Featured Partner Offers
1
Biz2Credit
Up to $1 million
Revenue-based financing. Varies depending on product and qualifications
650*
*See website for details
12 months+*
*See website for details
2
OnDeck
$5,000 to $250,000
Varies by loan
625
3
AdvancePoint Capital
Up to $2 million
650+
12 months+
Compare the Best Startup Business Loans of 2025
Best Startup Business Loans of 2025: A Closer Look
BEST STARTUP BUSINESS LOAN FOR QUICK FUNDING
QuickBridge
Loan amounts
$10,000 to $500,000
APR range
Factor rates start at 1.11
Minimum Credit Score
600
$10,000 to $500,000
Factor rates start at 1.11
600
QuickBridge is an alternative loan platform that provides small business loans and working capital loans up to $500,000 across all 50 states.
Why We Like It
QuickBridge can fund startup business loans within 24 hours, and requires as little as six months in business. It offers flexible loan terms and early payoff discounts.
Why We Don’t Like It
QuickBridge requires a minimum annual revenue of $250,000 for small business loans, which may make it out of reach for some startups.
Who’s It Best For
QuickBridge is best for startups that need funding quickly.
- Discounts for paying loans off early
- 24-hour funding may be available
- Requires annual sales of $250,000
- Charges an origination fee of 1% to 3%
Eligibility
- Minimum credit score: 600
- Time in business: six months
- Minimum revenue: $250,000 per year
Turnaround time
You can apply and receive a decision from QuickBridge on the same day.
BEST STARTUP BUSINESS LOAN FOR SHORT TERMS
OnDeck
Loan amounts
$5,000 to $250,000
APR range
Varies by loan
Minimum Credit Score
625
$5,000 to $250,000
Varies by loan
625
OnDeck has been in operation since 2006 and has funded more than $15 billion in small business loans.
Why We Like It
OnDeck offers business loans from $5,000 to $250,000 with repayment terms 12-, 18 or 24 months. You can also access $6,000 up to $100,000 through its line of credit with a 12-, 18 or 24-month repayment term.
Why We Don’t Like It
Startups need at least one year in business, $100,000 in annual revenue and a 625 credit score to qualify for a short-term loan, and there are some industries OnDeck can’t serve.
Who’s It Best For
OnDeck business loans are best for startups needing a short-term loan to cover immediate expenses.
- Term loans from $5,000 to $250,000
- Lines of credit from $6,000 to $100,000
- Same-day funding
- Low minimum credit score requirement
- $100,000 minimum annual revenue requirement
- Must have been operating for at least one year
- Does not lend to businesses in North Dakota
Eligibility
- Minimum credit score: 625
- Time in business: One year
- Minimum revenue: $100,000 per year
Turnaround time
You can apply and receive a decision from OnDeck on the same day.
Consumer Sentiment Index
- Overall rating: 3.1/5 — Satisfied
Based on 6,300 customer insights and reviews for the entire category.
Some customers praised the lender for its quick and straightforward lending process, while others complained of high interest rates and feeling misled about rates and fees.
Disclaimer: The Consumer Sentiment Index from Forbes Advisor uses a proprietary weighting system designed by our subject matter experts. It evaluates thousands of consumer insights and reviews from leading online forums to determine customer satisfaction at scale.
BEST STARTUP BUSINESS LOAN FOR LARGE LOANS
Fora Financial
Loan amounts
up to $1.5 million
APR range
Not disclosed
Minimum Credit Score
570
up to $1.5 million
Not disclosed
570
Fora Financial is an online lender that provides short-term loans and revenue advances to small businesses. It offers loans up to up to $1.5 million.
Why We Like It
Fora Financial requires a personal credit score of 570 and only six months in business. The lender also provides early repayment discounts and can fund loans as quickly as 24 hours.
Why We Don’t Like It
Fora Financial’s longest repayment term is 18 months and loans have a one-time processing fee starting at 2.5% of the loan amount. Also, businesses need at least $20,000 in monthly revenue to qualify.
