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Large loan amounts
Simple application process
Long-term financing available
Fundbox is an AI-powered financial platform that was founded in 2013. It’s a great option if you’re worried that your less-than-perfect credit history might prevent you from obtaining a business startup loan since Fundbox accepts applicants with very low credit scores.
Read full reviewBest loan option:
Line of credit
Credit score requirement:
500
Minimum time in business:
Three months
Minimum annual revenue:
$50,000 (recommended)
Loan amounts:
$1,000-$100,000
Repayment term:
12 or 24 weeks
Fee to look out for:
Borrowing fee
BBB rating:
A+
Kabbage is a financial technology company that offers direct funding to its clients, primarily through lines of credit. Due to Kabbage’s automated system, its customers are able to receive small business loans for their startups in no more than 10 minutes.
Read full reviewBest loan option:
Line of credit
Credit score requirement:
540 (recommended)
Minimum time in business:
12 months
Minimum annual revenue:
$50,000 (or $4,200/month for the last three months)
Loan amounts:
$2,000-$250,000
Repayment term:
Six, 12, or 18 months
Fee to look out for:
Late fee
BBB rating:
NR
Large loan amounts
Simple application process
Long-term financing available
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Since its founding in 2011, Lendio has funded more than 216,000 small business loans. The marketplace includes loan options from reputable partners such as Bank of America, Headway Capital, American Express, and many others. Lendio’s new business loans are perfect for ambitious entrepreneurs who know how to plan ahead.
Read full reviewBest loan option:
Startup loan
Credit score requirement:
680
Minimum time in business:
Six months
Minimum annual revenue:
N/A
Loan amounts:
$500-$750,000
Repayment term:
1 to 25 years
Fee to look out for:
None
BBB rating:
A+
Prepayment benefits
Credit reporting
First-loan interest waived for repeat borrowers
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OnDeck is an online loan company that delivered $13 billion to businesses all over the world. The company offers perks to repeat borrowers, so those that fear that they might need several small business startup loans should definitely consider it.
Read full reviewBest loan option:
Term Loan
Credit score requirement:
600
Minimum time in business:
12 months
Minimum annual revenue:
$100.000
Loan amounts:
$5,000-$250,000
Repayment term:
3 to 18 months
Fee to look out for:
Origination fee
BBB rating:
A+
Building something from the ground up is extremely difficult, especially when that something is as fickle as a startup business. The main problem that these kinds of companies face is running out of funds before they start turning a profit, which is why we recommend looking into startup business loans, among other options. To give you a hand with that, we’ve written down the criteria we used for rating the loans featured on our list.
Calculating how much money you need and determining the amount you can pay back are the first things any borrower should consider, which is why we kicked off our research by locating companies that offer a wide range of loan amounts.
The ways in which people choose to run their businesses can be as different as the people themselves, so providing you with a list of nearly identical business startup loans just didn’t seem right to us.
That’s why we did our best to present you with loan options that involve various funding arrangements. After all, while some prefer one large payment, others may be more comfortable with several smaller ones.
When obtaining a loan, there are two things you don’t want to drag out. The first is the application process. Filling out endless forms and sending in piles of documents can be extremely frustrating. What’s more, getting rejected means that all your efforts are wasted. Our goal is to find loan companies with a fast and simple application process.
The second time-sensitive service that plays a vital part in our examination of startup business loans is the speed at which borrowers receive their funds. Even if you’re not in a rush, sooner is always better when it comes to getting money.
Experienced entrepreneurs know that planning ahead is one of the key aspects of managing a successful business. However, deciphering what the future holds for a startup can be quite difficult, which is why we sought out lenders that offer a certain amount of flexibility with the repayment period.
Whether you’re looking at loans to start a business, advance it, or get it out of a rough spot, your main concern should be affordability. But while reasonable APRs and low fees are important, you shouldn’t be too surprised to see slightly higher-than-average rates on loans extended to startups.
This is because newly formed businesses are risky investments, and lenders need to protect themselves by making sure that they get back at least as much as they had invested.
It may seem impossible to get a loan for a startup business since it lacks the history and credit that many traditional banks use to estimate its creditworthiness. Fortunately, there are companies out there willing to take a chance on startups.
