Here are 10 of the best startup business loans
Lender | NerdWallet Rating▼ | Max loan amount▼ | Min. credit score▼ | Next steps |
---|---|---|---|---|
Headway Capital - Line of credit with Fundera by NerdWallet | 4.7/5 Best for best overall startup business loan | $100,000 | 625 | with Fundera by NerdWallet |
SBA Microloan | Best for low interest rates | $50,000 | 620 | with Fundera by NerdWallet |
OnDeck - Online term loan | 4.7/5 Best for short-term loans | $250,000 | 625 | with Fundera by NerdWallet |
Fundbox - Line of credit Read Review | 4.9/5 Best for fast funding | $150,000 | 600 | Read Review |
Bank of America Cash Secured Line of credit Read Review | 4.6/5 Best for secured loans | Undisclosed | 670 | Read Review |
Fora Financial - Online term loan | 4.5/5 Best for bad credit | $1,500,000 | 570 | with Fundera by NerdWallet |
National Funding - Equipment Financing | 4.2/5 Best for equipment loans | $150,000 | 600 | with Fundera by NerdWallet |
AltLINE - Invoice Factoring Read Review | 4.4/5 Best for invoice factoring | $5,000,000 | 300 | Read Review |
Accion Opportunity Fund - Small Business Working Capital Loan Read Review | 4.6/5 Best for low-income entrepreneurs | $250,000 | 600 | Read Review |
Huntington National Bank - Lift Local Business Program Read Review | Best for veterans, women or minority entrepreneurs | $150,000 | Undisclosed | Read Review |
Here are 10 of the best startup business loans
Best for best overall startup business loan
Best for low interest rates
Best for short-term loans
Best for fast funding
Best for secured loans
Best for bad credit
Best for equipment loans
Best for invoice factoring
Best for low-income entrepreneurs
Best for veterans, women or minority entrepreneurs
I'M INTERESTED IN:
Our pick for
best overall startup business loan
With Headway Capital, you can use your line of credit as needed and only pay interest on the money you borrow. As you make payments, you can continue to draw from the line. The revolving nature of this product makes it ideal for new businesses (with at least six months in operation) that need to manage a variety of startup costs.
Headway Capital - Line of credit
Pros
- Flexible qualification requirements.
- No prepayment penalties.
- Funds available by next business day after approval.
Cons
- Most borrowers are subject to a 2% draw fee.
- Not available in all U.S. states.
Headway Capital - Line of credit
Pros
- Flexible qualification requirements.
- No prepayment penalties.
- Funds available by next business day after approval.
Cons
- Most borrowers are subject to a 2% draw fee.
- Not available in all U.S. states.
Qualifications:
- Minimum credit score: 625.
- Minimum time in business: Six months.
- Minimum annual revenue: $50,000.
Our pick for
low interest rates
If you need $50,000 or less in funding, you might consider an SBA microloan. SBA microloans are specifically designed to offer small dollar loans to new and traditionally underserved businesses. Although qualification requirements vary, SBA microloans are more startup-friendly than other SBA loan options. In fact, in the 2024 fiscal year, 24% of microloans were issued to startups (businesses in operation for two years or fewer).
SBA Microloan
Pros
- Can be used for a variety of funding purposes.
- Designed to finance traditionally underserved businesses.
- Startups and business owners with bad credit may be able to qualify.
- Competitive interest rates, low fees and long repayment terms.
- Intermediaries typically offer business training and educational resources.
Cons
- Loan amounts max out at $50,000.
- Can’t be used to pay existing debt or purchase real estate.
- Collateral is likely required.
- Slow funding timeline.
SBA Microloan
Pros
- Can be used for a variety of funding purposes.
- Designed to finance traditionally underserved businesses.
- Startups and business owners with bad credit may be able to qualify.
- Competitive interest rates, low fees and long repayment terms.
- Intermediaries typically offer business training and educational resources.
Cons
- Loan amounts max out at $50,000.
- Can’t be used to pay existing debt or purchase real estate.
- Collateral is likely required.
- Slow funding timeline.
Qualifications:
- Be a U.S. business.
- Show your ability to repay the loan.