Who’s It Best For
Fora Financial is best for startups needing large loans or revenue advances of up to $1.5 million.
- Wide selection of loan types
- Low credit score and time-in-business requirements
- Funds available in as little as 24 hours after offer acceptance
- Repayment terms only go up to 18 months
- Doesn’t publish interest rates online
- Website is somewhat confusing
Lending Details
Eligibility
- Minimum credit score: 570
- Minimum annual revenue: $240,000
- Required time in business: six months
Funding Speed
Funding may be available within 24 hours.
BEST STARTUP BUSINESS LOAN FOR FLEXIBLE QUALIFICATION REQUIREMENTS
Fundbox
Loan amounts
$1,000 to $150,000
APR range
Interest rates start at 4.66%
Minimum Credit Score
600
$1,000 to $150,000
Interest rates start at 4.66%
600
Fundbox is an AI-powered business lending platform that offers decisions within three minutes and next-business-day funding.
Why We Like It
Fundbox requires a personal credit score of 600, three months in business and at least $30,000 in annual revenue, making it one of the easier lenders to qualify with.
Why We Don’t Like It
Fundbox only offers short-term financing with weekly repayments.
Who’s It Best For
Fundbox is best for small businesses that can meet the eligibility requirements for a line of credit and are comfortable with weekly payments.
- Flexible eligibility criteria
- Small and large loan amounts
- Short repayment terms of 12 or 24 weeks
Loan Details
- Minimum credit score: 600
- Minimum annual revenue: $30,000
- Minimum time in business: three months
Funding Speed
Funds may arrive within two business days of requesting a credit line draw.
BEST STARTUP BUSINESS LOAN FOR ROBUST OPTIONS
National Funding
Loan amounts
$5,000 to $500,000
APR range
Buy rates start at 1.11
Minimum Credit Score
600
$5,000 to $500,000
Buy rates start at 1.11
600
National Funding is an alternative lender offering short-term working capital loans from $5,000 to $500,000 and equipment financing up to $150,000.
Why We Like It
Business owners can apply for short-term and long-term business loans, as well as equipment financing. National Funding requires just six months in business and can fund loans within 24 hours of approval.
Why We Don’t Like It
National Funding requires a minimum of $250,000 in annual revenue and daily or weekly payments for working capital loans.
Who’s It Best For
National Funding is best for startups interested in various financing options, including working capital loans and equipment financing.
- Financing up to $500,000
- Early payoff discounts
- Most loans are funded within 24 hours of approval
- Requires daily or weekly payments
- Potentially high borrowing costs
- Requires minimum gross annual sales of $250,000
Eligibility
- Minimum credit score: 600 (575 for equipment financing)
- Time in business: Six months
- Minimum sales: $250,000 per year
Turnaround time
Most loans are funded within 24 hours of approval, subject to receipt of required documentation, underwriting guidelines and processing time by your bank.
BEST STARTUP BUSINESS LOAN FOR EQUIPMENT FINANCING
Balboa Capital
Loan amounts
$5,000 to $250,000
APR range
Not disclosed
Minimum Credit Score
620
$5,000 to $250,000
Not disclosed
620
Balboa Capital is a division of Ameris Bank that offers equipment financing up to $500,000 and small business loans from $5,000 to $250,000 .
Why We Like It
Balboa Capital can approve equipment financing loans within one hour and fund them the same day. Balboa Capital requires a credit score of 620 or higher and an annual revenue of at least $100,000.
Why We Don’t Like It
Balboa Capital requires one year in business to qualify for equipment financing.
Who’s It Best For
Balboa Capital is best for startups that need equipment financing for up to $500,000.
- Loans from $5,000 to $250,000
- Online application with quick funding
- May qualify with just a year in business
- $300,000 annual revenue requirement
- Not suited for new businesses
Eligibility
- Minimum credit score: 620
- Time in business: At least one year
- Minimum annual revenue: $300,000
Turnaround time
In some cases, you may be able to apply and get funding within the same day.
