Best Startup Business Loans in April 2024

A startup business loan can help you access between $500 to $5 million to launch or expand your new business.

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.
Privacy Secured  |  Advertising Disclosures
By Jill A. Chafin | Edited by Abigail Bassett | March 28, 2024

Startups lenders at a glance

Fundbox: Best for fast financing

Loan amountsUp to $150,000
Starting interest rate12 or 24 weeks
Term length4.66% for 12 weeks
8.99% for 24 weeks
Minimum credit score600
Minimum time in business6 months
Minimum annual revenue$100,000

 Receive funds as soon as next business day after approval

 Low minimum credit score requirement

 Available in all U.S. states and many territories

 High annual revenue requirement

 Weekly repayments with short terms

 Doesn’t fund all industries

OnDeck: Best for short-term loans

Loan amounts$5,000 to $250,000
Starting interest rate35.40%
Term lengthUp to 24 months
Minimum credit score625
Minimum time in business12 months
Minimum annual revenue$100,000

 Offers same-day funding

 Fair to low credit accepted

 No prepayment penalty

 High starting interest rate

 Loans not available in North Dakota

 Doesn’t fund all industries

Fora Financial: Best for borrowers with bad credit

Loan amounts$5,000 to $1,500,000
Starting interest rateUp to 15 months
Term lengthFactor rates from 1.10 to 1.40
Minimum credit score500
Minimum time in business6 months
Minimum annual revenue$180,000

 Low minimum credit score requirement

 Offers prepayment discounts

 Quick funding times

 Can’t have any open bankruptcies

 High minimum annual revenue requirement

 Doesn’t report to credit bureaus

National Funding: Best for unsecured loans

Loan amounts$5,000 to $500,000
Starting interest rate1.11 factor rate
Term length4 to 18 months
Minimum credit score600
Minimum time in business6 months
Minimum annual revenue$250,000

 Doesn’t require collateral or a down payment

 Next-day funding

 Early payoff discounts

 Requires daily or weekly payments

 High annual revenue requirement

 Factor rates make it hard to compare with other offers

SBA Microloan: Best for SBA loans

Loan amountsUp to $50,000
Starting interest rate8.00%
Term lengthUp to 72 months
Minimum credit score620
Minimum time in businessNot specified
Minimum annual revenueNot specified

  Eligibility requirements tend to be less strict than other government loans

 Available in all states

 Funds can be used for a variety of startup expenses

 May require collateral and/or a personal guarantee

 Smaller loan amounts compared to other financing options

 Can’t use funds to pay existing debt or to purchase real estate

Wells Fargo: Best for traditional bank loans

Loan amounts$5,000 to $50,000
Starting interest ratePrime + 4.50%
Term length60 months (no annual review)
Minimum credit score680
Minimum time in businessLess than 24 months
Minimum annual revenueNot disclosed

 Offers a range of small-business solutions

 No collateral required

 Automatic enrollment in free rewards program

 High annual fees compared to secured lines of credit

 Low credit limit

 Personal guarantee required

Bank of America logo #1

Bank of America: Best for secured loans

Loan amountsStarting at $1,000
Starting interest rateVariable
Term length12 months (with annual review)
Minimum credit scoreNot disclosed
Minimum time in businessSix months
Minimum annual revenue$50,000

 Cash-secured line of credit can help establish business credit history

 Rate discounts for Bank of America Preferred Rewards members

 Offers multiple small business products and solutions

 Doesn’t list minimum credit score requirements

 Credit limit based on your security deposit

 Annual fee of $150 (waived the first year)

Headway Capital: Best line of credit

Loan amountsUp to $100,000
Starting interest rateNot disclosed
Term length12, 18 or 24 months
Minimum credit scoreNot disclosed
Minimum time in business6 to 12 months
Minimum annual revenue$50,000

 Flexible repayment terms

 No early payoff penalties

 Can receive funds the next business day after approval

 Not available in all states

 Might be subject to a 2% draw fee

 Doesn’t list minimum credit score requirements

altLINE: Best for invoice factoring

Funding limitsUp to $5,000,000
Advance rateUp to 90%
Invoice factoring fees0.75% to 3.50%
Minimum credit scoreNot required
Minimum time in businessNot required
Minimum annual revenueNot required

 Works with startups and bad credit borrowers

 Funds available within 24 to 48 hours

 Collects outstanding customer invoices on your behalf

 Includes origination and wire fees

 Requires your customers to have good credit

 Fees increase the longer an invoice is left unpaid

Taycor Financial: Best for equipment financing

Loan amounts$500 to $2,000,000
Starting interest rate4.99% to 28.00%
Term length12 to 84 months
Minimum credit score550
Minimum time in businessNot required
Minimum annual revenueNot required

