Startups and newer businesses are seen as more risky for lenders than established businesses. Roughly half of small businesses fail within the first five years, according to the Bureau of Labor Statistics (BLS).
However, that doesn’t mean startups can’t get business loans. In fact, there are many lenders willing to work with young businesses and offer multiple loan options that are easier to get approved for than traditional business loans.
Lendio offers 11 types of business financing, making it a one-stop shop if you want to explore all your options in one place. It partners with more than 75 lenders and has some of the best loan options for fast and easy funding, such as short-term loans, business lines of credit, accounts receivable financing and equipment loans.
All you have to do is apply and prequalify with a soft credit check to review your loan options and find the one that most suits your firm’s needs. If approved, you could see funds in your bank account in as fast as 24 hours.
Loan amount
$1,000 – $10,000,000
APR
Varies by lender
Min. Credit Score
520
Lendio offers 11 types of business financing, making it a one-stop shop if you want to explore all your options in one place. It partners with more than 75 lenders and has some of the best loan options for fast and easy funding, such as short-term loans, business lines of credit, accounts receivable financing and equipment loans.
All you have to do is apply and prequalify with a soft credit check to review your loan options and find the one that most suits your firm’s needs. If approved, you could see funds in your bank account in as fast as 24 hours.
Pros
Offers 11 loan types
Prequalify in minutes with no impact to credit
Partners with more than 75 lenders
Cons
Some loans have high APRs
May require fairly extensive documentation to apply
Not all loan options offer fast financing
Loan amount
$1,000 – $10,000,000
APR
Varies by lender
Min. Credit Score
520
Loan term
3 months to 25 years
Requirements
Operate business in US or Canada for 6 months or more, have a business bank account, minimum 520 personal credit score, at least $8,000 in monthly revenue.
FundThrough offers invoice factoring primarily for B2B businesses. It's a relatively easy way to fill cash flow gaps, and there's virtually no paperwork involved or a credit check. Plus, opening and keeping an account with FundThrough is free, and you'll receive next-day funding as soon as your customer and invoice are approved.
But invoice factoring is an expensive form of financing, with rates starting at 2.75% per 30 days, meaning the longer it takes a customer to pay, the higher the fee. You'll also need an outstanding invoice of at least $100,000 in accounts receivables or invoices to one customer, so it's not a suitable option for all businesses.
Loan Amount
$500 to $10M
Fee for Terms
2.75% to 8.25%
FundThrough offers invoice factoring primarily for B2B businesses. It's a relatively easy way to fill cash flow gaps, and there's virtually no paperwork involved or a credit check. Plus, opening and keeping an account with FundThrough is free, and you'll receive next-day funding as soon as your customer and invoice are approved.
But invoice factoring is an expensive form of financing, with rates starting at 2.75% per 30 days, meaning the longer it takes a customer to pay, the higher the fee. You'll also need an outstanding invoice of at least $100,000 in accounts receivables or invoices to one customer, so it's not a suitable option for all businesses.
Pros
No credit check
Fast funding after invoice approval
Financing up to 100% of invoices
Cons
More expensive than other types of business financing
Rates depend on how long it takes the customer to pay
Requires at least $100,000 in accounts receivables
Loan Amount
$500 to $10M
Fee for Terms
2.75% to 8.25%
Min. Credit Score
500
Loan Term
1 day - 61+ days
Requirements
At least $100k in accounts receivable to one customer, invoice B2B or government agencies, invoices are for completed work, no construction or real estate, no explicit liens on receivables
A crowdfunding platform that doesn't charge interest, Kiva offers microloans up to $15,000 to small businesses of all kinds. And it doesn't care about your credit score, either — although you can't be in foreclosure, bankruptcy or under any liens. But you'll need family and friends to contribute to the loan, and funding could take some time.
Loan amount
$1,000 – $15,000
APR
0%
A crowdfunding platform that doesn't charge interest, Kiva offers microloans up to $15,000 to small businesses of all kinds. And it doesn't care about your credit score, either — although you can't be in foreclosure, bankruptcy or under any liens. But you'll need family and friends to contribute to the loan, and funding could take some time.
Pros
No interest charges
Credit scores not a factor
Loan terms up to 36 months
Cons
Not a fast funding option
Must have family or friends contribute
Loan amounts capped at $15,000
Loan amount
$1,000 – $15,000
APR
0%
Loan term
6 months to 3 years
Requirements
Have at least ten friends and family members willing to contribute to your loan, live in the US, ages 18+, not in bankruptcy or foreclosure, not under any liens, not engaged in: multi-level marketing, direct sales, pure financial investing or illegal activities
Fundbox offers business lines of credit up to $150,000, with a fast application process and a credit decision in as little as three minutes. If approved, you could have access to your line of credit as soon as the next business day. But loan terms are short, and Fundbox doesn’t disclose its range of rates or fees, although it appears that 4.66% may be its lowest rate.
