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Best Startup Business Loans of June 2024

Startups can face unique challenges in accessing business financing, but shopping smartly can keep borrowing costs in line and increase flexibility.

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By Randa Kriss
Last updated on June 3, 2024
Edited bySally Lauckner
Fact checked and reviewed
Startup business loans help new entrepreneurs get their small businesses up and running. Startup funding can be used to cover working capital expenses such as inventory, payroll, utilities and insurance, or to purchase fixed assets such as furniture, equipment, machinery and real estate.
Most startup business loans are available from online lenders that offer capital to borrowers with one year or less in operation. Although it may be more difficult for new businesses to qualify for traditional small-business loans, some bank and SBA lenders provide startup-friendly options.

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LenderBest forMax loan amountMin. credit scoreAPR rangeMax term length
U.S. Small Business Administration
SBA loans$50,0006208.00-13.00%7 years
Wells Fargo
5.0/5.0  
Bank loans$50,00068013.00-15.00%See review
Headway Capital
5.0/5.0  
Quick funding$100,00062535.00-80.00%See review
OnDeck
5.0/5.0  
Short-term loans$250,00062527.20-99.90%2 years
Fundbox
5.0/5.0  
Unsecured loans$150,00060036.00-99.00%6 months
Bank of America
5.0/5.0  
Secured loansSee review670See reviewSee review
Fora Financial
4.5/5.0  
Bad credit$1,500,000570See review1 year and 6 months
American Express Business Blueprint™
5.0/5.0  
Streamlined application process$250,000660See review2 years
National Funding
4.5/5.0  
Equipment loans$150,000600See reviewSee review
AltLINE
4.5/5.0  
Invoice factoring$10,000,000300See reviewSee review
Accion
5.0/5.0  
Low-income entrepreneurs$250,0005708.49-24.99%5 years
Huntington National Bank
Veterans, women or minority entrepreneurs$150,000UndisclosedSee reviewSee review

Best for SBA loans

U.S. Small Business Administration

Max Loan

$50,000

Min. Credit Score

620

APR Range

8.00-13.00%

Max Term Length

7 years

Best for Bank loans

Wells Fargo

Max Loan

$50,000

Min. Credit Score

680

APR Range

13.00-15.00%

Best for Quick funding

Headway Capital

Max Loan

$100,000

Min. Credit Score

625

APR Range

35.00-80.00%

Best for Short-term loans

OnDeck

Max Loan

$250,000

Min. Credit Score

625

APR Range

27.20-99.90%

Max Term Length

2 years

Best for Unsecured loans

Fundbox

Max Loan

$150,000

Min. Credit Score

600

APR Range

36.00-99.00%

Max Term Length

6 months

Best for Secured loans

Bank of America

Min. Credit Score

670

Best for Bad credit

Fora Financial

Max Loan

$1,500,000

Min. Credit Score

570

Max Term Length

1 year and 6 months

Best for Streamlined application process

American Express Business Blueprint™

Max Loan

$250,000

Min. Credit Score

660

Max Term Length

2 years

Best for Equipment loans

National Funding

Max Loan

$150,000

Min. Credit Score

600

Best for Invoice factoring

AltLINE

Max Loan

$10,000,000

Min. Credit Score

300

Best for Low-income entrepreneurs

Accion

Max Loan

$250,000

Min. Credit Score

570

APR Range

8.49-24.99%

Max Term Length

5 years

Best for Veterans, women or minority entrepreneurs

Huntington National Bank

Max Loan

$150,000

Min. Credit Score

Undisclosed

Best for

SBA loans

The SBA microloan program is designed to offer small loans to new and traditionally underserved businesses. Qualification requirements vary based on lender. In the current 2024 fiscal year, approximately 25% of SBA microloans have been issued to startups.

SBA Microloan

Read Review

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Max Loan Amount
$50,000
Min. credit score
620
Est. APR
8.00-13.00%
SBA microloans are small-sized loans funded by the U.S. Small Business Administration and issued through approved intermediaries, typically nonprofit and community lenders.