- Personal guarantee and collateral likely required.
- Specific financial qualifications determined by individual lender.
Our pick for
short-term loans
OnDeck’s short-term loan can help you purchase equipment or inventory, buy furniture and supplies or launch marketing campaigns. This is a good term loan option for startups that are semi-established; you need at least one year in business and $100,000 in annual revenue to qualify.
OnDeck - Online term loan
Pros
- Cash can be available within the same business day (does not apply in California or Vermont).
- Accepts borrowers with a minimum credit score of 625.
- Streamlined application process with minimal documentation required.
- Can be used to build business credit.
Cons
- Cannot fund North Dakota-based businesses.
- Requires frequent (daily or weekly) repayments.
- Interest rates can be high compared with traditional lenders.
- Requires business lien and personal guarantee.
OnDeck - Online term loan
Pros
- Cash can be available within the same business day (does not apply in California or Vermont).
- Accepts borrowers with a minimum credit score of 625.
- Streamlined application process with minimal documentation required.
- Can be used to build business credit.
Cons
- Cannot fund North Dakota-based businesses.
- Requires frequent (daily or weekly) repayments.
- Interest rates can be high compared with traditional lenders.
- Requires business lien and personal guarantee.
Qualifications:
- Minimum credit score: 625.
- Minimum time in business: One year.
- Minimum annual revenue: $100,000.
- Must have business bank account.
Our pick for
fast funding
If you need fast access to capital, you might consider Fundbox for a startup business loan. You can apply for this line of credit quickly and easily and get a decision in as little as three minutes. Once you’re approved, you can get funds as soon as the next business day. To qualify, your startup needs to have at least three months in operation.
Fundbox - Line of credit
Pros
- Financing available within one business day after approval.
- Simple application with minimal documentation required.
- Startup-friendly -- accepts borrowers with a minimum of three months in business.
- Low minimum credit score, time in business and annual revenue requirements.
- No prepayment penalties, account maintenance fees or inactivity fees.
Cons
- Rates are high compared with traditional banks.
- May require personal guarantee.
- Weekly repayments required over a short term (maximum of 24 weeks).
Fundbox - Line of credit
Pros
- Financing available within one business day after approval.
- Simple application with minimal documentation required.
- Startup-friendly -- accepts borrowers with a minimum of three months in business.
- Low minimum credit score, time in business and annual revenue requirements.
- No prepayment penalties, account maintenance fees or inactivity fees.
Cons
- Rates are high compared with traditional banks.
- May require personal guarantee.
- Weekly repayments required over a short term (maximum of 24 weeks).
Qualifications:
- Minimum credit score: 600.
- Minimum time in business: 3 months.
- Minimum annual revenue: $30,000.
Our pick for
secured loans
Bank of America’s Cash Secured Line of Credit can help startups with at least six months in business cover day-to-day expenses while also building business credit. This product is backed by the security deposit you provide ($1,000 minimum). Using the credit line regularly allows you to establish a positive account history and build your business credit. Bank of America also performs account reviews after 12 months to help you graduate to an unsecured credit line.
Bank of America Cash Secured Line of credit
Pros
- Available to borrowers with at least six months in business.
- No origination fee.
- Responsible spending can help you graduate to an unsecured credit line.
Cons
- Credit limit is based on the security deposit you provide.
- Must have a Bank of America checking or savings account to apply.
Bank of America Cash Secured Line of credit
Pros
- Available to borrowers with at least six months in business.
- No origination fee.
- Responsible spending can help you graduate to an unsecured credit line.
Cons
- Credit limit is based on the security deposit you provide.
- Must have a Bank of America checking or savings account to apply.
Qualifications:
- Minimum time in business: Six months.
- Minimum annual revenue: $50,000 per year.
- Bank of America checking or savings account required.
- Minimum deposit of $1,000.
Our pick for
bad credit
Fora Financial has one of the lowest minimum credit score requirements on our list at 570. If you have a bad credit score and at least six months in business, you might consider this term loan to pay for startup costs or manage cash flow. Keep in mind, however, that you’ll need to be making at least $20,000 per month in revenue, which is higher than other online lenders.