Loan amount
Up to $150,000
APR
Not stated
Fundbox offers business lines of credit up to $150,000, with a fast application process and a credit decision in as little as three minutes. If approved, you could have access to your line of credit as soon as the next business day. But loan terms are short, and Fundbox doesn’t disclose its range of rates or fees, although it appears that 4.66% may be its lowest rate.
National Funding provides equipment financing and leasing up to $150,000. You'll only need to be in business for six months to qualify, and the application process is said to be fast and easy, with funding possible as soon as the next business day.
National Funding doesn't require a downpayment, and it offers discounts for early repayment. But it doesn't disclose its rates on its website, and some reviewers have complained of excessive solicitation efforts.
Loan amount
Up to $150,000
APR
Not stated
Min. Credit Score
600
National Funding provides equipment financing and leasing up to $150,000. You'll only need to be in business for six months to qualify, and the application process is said to be fast and easy, with funding possible as soon as the next business day.
National Funding doesn't require a downpayment, and it offers discounts for early repayment. But it doesn't disclose its rates on its website, and some reviewers have complained of excessive solicitation efforts.
Pros
Accepts newer businesses
Fast approval and funding
Discounts for early repayment
Cons
Max equipment loan is $150,000
Doesn't disclose interest rate range
Loan amount
Up to $150,000
APR
Not stated
Min. Credit Score
600
Requirements
6 months in business, fair to good credit, equipment quote from vendor.
A merchant cash advance by Credibly has a fast and easy approval process. You can get a decision within four hours and funding as soon as the same day. And, with factor rates starting as low as 1.11, it could be less expensive than some of its competitors.
You'll need an average of $15,000 a month in revenue to qualify, but it accepts credit scores as low as 500 and you only need to be in business for six months or more. But loan terms are typically short, and you must agree to weekly or daily automatic repayments.
Loan amount
$5,000 to $600,000
Starting Factor Rate
1.11
Min. Credit Score
500
A merchant cash advance by Credibly has a fast and easy approval process. You can get a decision within four hours and funding as soon as the same day. And, with factor rates starting as low as 1.11, it could be less expensive than some of its competitors.
You'll need an average of $15,000 a month in revenue to qualify, but it accepts credit scores as low as 500 and you only need to be in business for six months or more. But loan terms are typically short, and you must agree to weekly or daily automatic repayments.
Pros
Approval and funding as soon as the same day
Factor rates start at 1.11
Accepts newer businesses
Cons
Daily or weekly repayments can be stressful
Must have at least $15,000 in monthly revenue
May charge fees in addition to factor rates
Loan amount
$5,000 to $600,000
Starting Factor Rate
1.11
Min. Credit Score
500
Loan Term
3 to 24 months
Requirements
500+ credit score, 6+ months in business, $15,000+ average monthly bank deposits
Our team of business loan experts analyze dozens of lenders offering multiple loan types available for startups and newer businesses. We ultimately chose lenders that offer more lenient requirements than more traditional business loans and are willing to work with newer businesses and owners with, potentially, lower credit scores and less revenue.
Some of the criteria we evaluate include:
Interest rates
Additional fees
Loan amounts
Loan terms
Repayment plans
Turnaround times
Credit score requirements
Time in business requirements
Revenue requirements
Reputation of the lender
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How to compare startup loans
Consider several factors when choosing the right type of financing for your startup business.
Rates. Interest rates — or factor rates, in some cases — vary widely depending on the lender and the loan type. Be sure to check with multiple lenders to find the best rates.
Fees. Keep in mind that some lenders charge fees on top of interest rates, which add to the loan’s total cost.
Turnaround times. While some loan types offer fast funding, others — like SBA loans and real estate financing, for example — typically have a lengthier loan process.
Loan terms. Startup loans with easy approval tend to have shorter terms than other types of business financing, so be sure the loan payments fit into your budget.
What is a startup business loan, and how does it work?
A startup loan is designed to help you start or grow your business or cover short-term cash flow or other financing needs. It offers access to capital for covering payroll, buying inventory, hiring new employees, expanding your space or investing in new equipment. Loan types include short-term loans, invoice factoring or financing, equipment loans, merchant cash advances and microloans, among others. Loans may be secured or unsecured.
