plan.

Alternatively, you can explore other finance solutions, as outlined above. For example, your credit history might need to be stronger for a low-interest small business loan, but you may be eligible for a business credit card (you can also use a personal credit card for business purposes). Use the card responsibly to build your credit and get your business what it needs, reapplying for a small business loan once your business’s credit profile is stronger.

Lastly, be sure to re-evaluate your business’s most urgent needs. Do you need to upgrade your restaurant’s kitchen this year or can it wait? If possible, focus on the essentials while improving your business’s financial health.

How we chose our picks

We evaluated lenders based on loan products offered, interest rates, terms, required time in business and minimum credit score. More specifically, we focused on startup business loans offering a streamlined application process that can meet the diverse needs of small business owners.

To appear on our list of best startup business loans, lenders met the following criteria:

  • Minimum required credit score of 640 or lower
  • Required time in business of 12 months of less
  • Maximum loan amounts of $50,000 or higher

Frequently asked questions

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.