 No minimum time-in-business requirement

 Can get approved within hours with minimal information required for application

 High funding amounts

 Personal guarantee might be required

 Equipment refinance only available to businesses older than three years

 Requires documentation fee for equipment loans

Accion Opportunity Fund: Best starter loans for minority entrepreneurs

Loan amounts$5,000 to $250,000
Starting interest rate8.49%
Term length12, 24, 36 or 60 months
Minimum credit scoreNot disclosed
Minimum time in business12 months
Minimum annual revenue$50,000

 Lends to women, people of color and low-income entrepreneurs

 Offers business coaching and mentorship

 Flexible repayment terms

 Not available in all states

 Company must be based in the U.S.

 Doesn’t list minimum credit score requirements

What is a startup business loan?

A startup business loan can help new companies get the capital they need to cover startup costs and grow their business. Startup loans often have more lenient eligibility requirements, but be prepared to pay higher fees and shorter repayment terms than traditional small business loans.

You can use startup financing for supplies, equipment, office spaces, marketing campaigns, inventory, payroll and more.

Startup business loans vs. traditional business loans

With traditional small business loans, you typically need excellent personal and business credit scores, a reliable annual revenue, a good debt-to-income (DTI) ratio, a detailed business plan and even assets to pledge 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 business to help get your entrepreneurial ideas off the ground.

Small business loan requirements

While every lender has its own requirements for getting a startup loan, you’ll likely need to meet the following criteria::

  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 mid-600s is best for qualifying, although some startup lenders accept scores as low as 500. The higher your score, the more likely you’ll score a competitive interest rate.

  Annual revenue: Lenders typically require a minimum annual revenue to qualify for financing, which can range from $36,000 to $250,000 or higher. However, startup-friendly lenders like altLine and Taycor Financial don’t have any revenue requirements. Small business accounting software can help track your business income and expenses.

  Time in business: The term “startup” can be misleading since most lenders require you to operate 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 a business plan outlining your company’s overall goals, mission and plan for future growth.

 How to get approved for a startup business loanYou can monitor your credit score for free with LendingTree’s Spring to ensure it’s in tip-top shape before applying for startup business financing. Other ways to strengthen your new business loan application include boosting your revenue, saving for a down payment, finding a lender that fits your specific criteria and creating a strong business plan.

Types of startup business loans

Here are some common types of startup business loans to consider for your business needs.

Lines of credit

A business line of credit allows you to access funds as needed up to a predetermined limit, only paying interest on the amount withdrawn.

Some lenders offer lines of credit to businesses operating for less than two years. However, many lenders require a minimum credit score between 600 and 680 to qualify for a business line of credit.

SBA loans

The U.S. Small Business Administration guarantees a portion of SBA loans, making them an affordable option for companies unable to secure traditional financing. With the popular SBA 7(a) loan program, small businesses can borrow 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.

Banks, credit unions and community development organizations issue SBA loans. And while the SBA doesn’t set a minimum credit score, 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.

Rates on short-term loans tend to be higher than long-term business 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, although some lenders have more lenient requirements.

Merchant cash advance

While a merchant cash advance (MCA) isn’t technically a loan, it can still be a good option for your startup business. A merchant cash advance company advances you a lump sum of cash in exchange for a percentage of your daily credit card and debit card sales.

Obtaining a merchant cash advance is typically easy if your business has significant daily debit and credit card sales. 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 in exchange for 70% to 90% of the invoice’s face value. The factoring company then collects outstanding balances from your customers. Once the customer pays, the factoring company pays you the remainder of the invoice minus a predetermined factor fee.

Invoice factoring allows your business to get cash immediately rather than wait for customers. However, 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) enterprise.

How to qualify for a startup business loan

Many top lenders hesitate to work with entrepreneurs and startups since they have not built a solid business history or demonstrated 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 provide 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 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.

How to apply for a startup business loan

While every lender will have its own application process, here are some steps to take once you’re ready to apply for a startup business loan.