Most startup loans work much like other types of business funding. You assess your financing needs, consider the loan type that makes the most sense and apply to lenders that offer what you’re looking for. Lenders evaluate your business, creditworthiness and other factors to determine loan approval and disburse funding if approved. You’ll repay the loan with interest according to your repayment schedule.
Some loan types — such as invoice factoring and merchant cash advances — may be less concerned with your credit and more interested in your ability to repay the loan based on your revenues. Lenders that offer these types of loans typically have less traditional repayment schedules, and you may need to agree to weekly or even daily repayment schedules.
Pros and cons of startup business loans
Consider the benefits and drawbacks of startup business loans before you apply.
Pros
Access to a variety of loan types
Capital to start, grow or operate your new business
Fast funding available
Some loan types help to build business credit
Cons
May have higher rates and fees
May require daily or weekly repayments
Typically shorter loan terms
Some loan types may require a personal guarantee
Compare other types of business loans
To round out your research, consider these business loan lenders to see if they can meet your needs and budget.
Retail businesses or others that have a lot of credit card sales
How to qualify for startup business loans with easy approval
The exact requirements to qualify for a startup business loan vary by lender and loan type, but here are some basic criteria you’ll likely need to meet:
Six months in business
$10,000 in monthly revenues
A credit score of at least 500 (some lenders require higher scores)
Business bank account
At least three months of bank statements
Some lenders may also require collateral or a personal guarantee to qualify for a startup business loan.
How to apply for a startup business loan
Follow these steps to apply for a startup business loan:
Define your loan purpose. Figure out exactly what you want to use the loan for and calculate how much you’ll need to accomplish your goal.
Explore loan options. Decide which loan option makes the most sense for your loan purpose and the amount you seek.
Compare lenders. Compare multiple lenders to find the best deal. Be sure to compare rates, fees, requirements to qualify and repayment terms.
Prequalify. If possible, prequalify for the loan before committing to a hard credit check. One way to prequalify is through a lending marketplace like Lendio, which gives you access to multiple lenders and loan types with one application.
Gather your documents. Even startup loans with easy approval typically require some type of documentation to qualify. Items to have on hand include personal and business tax returns, bank statements, loan proposal, business plan and business financial documents.
Apply. In most cases, you’ll apply online and submit the required documentation or provide access to your business bank account.
Wait for approval. Many startup lenders give you a loan decision the same day you apply, but there could be delays if further documentation is needed.
Get funded and follow the repayment plan. You could receive funding as soon as the next day after approval.
Alternatives to startup business loans
If you don’t qualify for a startup business loan or just want to explore your options, consider these alternatives:
Personal loans. Many startups rely on personal loans to help fund their businesses. Requirements to qualify are typically less strict than business loans, but you’ll need good credit to get the best rates.
Home equity financing. If you own your home, you could leverage your home’s equity with a home equity loan or home equity line of credit (HELOC).
Credit cards. For relatively small financing needs, you may want to consider a card with a 0% introductory rate to finance purchases up to a year or more with no interest.
Business grants. Competition can be fierce for grants, and requirements might be strict, but it could be worth a try.
Equity investors. With a solid business plan, you may be able to get investors to help fund your business in exchange for a percentage of your company.
Frequently asked questions
Can I get a startup business loan with a 500 credit score?
It’s more difficult to get a loan with a low credit score, like 500. But some lenders work with borrowers who don’t have great credit. For example, Credibly accepts borrowers with 500 credit scores. Plus, some types of business loans — like invoice factoring and financing — are more concerned with the creditworthiness of your customers than with you.
Which SBA loan is easiest to get approved for?
The SBA Express loan is said to be the fastest type of SBA loan you can get. This claim is mainly because the SBA allows lenders that offer these loans to use their own processes and procedures to approve the loans without requiring SBA review. In exchange, the SBA only guarantees a maximum of 50% of the loan.
What is the easiest business loan to get?
The easiest loans to qualify for are generally short-term loans, equipment loans or merchant cash advances.
Lacey Stark is a freelance personal finance writer for Finder, specializing
in banking, loans, investing, estate planning, and more. She has 20
years of experience writing and editing for magazines, newspapers, and
online publications. A word nerd from childhood, Lacey officially got her
start reporting on live sporting events and moved on to cover topics
such as construction, technology, and travel before finding her niche in
personal finance. Originally from New England, she received her
bachelor’s degree from the University of Denver and completed a
postgraduate journalism program at Metropolitan State University also
in Denver. She currently lives in Chicagoland with her dog Chunk and
likes to read and play golf. See full bio
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