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| Lender | User ratings | Best for… | Max. loan amount | Term length | Time in business | Min. credit score |
|---|---|---|---|---|---|---|
 | User ratings coming soon | SBA loans | $50,000 | Up to 72 months | Not specified | 620 |
 | Short-term loans | $250,000 | Up to 24 months | 12 months | 625 | |
 | Line of credit | $100,000 | 12, 18 or 24 months | 6 to 12 months | Not disclosed | |
 | User ratings coming soon | Traditional bank | $50,000 | 60 months | Less than 24 months | 680 |
 | Fast funding | $150,000 | 12 or 24 weeks | 6 months | 600 | |
 | Bad credit | $1,500,000 | Up to 15 months | 6 months | 500 | |
 | Equipment financing | $2,000,000 | 12 to 84 months | Not required | 550 | |
 | Unsecured loans | $500,000 | 4 to 24 months | 6 months | 600 | |
 | User ratings coming soon | Invoice factoring | $5,000,000 | Not applicable | Not required | Not required |
 | User ratings coming soon | Minority entrepreneurs | $250,000 | 12 to 60 months | 12 months | Not disclosed |
| Loan amounts | Up to $50,000 |
| Starting interest rate | 8.00% |
| Term length | Up to 72 months |
| Minimum credit score | 620 |
| Minimum time in business | Not specified |
| Pros | Cons |
|---|---|
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 |
Startups needing a small loan can borrow up to $50,000 with an SBA microloan that can be used for working capital, equipment, inventory or other business expenses. SBA microloans typically have less strict credit requirements than other lenders, focusing on underserved business owners like minorities, women, low-income or veteran entrepreneurs.
Remember, these are small loans — you might want to explore other funding options if you envision needing more funds.
| Loan amounts | $5,000 to $250,000 |
| Starting interest rate | 35.40% |
| Term length | Up to 24 months |
| Minimum credit score | 625 |
| Minimum time in business | 12 months |
| Pros | Cons |
|---|---|
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 |
An OnDeck short-term business loan can cover various expenses, such as inventory, marketing campaigns, payroll services, equipment upgrades or consolidation of business debt. To qualify, you must be in business for at least one year with an annual revenue of $100,000. Daily or weekly payments are required, with an average interest rate of 60.90% for term loans.
Note that OnDeck doesn’t serve all industries, namely adult entertainment, loan brokers, firearms vendors and more.
| Loan amounts | Up to $100,000 |
| Starting interest rate | Not disclosed |
| Term length | 12, 18 or 24 months |
| Minimum credit score | Not disclosed |
| Minimum time in business | 6 to 12 months |
| Pros | Cons |
|---|---|
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 Must have an annual revenue of $50,000 or higher to qualify |
A business line of credit with Headway Capital can provide up to $100,000 in revolving funds, helping cover day-to-day expenses or seasonal dips in income. While you only pay interest on the amount you use, some states require a 2% draw fee.
To qualify, your business must operate for six months to one year with an annual revenue of $50,000 or higher.
| Loan amounts | $5,000 to $50,000 |
| Starting interest rate | Prime + 4.50% |
| Term length | 60 months (no annual review) |
| Minimum credit score | 680 |
| Minimum time in business | Less than 24 months |
| Pros | Cons |
|---|---|
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 |
Businesses less than two years old wanting a traditional bank experience can access up to $50,000 with the Wells Fargo Small Business Advantage unsecured line of credit. With over 7,000 physical branches nationwide, Wells Fargo offers a range of small business solutions, including business bank accounts, business credit cards, SBA loans and more.
Once your business has been running for two years, you can upgrade to the Wells Fargo BusinessLine line of credit to access up to $150,000 of revolving funds.
| Loan amounts | Up to $150,000 |
| Starting interest rate | 12 or 24 weeks |
| Term length | 4.66% for 12 weeks 8.99% for 24 weeks |
| Minimum credit score | 600 |
| Minimum time in business | 6 months |
| Pros | Cons |
|---|---|
Receive funds as soon as next business day after approval Low minimum credit score requirement Available in all U.S. states and many territories | Annual revenue of $100,000 or higher needed to qualify Weekly repayments with short terms Doesn’t fund all industries |
If your business needs a quick business loan, a Fundbox business line of credit could fund up to $150,000 with rates starting as low as 4.66%. Use what you need when you need it — and only pay interest on the withdrawn amount.