Although lenders usually require a credit score of 700 or higher in order to fund a new business, we don’t want to add that to the list of obstacles. Therefore, we offer options that you can access even if your credit history isn’t perfect.
Aside from that, we also pay attention to the criteria regarding the minimum years in business as well as the minimum annual revenue that you have to meet to qualify for a quality startup business loan. We found loans that you can apply for even if you’ve only been in business for a few months or have a relatively small annual revenue.
The loan companies on our list offer the most suitable loan product for startups. But we also examined some of their other services seeing as it’s often much easier to receive all of your financial support in one place. This can be especially beneficial with lenders that offer perks for existing customers.
Fundbox is an online platform where you can obtain some of the best startup business loans currently available. Although the company was established in 2013, it began offering lines of credit just four years ago. Since then, hundreds of thousands of entrepreneurs have turned to Fundbox for their business financing needs.
Fundbox is an excellent choice if you need to borrow a small amount to plug up a few holes in your startup. The maximum amount you can borrow is $100,000, and you can choose to repay your debt in 12 or 24 weeks. Fundbox will auto debit your payments from your bank account. Once you’ve paid back what you owe, your approved amount will be available to you again.
To get a startup loan for a new business through Fundbox, you won’t have to pay an application fee, but once you’re approved for funding, you’ll be obligated to settle a borrowing fee every time you draw funds. The fee may vary from one consumer to another and change over time. It’ll be around 4.66% for a 12-week term and 8.99% for a 24-week term.
One of the best things about Fundbox is that it has a unique approach to loan applications – there is no paperwork. To establish an account you just need to connect your accounting software or bank account to the Fundbox platform. You’ll get a decision regarding your small business startup loan in a matter of minutes thanks to the platform’s data analytics tools.
Once you’ve made a withdrawal request, the money will be deposited directly into your account within 24 to 48 hours.
You’ll have a hard time finding a loan company with fewer eligibility requirements than Fundbox. Aside from a credit score of at least 500, it’s preferable that you have two or more months of activity recorded on your accounting software or three months of transactions on your business bank account. Although Fundbox doesn’t have any minimum annual revenue stipulation, our research shows that earnings of approximately $50,000 would increase your chances of approval.
Aside from enabling customers to obtain start-up business loans with bad credit, Fundbox offers invoice financing and a Paycheck Protection Program. Invoice financing allows you to get money before your customers pay, while Paycheck Protection lets you borrow up to $2 million at a 1% interest rate.
The PPP is part of the coronavirus relief program, and the loans are 100% forgivable as long as you use 60% of the money for payroll costs within a period of eight or 24 weeks.
Reasons to choose Fundbox
Fast credit decisions
Paycheck Protection Program
Invoice financing
Since it was founded in 2009 by Rob Frohwein, Marc Gorlin, and Kathryn Petralia, Kabbage has extended more than $9 billion in loans to small business owners. If you need a business loan for your startup that’s quickly deposited into your account, then you’ve come to the right place.
With Kabbage, you can qualify for a line of credit ranging from $2,000 to $250,000 and six, 12, or 18-month terms. However, Kabbage’s interest rate structure is a bit more complicated. For the first six months of a six-month loan, you’ll pay an interest rate that’s between 1.5% and 10% of the principal. The same goes for the first six months of a 12-month loan and the first nine months of an 18-month loan. During the remaining months of small startup business loans, the interest rate is reduced to 1%.
Since January 1, 2021, clients can pay just 2.9% + $0.25 per transaction through the use of Kabbage Payments.
There’s also a late fee you should be aware of, which varies based on your outstanding account balance. If the balance due is less than $100, the fee is $10. For amounts between $100 and $5,000, you’ll need to pay $35, and for any unsettled debt over $5,000, you’ll be charged $100. The fee is applied if your payment is more than four days late.
Kabbage’s application process for startup business loans is similar to that of Fundbox. After you’ve connected your checking account, bookkeeping software, or payment platform, it’ll only take a few days for your line of credit to be approved and funded.
Through the Kabbage Funding dashboard or mobile app, you can withdraw as little as $500, and with the Kabbage Card, which you can request at no extra cost, there’s no minimum withdrawal amount. Withdrawals can be made whenever you like, and the money is deposited into your account in under 10 minutes.