  1. Decide what type of financing you need. There are many types of business loans to consider based on your eligibility and immediate needs. Only you can decide how much you need and what’s right for your startup business.
  2. 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.
  3. Research and compare lenders. While getting a loan offer can be exciting, you should shop around to find the right loan with the best rates and fees. Read small business lender reviews in advance to see if a potential lender fits your company’s criteria and needs.
     Which banks offer startup business loans?Some traditional banks offer startup financing (like Bank of America, mentioned above), but you may need to go with an alternative lender to secure capital for your new company. Online lenders typically have less strict requirements about time in business. However, they usually charge higher rates than traditional or credit union business loans.
  4. Gather required documents. While requirements vary by lender and loan type, you’ll likely need the following documents when applying for a small business loan for your startup company:
  5. Apply and review. You can usually apply for business loans for small businesses online with a quick and streamlined process, although some traditional banks might require an in-person visit. Read the fine print before signing your business loan agreement to ensure you understand the terms, rates and additional fees.
     How hard is it to get a startup business loan?Lenders often consider your time in business, annual revenue and credit score when providing a loan, so startups will often have a harder time securing small business financing compared to more established companies. That said, having collateral or applying for secured lines of credit can help improve your odds.You can also consider adding a cosigner. Just make sure your cosigner understands the legal responsibility of cosigning a small business loan.

How to compare startup business loans

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

Here are a few things to consider when picking the best small business startup loan for your needs:

  Interest rate: Interest rates vary by lender and loan type. Make sure to understand the difference between fixed versus variable interest rates. It’s crucial to shop around to find the lowest rate on a loan that fits your needs.

  Additional fees: Watch out for extra charges like origination fees, late charges or prepayment penalties — these can all make the loan cost higher than anticipated. Fortunately, the best startup lenders typically don’t charge these extra fees.

  Repayment term: Loan repayment terms can range from a few months to 25 years. Most loans require daily, weekly or monthly payments over the loan term. However, some lenders 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.

  Time to fund: Some alternative lenders offer same-day business loans, while others typically approve and issue funds within one to three business days. In contrast, traditional lenders can take up to two weeks or longer to approve and process your loan, with SBA loans taking around 30 to 90 days.

  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 seize the collateral if you default on the loan.

  Loan purpose: Some lenders restrict how you spend the funds. For example, you can’t use an SBA microloan to pay off existing debt or purchase commercial real estate. If you want to cover the widest range of business expenses, consider a working capital business loan or working capital line of credit.

 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 options for startup financing for small businesses, as we outline below.

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.

Alternatives to startup business loans

If you’re struggling to figure out how to get a loan to start a business and can’t qualify for startup financing, here are some alternatives that could help fund your entrepreneurial projects:

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 robust personal credit score.

Because businesses tend to spend more than individuals, business credit cards often offer perks, points and other rewards. If considering a business credit card with a yearly fee, ensure it provides enough value in rewards to offset the cost.

You can also use a personal credit card for business purposes, although you won’t be able to claim the paid interest as a business tax deduction.

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 often 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 and higher interest rates than business loans.
  • 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 since you may have to repay the money immediately if you leave your employer.
  • Home equity loan or HELOC. Home equity loans and home equity lines of credit (HELOC) are two low-cost borrowing options worth considering. However, home equity loans and HELOCs can have substantial closing costs, and 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 we chose the best startup business loans

We reviewed the leading small business lenders to determine the best business loans for startups. To make our list, lenders must meet the following criteria:

  • Minimum credit score: Personal credit score requirements of 680 or lower
  • Minimum time in business: Loan options for businesses that have been operating for 12 months or less.
  • Loan amounts: Funding amounts from $500 to $5 million to help you tackle a range of business needs.
  • Rates and terms: We prioritize lenders offering competitive rates, reduced fees and flexible repayment terms.
  • Repayment experience: We consider each lender’s reputation and business practices, favoring lenders that report to all major credit bureaus, offer reliable customer service and provide extra support to customers, such as free business coaching, business rewards and early payoff discounts.

Frequently asked questions

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.

While you can get a startup business loan with no money, you will likely end up with higher fees and less flexible terms. Boosting your credit score and saving for a down payment can help unlock more competitive rates and terms.

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. Small business loans can start at $500 and go as high as $15.5 million, depending on your business’s unique profile.

Newly established businesses should expect a much lower borrowing range with a first-time business loan. For example, the average SBA Microloan was $15,627 for fiscal year 2023. 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. 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 get a clearer picture of your situation and your company’s potential. They may even ask for collateral to help secure the loan.

But be prepared: Most unsecured or bad-credit business loans typically have higher interest rates and less flexible terms, which can cost more over the long run.

Your lender may require a down payment to qualify for a startup business loan. For example, the Small Business Administration (SBA) typically requires a 10% to 30% down payment for SBA loans, depending on loan type and your qualifications.