Your business must operate for at least six months with $100,000 or more in annual revenue to qualify. Funds can hit your bank account as quickly as the next business day.
| Loan amounts | $5,000 to $1,500,000 |
| Starting interest rate | Up to 15 months |
| Term length | Factor rates from 1.10 to 1.40 |
| Minimum credit score | 500 |
| Minimum time in business | 6 months |
| Pros | Cons |
|---|---|
Low minimum credit score requirement Offers prepayment discounts Quick funding times | Can’t have any open bankruptcies Need at least $180,000 annual revenue to qualify Doesn’t report to credit bureaus |
Fora Financial is one of our top picks for a bad credit business loan with a low minimum credit score requirement of 500 and no collateral required. With Fora Financial’s streamlined application process, you can receive funds within 24 to 72 hours after approval.
While certain lenders charge prepayment penalties on business loans, Fora Financial awards you for paying off your debt early.
| Loan amounts | $500 to $2,000,000 |
| Starting interest rate | 3.49% to 28.00% |
| Term length | 12 to 84 months |
| Minimum credit score | 550 |
| Minimum time in business | Not required |
| Pros | Cons |
|---|---|
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 |
Taycor Financial offers financial solutions for brand-new companies with no minimum time-in-business requirement. You can borrow up to $2,000,000 with equipment financing or leasing, or explore other finance options like business lines of credit, bridge loans and term loans.
With a low minimum credit score requirement of 550, low-credit borrowers can access the funds their business needs. Down payments aren’t required, but you might need to provide a personal guarantee.
| Loan amounts | $5,000 to $500,000 |
| Starting interest rate | 1.11 factor rate |
| Term length | 4 to 24 months |
| Minimum credit score | 600 |
| Minimum time in business | 6 months |
| Pros | Cons |
|---|---|
Doesn’t require collateral or a down payment Next-day funding Early payoff discounts | Requires daily or weekly payments Must have $250,000 or higher in annual revenue Factor rates make it hard to compare with other offers |
National Funding offers unsecured business loans of up to $500,000 for startups with no collateral. You can use funds for working capital, marketing, business taxes, inventory and more. With a quick application process, you could receive funds as soon as 24 hours after approval.
Your business must operate for at least six months and have $250,000 or higher in annual revenue to qualify.
| Funding limits | Up to $5,000,000 |
| Advance rate | Up to 90% |
| Invoice factoring fees | 0.75% to 3.50% |
| Minimum credit score | Not required |
| Minimum time in business | Not required |
| Pros | Cons |
|---|---|
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 |
If your startup generates invoices and needs fast capital, altLINE can provide up to $5,000,000 with invoice factoring. Once approved, you can submit unpaid invoices to receive up to 90% of their face value, letting altLINE handle customer payments on your behalf.
Instead of interest rates, altLINE deducts a factor rate, or discount rate, from each invoice’s remaining balance. Low-credit borrowers can typically qualify since altLINE reviews your customers’ creditworthiness, invoices and payment due dates over your credit history.
| Loan amounts | $5,000 to $250,000 |
| Starting interest rate | 7.49% |
| Term length | 12 to 60 months |
| Minimum credit score | Not disclosed |
| Minimum time in business | 12 months |
| Pros | Cons |
|---|---|
Lends to women, people of color and low-income entrepreneurs Offers business coaching and mentorship Flexible repayment terms | Not available in all states Must have $50,000 or more in annual revenue Doesn’t list minimum credit score requirements |
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A startup business loan can help new companies without an established business credit score or access to other types of financing get the capital they need to cover startup costs and grow their business.
You can use a startup business loan to buy supplies and equipment, purchase or lease office space, pay utilities, purchase inventory, hire employees, and more.
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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 business startup loan for your company:
Interest rate: Business loan 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.
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: Decide how quickly you need funds. Alternative lenders typically approve and issue funds within one to three business days, whereas the lending process can take up to two weeks or longer with traditional banks.
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.
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.
New 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 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. 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 is about $13,000. 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.
Figuring out how to get a startup business loan with no money can be tough since most lenders have minimum annual revenue requirements or 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, the Small Business Administration (SBA) typically requires a 10% to 30% down payment for SBA loans, depending on loan type and your qualifications.