Max loan

$50,000

Min. Credit score

620

Apr range

8.00-13.00%

SBA microloans are small-sized loans funded by the U.S. Small Business Administration and issued through approved intermediaries, typically nonprofit and community lenders.
Read Review

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Best for

Bank loans

This SBA-backed business line of credit offers up to $50,000 for startups with less than two years in operation.

Wells Fargo Small Business Advantage® Line of Credit

Max Loan Amount
$50,000
Min. credit score
680
Est. APR
13.00-15.00%
Wells Fargo offers an unsecured line of credit that’s designed for borrowers with less than two years in business.

Max loan

$50,000

Min. Credit score

680

Apr range

13.00-15.00%

Wells Fargo offers an unsecured line of credit that’s designed for borrowers with less than two years in business.

Best for

Quick funding

You can apply for a line of credit from Headway Capital with a simple online application, and if approved, receive funding as quickly as the next business day. You may be able to qualify with a minimum of six months in business.

Headway Capital - Line of credit

Read Review

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Max Loan Amount
$100,000
Min. credit score
625
Est. APR
35.00-80.00%
Headway Capital offers a fast and flexible line of credit for borrowers who may not qualify for more traditional options.

Max loan

$100,000

Min. Credit score

625

Apr range

35.00-80.00%

Headway Capital offers a fast and flexible line of credit for borrowers who may not qualify for more traditional options.
Read Review

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Best for

Short-term loans

OnDeck offers loans for businesses that have been in operation for at least one year, with terms up to 24 months. These loans can be approved within the same day.

OnDeck - Online term loan

Read Review

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Max Loan Amount
$250,000
Min. credit score
625
Est. APR
27.20-99.90%
OnDeck offers a fast term loan for small-business owners with less-than-stellar credit who want to expand.
May fund quickly

Max loan

$250,000

Min. Credit score

625

Apr range

27.20-99.90%

OnDeck offers a fast term loan for small-business owners with less-than-stellar credit who want to expand.
Read Review

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Best for

Unsecured loans

Fundbox offers business lines of credit up to $150,000 and does not require physical collateral. You may qualify with a minimum of six months in business.

Fundbox - Line of credit

Max Loan Amount
$150,000
Min. credit score
600
Est. APR
36.00-99.00%
Fundbox offers a business line of credit to fill a cash flow gap, and qualifying is easier than with other lenders.
May fund quickly

Max loan

$150,000

Min. Credit score

600

Apr range

36.00-99.00%

Fundbox offers a business line of credit to fill a cash flow gap, and qualifying is easier than with other lenders.

Best for

Secured loans

Businesses with at least six months in operation may qualify for Bank of America’s Cash Secured Line of Credit. You can use this credit line to establish a positive account history and build business credit.

Bank of America Cash Secured Line of credit

Max Loan Amount
Undisclosed
Min. credit score
670
Bank of America’s Cash Secured line of credit can help startups cover working capital needs and establish business credit.

Max loan

Undisclosed

Min. Credit score

670

Bank of America’s Cash Secured line of credit can help startups cover working capital needs and establish business credit.

Best for

Bad credit

Fora Financial provides working capital loans for a variety of needs. You may be able to qualify with at least six months in business and a minimum credit score of 500.

Fora Financial - Online term loan

Read Review

with Fundera by NerdWallet

Max Loan Amount
$1,500,000
Min. credit score
570
Fora Financial can be a good fit for borrowers who may fall short of qualifying for traditional bank financing or young but established small businesses looking for speedy financing.

Max loan

$1,500,000

Min. Credit score

570

Fora Financial can be a good fit for borrowers who may fall short of qualifying for traditional bank financing or young but established small businesses looking for speedy financing.
Read Review

with Fundera by NerdWallet

Best for

Streamlined application process

The American Express® Business Line of Credit has a streamlined application process. Owners who started their business at least a year ago may be able to qualify.

American Express® Business Line of Credit

Max Loan Amount
$250,000
Min. credit score
660
The American Express® Business Line of Credit is a good option for business owners with fair credit who want access to working capital.