Kabbage is a good option for startup business loans with no collateral since the company’s qualification criteria aren’t very demanding. There’s no official credit score requirement, but you’ll need it to be around 540 in order to qualify. Plus, your business will need to be at least 12 months old and make $50,000 per year or $4,200 per month over the last three months.
Small businesses are able to apply for a Payment Protection Program loan through Kabbage. These loans are available for up to 2.5 times your average monthly payroll during the year preceding the application, and they can’t exceed $2 million.
If you plan on using one of these loans for a startup business, you should know that PPP loans are forgiven in full only if the number of people you employ and their paychecks remained consistent with pre-COVID levels.
Reasons to choose Kabbage
Small minimum withdrawal limit
Free Kabbage Card
Extremely flexible funding
Lendio’s CEO Brock Blake originally set up a lending company called FundingUtah in 2006, which later became FundingUniverse. In 2011, he decided to start over and launched Lendio. Today, this online marketplace has a network of more than 75 lenders and offers several great financing options.
Typically, loans intended for newly formed businesses range between $9,000 and $20,000 with interest rates that go as high as 28%. Lendio, on the other hand, can connect you to lenders that offer startup loans for amounts as low as $500 and as high as $750,000 with interest rates that don’t exceed 17%.
Seeing as you’ll have plenty of loans to choose from, you’ll also encounter a number of term lengths. The options range from a single year to 25 years.
Perhaps the best part about using Lendio to obtain business capital is that it’s free. But while Lendio doesn’t charge an application fee, many individual lenders do, so make sure you’re familiar with these expenses before starting the paperwork.
Finding the right new business loan is stressful enough without having to go through a long application process. This is something that you won’t have to endure as a Lendio customer.
All you have to do is create an account and fill out a single online form after which Lendio will perform a soft credit check, which won’t impact your credit score. The whole process shouldn’t take longer than 15 minutes.
You’ll probably start to receive offers within 72 hours, and once you’ve made your decision, it’ll take around two to four weeks for the funds to be credited to your account.
Through Lendio, you can acquire either a secured or unsecured business loan for your startup. Which one you get depends on your level of creditworthiness.
The majority of Lendio’s partners have a credit score requirement of 680, which unfortunately might be too high for some. On the plus side, you only need to be in business for six months in order to qualify. Certain lenders will also want to know if you’ve had any prior experience with setting up or running a startup.
Lendio specializes in providing its clients with a wide selection of financial products, but instead of listing them all, we’d like to direct your attention to a loan that is similar to loans for a startup business.
If your startup is in need of new software, cooking appliances, vehicles, or any other supplies, you should consider an equipment financing loan. Although you can use a startup loan to buy these things, equipment financing has its own perks.
In just 24 hours, you can have anywhere between $5,000 and $5,000,000. The loan terms range from one to five years, and your loan rate can be as low as 7.5%.
Reasons to choose Lendio
Free service
Soft credit check
Many loan types
OnDeck is headquartered in New York, but it also has offices in Virginia, Colorado, Canada’s Toronto, and Montreal as well as Sydney, Australia. In July 2020, OnDeck was acquired by Enova. Nevertheless, all of its services and products have remained the same. This global loan company is best suited for borrowers that can anticipate needing a second small business loan for their startup.
The maximum amount you can get with an OnDeck term loan is $250,000, and the minimum is $5,000. This might be too much money for some borrowers, but remember that you can get up to 18 months to repay the loan. You’ll be able to choose between paying back the loan in daily or weekly installments.
The SMART Box Capital Comparison tool will enable you to see a detailed overview of your business financing. For example, if you borrow $75,000 with a 12-month term and weekly payments, your origination fee will be $1,875 with an APR of 24.20%.
You can pay off OnDeck’s online business loans for startups early and have the rest of the interest waived. Moreover, you can do it without incurring any penalties.
Whether you choose to apply over the phone or by filling out an online form, you won’t need more than a few minutes to complete the process. The company will ask you for your Business Tax ID number, Social Security number, estimated annual gross revenue, and average bank balance. Those eligible for an OnDeck loan will receive their funds on the same day they apply.
To get unsecured startup business loans from OnDeck, your business needs to be 12 months old with annual revenue of $100.000, while your personal FICO score should be no less than 600. This loan company doesn’t offer its services to a number of industries including adult entertainment, drug dispensing, firearms vendors, vehicle dealers, and gambling.
