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.
9.5 Excellent
Lendzi is a comprehensive business loan marketplace, connecting startups with over 60 lenders offering a variety of financing options. Whether you need a short-term loan, business line of credit, cash advance, or equipment financing, Lendzi makes it easy to compare offers in one place—helping startups find options that fit their unique needs, even with limited credit history.
With a quick online application and soft credit check, you can explore loan options designed for easier approval. If eligible, you could receive funding in as little as 24 hours, making Lendzi a great choice for startups needing fast, flexible financing to grow their business.
| Loan amount | $5,000 – $20,000,000 |
|---|---|
| APR | Varies by lender |
| Min. Credit Score | 580 |
| Loan amount | $5,000 – $20,000,000 |
|---|---|
| APR | Varies by lender |
| Min. Credit Score | 580 |
9 Excellent
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 | Up to $10 million |
|---|---|
| Fee for Terms | 2.75% to 8.25% |
| Loan Amount | Up to $10 million |
|---|---|
| Fee for Terms | 2.75% to 8.25% |
7.4 Great
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% |
| Loan amount | $1,000 – $15,000 |
|---|---|
| APR | 0% |
8.4 Great
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 |
| Min. Credit Score | 600 |
| Loan amount | Up to $150,000 |
|---|---|
| APR | Not stated |
| Min. Credit Score | 600 |
9.6 Excellent
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 |
| Loan amount | Up to $150,000 |
|---|---|
| APR | Not stated |
| Min. Credit Score | 600 |
7.6 Great
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 |
| Loan amount | $5,000 to $600,000 |
|---|---|
| Starting Factor Rate | 1.11 |
| Min. Credit Score | 500 |
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:
Finder also maintains strict editorial integrity and independence. This means our content and suggestions are fair, accurate and trustworthy, and our opinions aren’t influenced by advertisers or partners. To learn more, check out our editorial guidelines here.
Consider several factors when choosing the right type of financing for your startup business.
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.
Consider the benefits and drawbacks of startup business loans before you apply.
To round out your research, consider these business loan lenders to see if they can meet your needs and budget.
The Finder Score crunches 12+ types of business loans across 35+ lenders. It takes into account the product's interest rate, fees and features, as well as the type of loan eg investor, variable, fixed rate - this gives you a simple score out of 10.
To provide a Score, we compare like-for-like loans. So if you're comparing the best business loans for startups loans, you can see how each business loan stacks up against other business loans with the same borrower type, rate type and repayment type.
Here are some of your options for startup business loans.
| Type | Typical loan amounts | Typical term lengths | Best for |
|---|---|---|---|
$13,000 to $5 million | Up to 25 years | Established businesses with decent credit that don’t qualify for other types of funding | |
Up to 100% of the cost of the equipment | 3 to 10 years | Businesses that need heavy equipment or other expensive machinery | |
Up to $2 million | 1 to 10 years | Businesses with good credit looking for large loan amounts and predictable monthly payments | |
$2,000 to $250,000 | 6 months to 5 years | Businesses looking for immediate short-term funding or want a renewable lending source | |
Microloans | $500 to $50,000 | Up to 6 years | Startup businesses or women- or minority-owned firms |
70% to 90% of unpaid invoices | 1 to 3 months | B2B companies with a lot of outstanding invoices | |
70% to 80% of unpaid invoices | 1 to 3 months | B2B companies with a lot of outstanding invoices | |
$5,000 to $200,000 | 3 to 12 months | Retail businesses or others that have a lot of credit card sales |
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:
Some lenders may also require collateral or a personal guarantee to qualify for a startup business loan.
Follow these steps to apply for a startup business loan:
If you don’t qualify for a startup business loan or just want to explore your options, consider these alternatives:
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.
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.
The easiest loans to qualify for are generally short-term loans, equipment loans or merchant cash advances.
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BHG Money is a nonbank lender that offers investment, debt consolidation, startup and healthcare-related loans to licensed professionals. Borrow up to $250K with minimal requirements.
Find financing to grow your business — or even buy another.
Stay away from big banks for a loan of this size.
Though fast, it’s not up front about rates and fees.
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