BEST STARTUP BUSINESS LOAN FOR MERCHANT CASH ADVANCES
Biz2Credit
Loan amounts
Up to $1 million
Varies depending on qualifications
APR range
Varies by qualifications
Minimum Credit Score
650*
*See website for details
*See Website For Details
Up to $1 million
Varies depending on qualifications
Varies by qualifications
650*
*See website for details
Biz2Credit is a digital funding platform that provides businesses with revenue-based financing, term loans and commercial real estate loans.
Why We Like It
Biz2Credit’s revenue-based financing—which functions similarly to merchant cash advances—requires just six months* in business and a minimum credit score of 575.
Why We Don’t Like It
Biz2Credit requires a minimum annual revenue of $250,000 and it isn’t clear about the fees you may be charged at closing.
Who’s It Best For
Biz2Credit is best for startups that need revenue-based financing and can meet the eligibility requirements.
- Revenue-based financing has flexible qualification requirements
- Can prequalify for submitting an application
- Offers term loans with weekly or biweekly payments
- Does not disclose financing costs
- Does not disclose turnaround time
- High annual revenue requirement
Eligibility
Eligibility varies based on the financing option you choose.
Term loan
- Minimum credit score: 650
- Time in business: 18 months
- Minimum revenue: $250,000 per year
Revenue-based financing
- Minimum credit score: 575
- Time in business: 6 months
- Minimum revenue: $10,000 per year
Turnaround time
Biz2Credit does not disclose the turnaround time for its financing options.
BEST FOR STARTUP BUSINESS LINES OF CREDIT
American Express® Business Line of Credit
Loan amounts
$2,000 to $250,000
APR range
N/A
Minimum Credit Score
660 FICO at the time of application
$2,000 to $250,000
N/A
660 FICO at the time of application
American Express® offers many financial products for small businesses, including checking accounts, credit cards and business lines of credit.
Why We Like It
With American Express, you can get a credit line from $2,000 to $250,000. The line has flexible term and funding options with an American Express® Business Checking account. You need at least $3,000 in average monthly income to qualify, which is lower than many lender requirements.
Why We Don’t Like It
Although you need at least $3,000 in average monthly revenue, American Express requires a minimum time in business of at least one year**. On top of that, credit limits over $150,000 are available only to select customers.
Who’s It Best For
American Express® Business Line of Credit is best for startups that have an American Express® Business Checking account.
- No prepayment penalty
- Four different repayment options
- Offers small to large lines of credit
- Monthly fees on unpaid balances
- Requires personal guarantee
- Lines of credit over $150,000 are only available to borrowers who meet additional criteria
Eligibility
- Minimum credit score: 660 FICO at the time of application*
- Time in business: At least one year**
- Average revenue: at least $3,000 monthly
All businesses are unique and are subject to approval and review**. The required FICO score may be higher based on your relationship with American Express, credit history and other factors.*
Turnaround time
Once application is approved, funds can take up to three business days to appear in your account, depending on your bank.
Consumer Sentiment Index
- Overall rating: 2.6/5 – Neutral
Based on 6,300 customer insights and reviews for the entire category.
American Express Business Line of Credit received mixed reviews from borrowers. Some appreciated the reasonable rates and the ease of getting funding, but there were issues with customer service and applications being denied for unclear reasons.
Disclaimer: The Consumer Sentiment Index from Forbes Advisor uses a proprietary weighting system designed by our subject matter experts. It evaluates thousands of consumer insights and reviews from leading online forums to determine customer satisfaction at scale.
BEST FOR FLEXIBLE STARTUP BUSINESS LINE OF CREDIT TERMS
Bluevine
Loan amounts
$5,000 to $250,000
APR range
Simple interest starts at 7.8%
Minimum Credit Score
625
$5,000 to $250,000
Simple interest starts at 7.8%
625
Bluevine is a fintech company offering business lines of credit from $5,000 to $250,000 with six- or 12-month repayment terms.
Why We Like It
With Bluevine, you can get a credit decision in as little as five minutes with instant funding if you have a Bluevine Business Checking account.