Max loan

$250,000

Min. Credit score

660

The American Express® Business Line of Credit is a good option for business owners with fair credit who want access to working capital.

Best for

Equipment loans

National Funding offers equipment loans of up to $150,000. You may be able to qualify with six or more months in business.

National Funding - Equipment Financing

Read Review

with Fundera by NerdWallet

Max Loan Amount
$150,000
Min. credit score
600
Borrowers who can't qualify for more traditional loan options might consider National Funding for fast access to capital.

Max loan

$150,000

Min. Credit score

600

Borrowers who can't qualify for more traditional loan options might consider National Funding for fast access to capital.
Read Review

with Fundera by NerdWallet

Best for

Invoice factoring

AltLINE provides invoice factoring with competitive factoring rates. The lender does not have a minimum time in business requirement for approval.

AltLINE - Invoice Factoring

Max Loan Amount
$10,000,000
Min. credit score
300
AltLINE offers fast invoice factoring with competitive factoring rates.

Max loan

$10,000,000

Min. Credit score

300

AltLINE offers fast invoice factoring with competitive factoring rates.

Best 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. It offers funding up to $250,000 for businesses that have been operating for at least 12 months.

Accion Opportunity Fund - Small Business Working Capital Loan

Max Loan Amount
$250,000
Min. credit score
570
Est. APR
8.49-24.99%
Accion is a good option for businesses that haven't been able to secure traditional financing. The lender targets its funding efforts toward minority, women and low-to-moderate-income entrepreneurs.

Max loan

$250,000

Min. Credit score

570

Apr range

8.49-24.99%

Accion is a good option for businesses that haven't been able to secure traditional financing. The lender targets its funding efforts toward minority, women and low-to-moderate-income entrepreneurs.

Best for

Veterans, women or minority entrepreneurs

With reduced fees and free entrepreneurial courses, Huntington National Bank’s Lift Local Business loan program can be a source of startup funding for veteran-, women- and minority-owned businesses.

Huntington National Bank - Lift Local Business Program

Max Loan Amount
$150,000
Min. credit score
Undisclosed
Huntington National’s Lift Local Business loan program is designed to support minority-, woman- and veteran-owned small businesses from startup and on.

Max loan

$150,000

Min. Credit score

Undisclosed

Huntington National’s Lift Local Business loan program is designed to support minority-, woman- and veteran-owned small businesses from startup and on.
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What is a startup business loan?

A startup business loan is any type of loan that helps open or grow a new business. Most of these loans are available from online or alternative sources. Many traditional lenders won’t fund startups because they are considered to be more risky than established businesses, i.e. those that have been in operation for a couple years.
Without an existing track record, lenders have no proof that the business will succeed and be able to repay the loan. As a result, startup business loans may have higher interest rates, require stronger credit and request high-value physical collateral, such as equipment or real estate.

How do lenders define a startup?

A startup is a company that’s in its early stages of development and is focused on growth. This definition can include both businesses that haven’t started operating yet, as well as those that have been operating for several years. In the lending space, however, a startup typically refers to a business that’s been in operation for less than two years.

Pros and cons of startup loans

Pros

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.

Cons

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.


Types of startup business loans

Here are some of the most common types of startup loans.

SBA loans

The U.S. Small Business Administration's microloan program is startup-friendly, offering loans of up to $50,000 for small businesses looking to start or expand. The average SBA microloan is $17,245 in the 2024 fiscal year, so far — with just over 25% of microloans going to startups.
SBA microloans are administered by nonprofit community lenders and are typically easier to qualify for than larger-dollar loans. The downside: Funding may not be sufficient for all borrowers.
The SBA’s flagship 7(a) loan program also offers financing that borrowers can use to start businesses. But SBA 7(a) loans are tougher to get. The loans typically go to established businesses that can provide collateral that a lender can sell if you default. The qualifications are strict, and even if you qualify, applying for an SBA loan can take several months.
The SBA 504 loan program offers long-term financing to assist businesses with the purchase of major fixed rate assets such as equipment or real estate. However, similar to the 7(a) loan program, qualification can be challenging for a business that isn’t established.