Fora Financial - Online term loan
Pros
- Cash can be available quickly.
- Get a discount for prepaying.
- No collateral required.
- Low minimum credit score requirement.
Cons
- Charges a factor rate that makes it more difficult to compare costs with other lenders.
- Can’t build business credit.
- Longest loan term is 18 months.
Fora Financial - Online term loan
Pros
- Cash can be available quickly.
- Get a discount for prepaying.
- No collateral required.
- Low minimum credit score requirement.
Cons
- Charges a factor rate that makes it more difficult to compare costs with other lenders.
- Can’t build business credit.
- Longest loan term is 18 months.
Qualifications:
- In business for at least six months.
- At least $20,000 per month in revenue.
- No open bankruptcies or dismissed bankruptcies within the past year.
Our pick for
equipment loans
If you need to purchase equipment for your startup, National Funding might be a good option to consider. You can finance up to 100% of the cost of new or used equipment, with a maximum loan amount of $150,000. Because the equipment serves as collateral on the loan, National Funding can offer more flexible qualification requirements than traditional lenders. And, unlike some equipment lenders, National Funding does not require a down payment for its financing.
National Funding - Equipment Financing
Pros
- Funding in as little as 24 hours.
- Prepayment discounts available.
- Offers loans to startups and borrowers with bad credit.
- No collateral or down payment required.
Cons
- Charges a factor rate that makes it more difficult to compare costs with other lenders.
- Requires higher annual revenue than other online lenders.
- Misleading website marketing.
National Funding - Equipment Financing
Pros
- Funding in as little as 24 hours.
- Prepayment discounts available.
- Offers loans to startups and borrowers with bad credit.
- No collateral or down payment required.
Cons
- Charges a factor rate that makes it more difficult to compare costs with other lenders.
- Requires higher annual revenue than other online lenders.
- Misleading website marketing.
Qualifications:
- Minimum credit score: 600.
- Minimum time in business: Six months.
- Minimum annual revenue: $250,000.
Our pick for
invoice factoring
If you’re a new business-to-business company with capital tied up in unpaid invoices, you might consider AltLINE. Invoice factoring from AltLINE allows you to get fast access to your funds — that you can then invest back into your startup. Because this type of financing is based on your invoices, AltLINE focuses more heavily on the creditworthiness of your customers compared to traditional lending criteria. There is no minimum time in business or credit score requirement for approval.
AltLINE - Invoice Factoring
Pros
- Capital available within 24 to 48 hours.
- No collateral required.
- Manages payment collection from your customers.
- Accepts startups and businesses with bad credit.
Cons
- Fees can become expensive the longer it takes your customers to pay.
- Difficult to compare factoring costs to other types of business loans.
AltLINE - Invoice Factoring
Pros
- Capital available within 24 to 48 hours.
- No collateral required.
- Manages payment collection from your customers.
- Accepts startups and businesses with bad credit.
Cons
- Fees can become expensive the longer it takes your customers to pay.
- Difficult to compare factoring costs to other types of business loans.
Qualifications:
- All credit scores may be accepted (ranging from 300 to 850).
- No minimum time in business requirement.
- No minimum annual revenue requirement.
- Must be a B2B business.
Our pick for
low-income entrepreneurs
Accion is a nonprofit lender that specifically targets low-to-moderate income entrepreneurs, as well as women and minority business owners. The company offers loans of up to $250,000 for startups that have been operating for at least 12 months. In addition to funding, Accion also provides educational resources, business coaching and support networks in English and Spanish.
Accion Opportunity Fund - Small Business Working Capital Loan
Pros
- Loan amounts from $5,000 to $250,000.
- Customized loan terms.
- No prepayment penalty.
Cons
- Slower processing speed compared to online lenders.
- Not available in all U.S. states.
Accion Opportunity Fund - Small Business Working Capital Loan
Pros
- Loan amounts from $5,000 to $250,000.
- Customized loan terms.
- No prepayment penalty.
Cons
- Slower processing speed compared to online lenders.
- Not available in all U.S. states.
Qualifications:
- Minimum credit score: 600.
- Minimum time in business: 12 months.