Why We Don’t Like It
The Bluevine line of credit isn’t available to startups in Nevada, North Dakota and South Dakota. Businesses less than two years old must sign up for the weekly repayment plan, which requires at least $40,000 monthly or $480,000 annually and a minimum 625 credit score.
Who’s It Best For
Bluevine’s line of credit is best for startups that need a flexible line of credit they can use and repay over a six- or 12-month period.
- Receive a decision within five minutes and instant funding with a Bluevine business checking account, or receive funds within 24 hours
- Lines of credit up to $250,000
- Low credit score requirement
- No mobile app for its line of credit
- Monthly revenue requirement
- Not available to businesses in Nevada, North Dakota, South Dakota, Puerto Rico and other U.S. territories
Eligibility
Eligibility varies on the specific program a business owner chooses.
Weekly plan
- Minimum credit score: 625
- Time in business: Less than one year
- Minimum revenue: $40,000 monthly or $480,000 annually
- Business type: Corporation or LLC
- Bankruptcies: No past bankruptcies
Monthly plan
- Minimum credit score: 700
- Time in business: Three years
- Minimum revenue: $80,000 per month or $960,000 annually
- Business type: Corporation or LLC
Turnaround time
After you submit your application, you can receive a decision in as quickly as five minutes and instant funding with a Bluevine business checking account. Borrowers who don’t have a Bluevine business checking account can receive funds within 24 hours.
Consumer Sentiment Index
- Overall rating: 2.4/5 — Neutral
Based on 6,300 customer insights and reviews for the entire category.
Bluevine’s borrowers reported quick application processes and funding times, but many were also disappointed with their experiences. Some customers noted that the customer service was unresponsive and that there were technical issues during the application process.
Disclaimer: The Consumer Sentiment Index from Forbes Advisor uses a proprietary weighting system designed by our subject matter experts. It evaluates thousands of consumer insights and reviews from leading online forums to determine customer satisfaction at scale.
BEST FOR STARTUP BUSINESS LINES OF CREDIT FROM A BANK
Wells Fargo Business Line of Credit
Loan amounts
$10,000 to $3 million
APR range
Prime + 1.75% to prime + 9.75%
Minimum Credit Score
680
$10,000 to $3 million
Prime + 1.75% to prime + 9.75%
680
Wells Fargo is one of the largest banks in the U.S. It offers two unsecured business lines of credit: BusinessLine for established businesses and Small Business Advantage for newer startups. The bank also has a secured line of credit for businesses with at least $2 to $10 million in revenue.
Why We Like It
Wells Fargo provides lines of credit from $5,000 to $50,000 for startups less than two years old, with no annual fee. Established businesses can access $10,000 to $3 million with lower rates.
Why We Don’t Like It
Wells Fargo typically requires a minimum FICO credit score of 680 and personal guarantees from owners with at least 20% stake in the business, depending on the financing type.
Who’s It Best For
Wells Fargo is best for startups wanting a line of credit from a traditional bank.
- Competitive APRs
- Only requires six months in business
- Flexible borrowing limits
- Must be an established Wells Fargo customer to qualify
- Annual fee of $95 or $175
- Higher minimum credit limit than competitors
Eligibility
- Minimum credit score: 680
- Time in business: Two years
- Minimum revenue: Does not disclose
- Minimum sales: $2-10 million for its Prime Line of Credit
Turnaround time
Wells Fargo does not disclose its approval and funding turnaround time.
Consumer Sentiment Index
- Overall rating: 2.1/5 — Neutral
Based on 6,300 customer insights and reviews for the entire category.
Some borrowers said they appreciated that a line of credit is included in Wells Fargo’s offerings, while others were disappointed with the approval process and the terms and conditions, such as the personal guarantee.
Disclaimer: The Consumer Sentiment Index from Forbes Advisor uses a proprietary weighting system designed by our subject matter experts. It evaluates thousands of consumer insights and reviews from leading online forums to determine customer satisfaction at scale.