If your first OnDeck lending experience was satisfactory and you realize that you could use a few more dollars, we suggest that you go back to this same lender because returning customers are entitled to generous benefits. After you take out a second small business loan for startup financing, the remaining interest on your current loan will be removed, and the origination fee on your next loan could be as low as 0%.
OnDeck’s revolving credit line is another excellent loan option you should consider. It allows you to borrow anywhere from $6,000 to $100,000. The funding is instant, and the 12-month repayment term resets after every single withdrawal.
Another advantage to choosing OnDeck as your lender is that it reports your payment history to credit bureaus. It may not seem like much, but if you’re diligent in repaying your unsecured startup loans on time, you could see a notable credit score increase.
Reasons to choose OnDeck
Highly transparent pricing
0% origination fee for repeat borrowers
Repayment term resent for credit lines
Starting a small business is challenging, and although we can’t really help you with every step of the process, we can offer some useful recommendations and explanations. In addition to providing our list of high-quality funding options for startup businesses, we’ll briefly go over the main details regarding the most popular ones.
Before we dive deeper into our topic, let’s first clarify exactly what business loans for startups are. This is a form of business financing intended for startups that have been in business for less than 24 months. These loans are usually unsecured but can be secured as well.
It’s important to note that loans for financing startups can come in all shapes and sizes, so even if a company doesn’t necessarily have the word “startup” in the name of their loan product, it doesn’t mean that it can’t be used for new businesses.
There’s a very simple explanation for this – sometimes lenders may offer several business loans for startup companies and are simply trying to avoid confusion by not referring to all of them by the same name. In most cases, the loan can be used to fund both young and mature businesses.
A typical startup loan is often just a term loan, which is repaid through regular payments stretched out over a previously agreed-upon time period. You’ll usually be offered either a weekly or monthly repayment schedule. Term loans can last anywhere from one year to 30 years, depending on the lender.
The key benefit to selecting a term loan as your business loan for a startup company is that most come with low-interest rates and high loan amounts. Unfortunately, they might be hard to qualify for and include a number of fees.
Some businesses need quick responses. As such, a term loan would be far too slow a solution for them. This is where lines of credit come in. They offer entrepreneurs flexibility, and the possibility of seizing a business opportunity as soon as it presents itself. However, the amounts that you can withdraw are relatively small.
Despite the conveniences, not many people consider lines of credit when they think of a loan for a new business. This is often the result of banks not advertising lines of credit because they earn more from long-term lending options.
Many small businesses just need to buy a few pieces of equipment to keep their operation running smoothly, and that’s exactly where equipment financing loans come in. While interest rates on equipment financing loans tend to be costlier than those on standard term loans, they are easier to apply for and obtain. That’s because they are, by nature, secured loans since the items you’re purchasing are the collateral.
Equipment loans for startup business financing can be quite useful for keeping up with the latest technology in your industry. The extra funds can also enable you to expand your business venture.
Invoice financing is a form of asset-based financing, but instead of handing over a car or a piece of real estate, you put up the amount due by your customers as collateral. It enables you to maintain a steady cash flow, and what’s more, it can be obtained quickly and with a low credit score.
Keep in mind that this is only a temporary solution and that you need to get to the root of the problem for your business to succeed. Even the best startup funding options can’t help you if your clients don’t pay you.
There are various kinds of loans that can be used to finance a startup, but your ability to secure one depends on the credit score and annual revenue of your business. Online loan companies tend to give out more loans to startups than banks and have fewer requirements.
Yes, you can get help with starting a small business through the SBA. To qualify, your business has to be officially registered as a for-profit business, and as its owner, you can’t be on parole. In addition, you can have up to 500 employees, and your annual revenue for the past three years can’t exceed $7.5 million.
SBA loans are great for starting a business as the government usually finances a portion of the loan. This makes SBA loans less risky for lenders, which translates into lower interest rates.
Start-up business loans are hard to get with banks, so we suggest that you look at online lenders and lending platforms instead. But before you start browsing the internet, make sure you know how much money you need and how fast because it’ll help you with narrowing down your options and prevent you from getting overwhelmed with all the different choices.