Microloans

Microloans are also available outside of the SBA program, and microlenders and nonprofit lenders can be a less difficult route to access startup business loans, especially if you have weak finances. Many of these lenders focus on minority or traditionally underserved borrowers, as well as small businesses in communities that are struggling economically.
Because these startup loans often come from mission-based organizations, the terms will likely be better than you would receive from a private lender, making it possible for you to grow your business and establish better credit. That can help you qualify for other types of financing in the future.

Online loans

Many online lenders offer business loans for startups with one year or less in operation. You'll typically need a minimum of six months in business to qualify. Depending on the lender, you may be able to access different types of financing, such as short-term loans and startup business lines of credit.Compared to more-established businesses, however, you'll generally receive smaller loan amounts, shorter terms and higher interest rates.

CDFI loans

Community development financial institutions (CDFIs) are another provider of startup business loans. These banks, credit unions, and other capital lenders provide financial products and services to local residents and businesses in low-income communities. CDFI loans typically offer competitive interest rates and more flexible qualification requirements than traditional commercial bank loans.
CDFI lenders can be found in all U.S. states, the District of Columbia, Guam and Puerto Rico.

Equipment financing

When securing equipment is necessary for your startup business, an equipment loan can help you finance the purchase. Unlike some other loans, you typically won’t need to put up additional collateral because the equipment you purchase serves that purpose.
Interest rates and repayment terms of equipment loans vary depending on the lender, your business qualifications, the value of the equipment and its useful life.

Invoice financing

Invoice factoring is a type of business financing that involves selling your unpaid invoices for cash. A third-party factoring company purchases your outstanding invoices at a discount.
Invoice factoring is often faster and easier to access than a traditional bank loan — and it doesn’t require you to take on additional debt. This type of financing can be expensive, however, based on the factoring company’s fees and the time it takes your customers to pay their invoices.

Revenue-based financing

Revenue-based financing is a type of funding that allows you to trade an agreed-upon percentage of your future revenue for upfront cash. Depending on your business model, this type of financing can work well because your monthly payment is dependent on how much you make that month.
This means that if you have a month with lower revenue, your required debt payment will be lower too. Revenue-based loans are typically best for high-growth startups that don’t have a lot of other monthly expenses.

How to qualify for a startup business loan

Without an established history of success, it can be difficult to access a startup business loan. Before you start applying for financing, therefore, consider these tips to help you qualify for the most competitive options.

Check your 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.
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.
If you need to improve your credit before applying for a loan, check your credit reports for mistakes that could be weighing down your score and dispute them with the credit bureaus. You should also maintain a low balance on your credit cards and pay all bills on time.

Create a comprehensive business plan with a funding request

A business plan can help you get a loan when it includes a funding request in addition to a market analysis, marketing plan, financial statements and other important information on your business.
A well-thought-out and comprehensive business plan will support your loan application and can help persuade lenders of the potential of your business. The funding request section of your plan can be used to explain how much funding you need, what loan terms you’re looking for and how the money will be used.

Assess any 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.

Demonstrate strong business data if you have it

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.

How to get a startup business loan

The process for getting a business loan will vary based on the type of funding you choose, as well as the lender or financial institution. In general, however, you can follow these steps to get a startup business loan:

1. Determine what kind of financing you need

As a startup, it may be more difficult to get more traditional forms of business financing, so you’ll want to think carefully about what option is right for your needs.
You’ll want to consider how much capital you need and how you’re going to use it. You should also calculate how much debt you can afford, making sure you can cover potential payments without decimating your cash flow.

2. Evaluate your credentials

Next, you’ll want to review common business loan requirements, so you have a sense of where you stand before applying. Although requirements for startup business loans vary, it’s helpful to be able to meet the following minimum criteria:
  • Personal credit score: 500 or higher.
  • Annual revenue: $50,000.
  • Time in business: Six months.

3. Research and compare lenders

You should research several lenders in order to find the right fit for your startup business. As you compare different options, think about factors such as loan types, interest rates, repayment terms, fees, the application process, funding speed and lender reputation.