Most Popular is calculated from the number of times each affiliate product was selected by Forbes Advisor users over a six month time period.
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Tips for Comparing Startup Business Loans
Weigh these tips when comparing startup business loans:
- Consider time in business and annual revenue requirements. Because startup businesses don’t have long business histories, it’s crucial to find lenders that deem your business eligible. Lenders set minimum time in business and annual revenue requirements. When comparing startup lenders, be sure to find lenders that have a minimum time in business and annual revenue requirements that your startup meets.
- Determine how you want to receive your funds. It’s likely you’ll receive business financing through one of two ways: as a lump-sum payment or on an as-needed basis. If you want to receive your startup funding up front, choose a traditional term loan. However, if you want to use funds only as you need them, a business line of credit might be a better option.
- Consider the repayment terms and flexibility. Each business financing lender has its own repayment structures. While some types of financing require monthly payments, others may require daily or weekly payments. Compare different lenders’ repayment terms when choosing your preferred lender and business loan.
- Look out for additional fees. Some lenders charge no origination fees, late payment fees, prepayment penalties or any other common loan costs. However, it might not always be the case. Be sure to confirm a lender’s fee structure when shopping for the best terms. Factor in additional fees into your decision-making process.
- Evaluate the lender’s customer support options. If you’ve found a lender that’s prepared to offer the money you need at acceptable terms, consider the lender’s support options before signing the loan agreement. Customer support can make a huge difference down the line if you encounter issues with repayment. Research the lender’s customer service resources and read reviews to make sure it’s a good fit.
If you’ve recently formed your business, a startup business loan can give you the funding you need to expand and thrive. That said, repaying a business loan can be a substantial obligation. Although the cash can be enticing, make sure repayment won’t stifle your growth.
What Is a Startup Business Loan?
A startup business loan is a type of financing that’s accessible to businesses with limited—or no—business or credit history. While the most common startup loans are term loans or U.S. Small Business Administration (SBA) loans, startups may also opt for business credit cards or asset-based financing. If you struggle to qualify for a business loan, consider less traditional financing tools like crowdfunding to start and grow your business.
How Does a Startup Business Loan Work?
Startup business loans refer to various forms of financing available to businesses without an established track record or credit history. For that reason, loans for new businesses have less stringent qualifications than traditional business loans, making them more accessible to new businesses. Qualification requirements, available loan amounts and borrowing terms vary by lender and loan type, so compare the best startup business loans before signing an agreement.
How Much Can I Get With a Startup Business Loan?
The best small business loans for startups range from $5,000 to $5 million, but the exact amount you get depends on your lender, the type of loan and your qualifications as an applicant. When determining how much to extend, startup lenders will consider your credit score, time in business, revenue, available collateral and the overall risk you or your business poses as a borrower.
Startup Business Loan Interest Rates and Fees
Startup business loan interest rates are usually higher than for traditional business loans because they’re meant for new ventures without established credit or revenue. Bank loans to start a business usually come with rates between about 5% and 12%, with the lowest reserved for more established businesses. SBA loan annual percentage rates (APRs) max out at 15.25%, while online business loan APRs can extend to 75% or more. Other types of startup business loans, like business lines of credit, equipment financing and invoice factoring, may have higher monthly borrowing costs.
Pros and Cons of Startup Business Loans
The best business loans for startups can give your venture the funding it needs to become successful, but that doesn’t come without a cost. Understanding the pros and cons of startup business loans can help you determine whether they’re the right financing tool for your business.
Pros
- Funding for your startup. A startup business loan can give your business the money it needs to get off the ground. This can include buying equipment, hiring employees or covering other business-related expenses.
- Ability to grow your business. The influx of cash from a business loan can help your startup grow, allowing you to funnel money toward expenses that need to be covered.
- Opportunity to build business credit. Receiving and regularly paying off a business loan can help build your business credit. This can help you qualify for loans in the future and lend more credibility to your venture.