- Minimum annual revenue: $50,000.
Our pick for
veterans, women or minority entrepreneurs
Banks don’t typically fund startups, but Huntington National Bank’s Lift Local Business loan program is designed to help new veteran-, women- and minority entrepreneurs start and grow their businesses. Through this program, you can take advantage of longer-terms, overdraft fee relief and waived monthly account service fees. The program also offers lower credit score requirements than the bank’s other loan options, as well as free financial entrepreneurial courses powered by Operation Hope, a nonprofit financial literacy organization.
Huntington National Bank - Lift Local Business Program
Pros
- Loans starting as low as $1,000.
- No origination fees.
- SBA loans offered with SBA fees paid by Huntington.
- Free financial entrepreneurial courses.
Cons
- Low maximum loan amounts.
- Program only available in certain U.S. states.
- Limited information on terms and fees available online.
Huntington National Bank - Lift Local Business Program
Pros
- Loans starting as low as $1,000.
- No origination fees.
- SBA loans offered with SBA fees paid by Huntington.
- Free financial entrepreneurial courses.
Cons
- Low maximum loan amounts.
- Program only available in certain U.S. states.
- Limited information on terms and fees available online.
Qualifications:
- No bankruptcies in the last 4 years.
- Requirements for credit score, time in business and business revenue not disclosed.
What is a startup business loan?
Types of startup business loans
SBA loans
Microloans
Online loans
CDFI loans
Equipment financing
Invoice financing
Merchant cash advances
Pros and cons of startup business loans
Provides funds to get a business off the ground or grow a young one.
May build business credit history.
Can be helpful in obtaining future funding.
Can be challenging to obtain.
Higher interest rates and shorter terms, typically.
Increases business debt and monthly expenses.
May require personal guarantee and/or collateral.
How to get a startup business loan
1. Determine what kind of financing you need
2. Evaluate your credentials
- Personal credit score: Although some online lenders offer startup business loans for bad-credit borrowers (those with a personal credit score below 630), be wary of any lender that offers startup loans with no credit check or guaranteed approval. It could be an expensive option — or a scam. You’ll typically need a personal credit score of 500 or higher; otherwise, you may need to build your credit before applying.
- Personal finances. Your personal finances will likely weigh heavily into your startup business loan application. A lower debt-to-income ratio and higher personal credit score are ideal to qualify for the best rates.
- Available collateral. It can be helpful to offer substantial collateral on your loan application, even when it’s not required. In general, anything you can use to show your creditworthiness and ability to repay the financing will help you qualify for a startup business loan — as well as help you access more competitive rates and terms.
- Business data. If you’ve been in business for at least six months, putting in the time and effort to create financial projections not only gives a lender an idea of your business’s potential, but it also demonstrates that you are serious about your growth and success. If you’ve already started your business, you’ll need to provide financial and bank statements as well.
- Consider a cosigner. A cosigner on a business loan acts as a second guarantor and can help improve your chances of approval with a lender. If you know a trustworthy person with good personal credit and assets, it may be worth asking them if they’d consider cosigning your startup loan, if needed. However, keep in mind that if you default on the loan, the cosigner’s credit will be adversely affected in addition to your own.
3. Research and compare lenders
4. Create a comprehensive business plan with a funding request
5. Gather documents and submit your application
- Basic information about you and your business, such as an employer identification number or EIN.
- Business licenses or formation documents.
- Personal and business bank statements.
- Personal and business tax returns.
- Financial statements, such as balance sheets and profit and loss statements (if your business is already operating).
- Cash flow projections.
- A business plan for funding.
- Collateral information.
6. Review your options
Steps you can take if you are denied a startup business loan
Alternatives to startup business loans
Methodology
Wondering if you qualify?
It’s possible to get a business loan even if you have bad credit. Bad-credit business loans are available from alternative sources, like online or nonprofit lenders.
Frequently Asked Questions
- A personal credit score of 500 or higher.
- Annual revenue of $50,000 or more.
- Six or more months in business.
- Physical collateral.
- A business plan.
- Business and personal tax returns.
- Business and personal bank statements.
- Financial statements.