4. Gather documents and submit your application

Your business loan application process will vary based on the lender and type of loan you choose. Typically, however, you’ll need to provide some, if not all, of the following:
  • 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.
Your lender will also likely ask you to sign a personal guarantee and/or take out a UCC lien on your assets.

5. Review your options

You’ll want to compare multiple loan offers to make sure you’re getting the best deal for your new business. Once you’ve made a decision, you should thoroughly review your business loan agreement and ensure that you understand the rates, terms, fees and repayment schedule.
If you have any questions or concerns about the document, you should contact your lender for clarification before signing.

Steps to take if you are denied a startup business loan

If you’re denied a startup business loan, there are steps you can take that may allow you to still move your business forward.

Ask the lender what influenced the decision

If your lender has declined your application for funding, ask for an explanation of the reasons for its decision. You may be able to address the concerns and then reapply. For example, if the decision was due to a poor credit score, you may be able to take steps to improve your score. Or, if the lender felt a loan was above its risk tolerance, you might offer collateral or a cosigner to lower the risk for the lender.

Try a different type of loan

If you’ve been denied a bank loan or an SBA loan, you may be able to improve your odds of approval by looking for loans with more flexible qualification requirements. This typically includes online loans, microloans and CDFI loans. While these loans often have higher rates and shorter terms, they can be easier to qualify for than a bank or SBA loan.

Start a scaled-back version of your business

If you can’t get funding to start your business, consider launching a scaled-back version of your business that you can finance on your own. This may involve offering fewer products, running the operation yourself instead of hiring staff and delaying the lease of a commercial property.
Here are some steps to start a business that you can take immediately to document your time in operation for future loan applications:
  • Apply for a business license.
  • Get a business credit card.
  • Create a business website and social media profiles.

Strengthen your business plan

As mentioned earlier, your business plan plays an important role in getting funding for your business. Look for ways to improve your plan. Financial statements and projections will be of key interest to lenders. Providing projected profit and loss statements, balance sheets and cash flow statements for a minimum of three years can demonstrate how you plan to generate enough profit to repay loans.
There are companies that specialize in writing business plans for a fee, or you could take advantage of the free or low-cost services offered by SBA resource partners like your local Small Business Development Center or SCORE office.

Alternatives to startup business loans

A startup loan may not always be the best option to finance your new business. If you’re having trouble qualifying, or are wary of taking on debt, consider other types of startup funding.

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🏦 Curious about SBA loans?

Here’s an overview of how SBA loans work, the types of SBA loans that are available, what each loan type can be used for and how to get SBA financing for your small business.

Last updated on June 3, 2024

How Fundera by NerdWallet works

Getting a business loan can be challenging, and several factors — cost, speed, repayment schedule — can play a role in deciding which product is right for you. Let us help you through the process.

1. Fill out one simple application

Answer a few questions about your business to get personalized lending options. It’s free and won’t impact your credit score.

2. See your business loan options

It takes about three minutes to get options from our network of vetted small-business lenders. Compare interest rates and repayment terms to choose the best product for your needs.

3. Get your loan

If the lender approves you, you’ll sign closing documents in order to receive funds. Some lenders can approve and fund loans within one business day.

Methodology

NerdWallet’s review process evaluates and rates small-business loan products from traditional banks and online lenders. We collect over 30 data points on each lender using company websites and public documents. We may also go through a lender’s initial application flow and reach out to company representatives. NerdWallet writers and editors conduct a full fact check and update annually, but also make updates throughout the year as necessary.
Our star ratings award points to lenders that offer small-business friendly features, including:
- Transparency of rates and terms. - Flexible payment options. - Fast funding times. - Accessible customer service. - Reporting of payments to business credit bureaus. - Responsible lending practices.
We weigh these factors based on our assessment of which are the most important to small-business owners and how meaningfully they impact borrowers’ experiences.
NerdWallet does not receive compensation for our star ratings. Read more about our ratings methodology for small-business loans and our editorial guidelines.

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