Cons
- High costs. Many startup business loans can come with high interest rates and fees, as lenders often view new business borrowers as risky. This can reduce the total loan proceeds you receive, eat away at your bottom line and make loan repayment difficult.
- Possible collateral requirements. If your business is just starting out, you may only be able to qualify for a loan backed by collateral or by a personal guarantee. If you default on a loan backed by collateral, the lender can seize the asset to recoup its losses. With a personal guarantee, the lender can pursue you personally to repay the loan.
- Difficult qualification requirements. Having a limited time in business and revenue stream can make qualifying for a loan difficult. Consider a lender’s minimum requirements when shopping for offers to choose one that aligns with your qualifications.
10 Types of Startup Business Loans
Getting a small business loan can be challenging if your company doesn’t have an established history of success. However, there are several types of startup loans that are suited to a range of needs and qualifications.
1. Online Term Loans
2. SBA Microloans
3. Asset-based Financing
4. Personal Loans for Business
5. Business Credit Cards
6. Friends & Family
7. Crowdfunding
8. Small Business Grants
9. Business Lines of Credit
10. Invoice factoring
If you’re starting up a business and believe you need a loan to get it up and running, it’s critical to thoroughly estimate how much money you think you need. This estimate would include your initial startup expenses, equipment purchases and between three and six months (depending on industry) of operating expense to support you as you ramp up operations. If your total estimate is about $50,000 or less, a microloan, personal loan or credit card may be sufficient. If it’s more than $50,000, financing such as SBA loans or equipment financing may be more appropriate.
Tom Thunstrom, Forbes Advisor Advisory Board Member
What Do I Need for a Startup Business Loan?
Lenders will typically look at your personal and business credit scores when evaluating your startup loan application. Because startups generally have limited financial records and credit history, qualifying for a business startup loan can be difficult. In this case, the lender will rely primarily—or exclusively—on your personal creditworthiness.
To qualify for a startup business loan, compile these documents before submitting an application:
- Personal credit scores and reports. When finalizing your startup business loan application, a lender will conduct a hard credit inquiry to confirm your creditworthiness. This can temporarily drop your score by up to five points, but the impact should only last 12 months and the inquiry will disappear from your report within two years. Request copies of your credit reports and check your credit score before applying for a loan to better understand your approval odds and the potential interest rate you’ll qualify for.
- Tax returns. Where possible, be prepared to provide business tax returns from the previous two years. Also compile copies of your personal tax returns and IRS documents for the same period of time. Personal returns will be especially important if your startup is brand new and lacks past returns, and may be necessary for all of the business owners and registered agents.
- Additional financial records. In addition to tax returns, the lender may require a startup’s bank statements, accounts receivable, credit card sales and unpaid invoices as part of the application process. Lenders often need records going back at least four months, which may be feasible even for a startup. If you need a fast business loan, having these documents ready can streamline the application process.
- Business plan. In the absence of lengthy financial records, an up-to-date business plan demonstrates to lenders that your business is capable of repaying its debts. This document should also include a business forecast that describes likely future revenue and expenses.
- Business licenses, registrations and legal documents. If applicable, you may need to provide copies of licenses and registration necessary to operate in your state or local jurisdiction. Lenders may also require copies of incorporation documents, business leases, franchise agreements and other contracts.
- Banking information. If you’re approved for a startup business loan, the lender needs banking information so it can deposit the funds. The lender will typically request this information during the application process.
How To Qualify for a Startup Business Loan
Each lender has its own eligibility requirements, including minimum time in business and revenue. That said, lenders typically consider the same features when evaluating a business loan application. Qualifications for a startup business loan usually include:
- Credit score. If you have a startup, lenders may consider your personal credit history when evaluating a loan application. A credit score of 670 or higher can increase your odds of approval, and in many cases, higher credit scores translate to lower interest rates.
- Personal guarantee. Some lenders may require you to sign a personal guarantee stating that if the business fails, you’ll repay the loan with your personal assets. This makes a loan less risky for the lender, but it can have severe consequences for you if your business can’t make loan payments.
- Time in business. Many lenders require at least two years of business history, but some require just six months to qualify for a loan. Demonstrating a strong business plan and consistent revenue may help you overcome this requirement.
- Collateral. If your business is approved for a secured loan, the business must pledge collateral to back the loan. If your business fails to repay the loan, the lender can recoup its losses by taking possession of the collateral. Secured loans can be easier to qualify for than unsecured loans, but pose more risk to you as the borrower.
- Documentation. Lenders often require a business plan, expense sheet and financial projections for the next five years to qualify for a startup business loan. Having these documents available can streamline the application process.
- Banking relationship. Some lenders may be more inclined to approve your application for a startup loan if you have an existing relationship with the financial institution. When shopping for loan terms, start by contacting a loan officer at your current bank.
How To Get a Startup Business Loan
The process of getting a startup business loan varies by financial institution and financing type, but most banks and online lenders impose similar requirements. Even so, you may face some additional challenges as a startup with limited financial records and credit history. Follow these steps to get a business loan as a startup:
- Evaluate what kind of loan you need. Available loan amounts and repayment terms vary by loan type and lender, so first consider how much you need to borrow and what type of financing you prefer. If you’re a brand new startup, consider whether alternative types of startup financing may be appropriate, or if you’re likely to qualify for a business loan based on your personal credit.
- Check your personal and business credit scores. Before you apply for a startup business loan, check all your credit scores. This can help you gauge your approval odds for traditional financing. If necessary, take steps to improve your credit score before applying for a startup loan. Likewise, if your startup has been in business for at least a year, it may have a credit score through Experian, Equifax or Dun & Bradstreet (D&B). However, it usually takes up to three years for a business to establish credit.
- Prepare your startup for due diligence. The loan underwriting process typically involves extensive due diligence to evaluate the business’s creditworthiness. This generally includes reviewing the applicant’s business plan, personal and business bank statements and other financial documents. You may also need to provide copies of applicable business licenses and legal documents, a description of how you’ll use the funds and details about available collateral. As a startup founder, it’s essential to have a robust business plan that demonstrates the business’s likelihood of success.
- Compare lenders to find the best startup business loans. In general, the most competitive interest rates and terms are reserved for the most creditworthy borrowers. Depending on your personal credit score and how long your startup has been operational, qualifying for the lowest rates may be difficult. Shopping around and comparing multiple lenders can help you lock in the best rates available for your business.
- Submit an application. After identifying your preferred lender, review the application process and compile the necessary documentation. Business loan application and underwriting processes vary by lender, but most lenders let you complete applications online, via telephone or in person at a branch. Once you submit an application, a lender representative may request additional information or documentation, such as business projections or proof of collateral.
- Consider alternatives. If you’re not approved for traditional financing like a loan or credit card, evaluate whether there are any feasible alternatives. If you have a friend or family member who has expressed interest in supporting the new business, consider borrowing from them. Alternatively, using a platform like Kickstarter may be the most convenient way to attract new customers and investors.
How To Get Startup Business Loans With Bad Credit
While some lenders don’t work with applicants with bad credit, there’s a selection of lenders that cater to such borrowers. If you have a personal FICO score below 580, consider a business loan for bad credit.
Lenders may require more documentation than if you had a strong credit score, and most will want to see a business plan and cash flow projections to ensure you can afford the new loan payments. Note that applicants with low credit scores typically receive higher interest rates, which increases overall borrowing costs.
If you don’t qualify for a traditional startup loan or a business loan for bad credit, consider other options like a business credit card, which usually has more flexible qualification requirements but lower credit limits.
What If You Are Denied a Startup Business Loan?
Having your application for a startup loan denied can be discouraging, but it’s not the end of the road for your business. Understanding the reasons behind the rejection and exploring alternative options can help you regroup and access the funds you need. Follow these steps if you’re denied a startup business loan:
- Find out why your application was denied. Start by reviewing the loan denial letter and factors that influenced the lender’s decision, like a lack of collateral or insufficient time in business. Depending on the type of loan, you can also contact the lender directly or, in the case of an SBA Microloan, review the notice of denial.
- Strengthen your loan application. Once you understand why your application was rejected, address those shortcomings before reapplying. This often involves waiting to borrow until your startup has more established financials, or taking steps to improve your personal credit score by paying down debt and making on-time payments.
- Reevaluate your business plan. Take a closer look at your business plan to ensure it clearly demonstrates your business’s current and potential profitability. This may include providing more detailed financial projections and explaining how the business will use the loan funds.
- Work with an advisor. Whether you’re new to business or a seasoned entrepreneur, working with a mentor or other advisor can provide insight into your business and its financial needs.
- Consider alternative borrowing options. If you don’t have time to improve your credit score or increase revenue, consider another type of startup financing with less stringent lending requirements. For example, if you are denied a traditional loan, a business credit card may offer the funds you need with less robust qualifications. If your startup is simply too new to qualify for conventional financing, consider starting a crowdfunding campaign or working with friends and family to raise the funds you need.
Startup Business Loan Alternatives
If a startup business loan isn’t best for your enterprise or you’re having trouble qualifying, there are other options to pursue to get financing.
- Business line of credit. A business line of credit can give your business access to financing on an as-needed basis, up to a predetermined amount. Any withdrawn amount is then repaid with interest.
- Business credit card. Business credit cards function similarly to consumer credit cards, but they can only be used for business-related expenses. This new business financing option can be easier to qualify for than startup capital loans, but comes with high interest rates and fees.
- Merchant cash advance. With a merchant cash advance (MCA), your business can receive an advance based on future credit card transactions. The advance is then repaid with those transactions, minus a fee. This financing option typically has minimal qualification requirements but can be more costly than other options.
- Small business grants. Before accepting a loan, consider any grant options available to your business. Grants usually don’t have to be repaid, making them a cost-saving option for your business if you can qualify.
Methodology
We reviewed 15 popular lenders based on 16 data points in the categories of loan details, loan costs, eligibility and accessibility, customer experience and the application process. We chose the best lenders based on the weighting assigned to each category:
- Loan cost. 35%
- Loan details. 20%
- Customer experience. 20%
- Eligibility and accessibility. 10%
- Application process. 10%
Within each major category, we also considered several characteristics, including available loan amounts, repayment terms and applicable fees. We also looked at minimum credit score and time in business requirements and the geographic availability of the lender. Finally, we evaluated each provider’s customer support tools, borrower perks and features that simplify the borrowing process—like online applications, prequalification options and mobile apps.
Where appropriate, we awarded partial points depending on how well a lender met each criterion.
To learn more about how Forbes Advisor rates lenders, and our editorial process, check out our Business Loans Rating & Review Methodology.
Frequently Asked Questions (FAQs)
How hard is it to get a startup business loan?
Getting a startup business loan can be challenging, especially without the time-in-business and revenue of an established business. Lenders often require strong credit, a solid business plan and proof of revenue or collateral, which can be difficult for many startups to demonstrate. That said, some lenders and alternative lenders specialize in startups, and you may be able to access funding through SBA programs and grants.
Can I get a startup business loan with no revenue?
You can get a startup business loan with no revenue, but it may be difficult. Because lenders typically impose minimum revenue and time-in-business requirements, you may not qualify for a traditional business loan or you may face less competitive terms. You may also have to personally guarantee the loan, provide collateral to secure the loan or opt for an alternative lender.
What credit score do you need for a startup business loan?
You usually need a credit score of at least 670 to qualify for a startup business loan, but requirements vary by lender. Traditional lenders like banks and credit unions often require scores in the high 600s, while online lenders and equipment financing companies may have less stringent requirements.
How much down payment do I need for a startup business loan?
Not all startup business loans require a down payment, but you may need to put down 10% to 30% of the loan amount, depending on the loan type, lender and your qualifications. Though not always necessary, this lump sum payment reduces the risk to the lender and can improve your approval odds.
