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Best Startup Business Loans of October 2024

By Randa Kriss
Last updated on September 11, 2024
Edited bySally Lauckner
Fact checked and reviewed
Although some lenders offer business loans for startups, you may need alternative solutions to finance a new business.

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Startup business loans help entrepreneurs get their new companies up and running. Most of these are available from online lenders that offer capital to borrowers with at least six months in operation. After comparing products from more than 30 business lenders, our top pick for the best startup business loan is Headway Capital.

🏆 Our pick: The best business loan for startups

Headway Capital offers a flexible, fast business line of credit that can be used to cover a variety of startup costs. The lender only requires a minimum of six months in operation and an annual revenue of $50,000 — making it our top pick for startup businesses.
Headway Capital - Line of credit
Headway Capital

Headway Capital - Line of credit

NerdWallet Rating 
4.7
Min Credit 

625

Alternatively, if your credit score is lower than 625, check out Fora Financial.
Although Headway Capital is our top pick, there are several other options you can consider — including some from bank and SBA lenders. Read on for our full list of the best startup business loans.

Here are 11 of the best startup business loans

LenderNerdWallet RatingMax loan amountMin. credit scoreNext steps

Headway Capital - Line of credit

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4.7/5

Best for Best overall startup business loan

$100,000625

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SBA Microloan

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Best for SBA loans

$50,000620

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Wells Fargo Small Business Advantage® Line of Credit

4.7/5

Best for Bank loans

$50,000680
Read Review

OnDeck - Online term loan

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4.7/5

Best for Short-term loans

$250,000625

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Fundbox - Line of credit

4.9/5

Best for Unsecured loans

$150,000600
Read Review

Bank of America Cash Secured Line of credit

4.6/5

Best for Secured loans

Undisclosed670
Read Review

Fora Financial - Online term loan

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4.5/5

Best for Bad credit

$1,500,000570

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National Funding - Equipment Financing

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4.2/5

Best for Equipment loans

$150,000600

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AltLINE - Invoice Factoring

4.4/5

Best for Invoice factoring

$10,000,000300
Read Review

Accion Opportunity Fund - Small Business Working Capital Loan

4.6/5

Best for Low-income entrepreneurs

$250,000570
Read Review

Huntington National Bank - Lift Local Business Program

Best for Veterans, women or minority entrepreneurs

$150,000Undisclosed
Read Review

Here are 11 of the best startup business loans

Best for Best overall startup business loan

Headway Capital

Max Amount

$100,000

Min. Credit Score

625

Best for SBA loans

U.S. Small Business Administration

Max Amount

$50,000

Min. Credit Score

620

Best for Bank loans

Wells Fargo

Max Amount

$50,000

Min. Credit Score

680

Best for Short-term loans

OnDeck

Max Amount

$250,000

Min. Credit Score

625

Best for Unsecured loans

Fundbox

Max Amount

$150,000

Min. Credit Score

600

Best for Secured loans

Bank of America

Max Amount

Undisclosed

Min. Credit Score

670

Best for Bad credit

Fora Financial

Max Amount

$1,500,000

Min. Credit Score

570

Best for Equipment loans

National Funding

Max Amount

$150,000

Min. Credit Score

600

Best for Invoice factoring

AltLINE

Max Amount

$10,000,000

Min. Credit Score

300

Best for Low-income entrepreneurs

Accion

Max Amount

$250,000

Min. Credit Score

570

Best for Veterans, women or minority entrepreneurs

Huntington National Bank

Max Amount

$150,000

Min. Credit Score

Undisclosed

I'M INTERESTED IN:

Our pick for

Best overall startup business loan

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 and an annual revenue of at least $50,000.

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%

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

NerdWallet rating 
4.7/5
Max loan amount
$100,000
Min. credit score
625
Est. APR
35.00-80.00%

Our pick 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 (businesses in operation for two years or fewer).

SBA Microloan

Read Review

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Max loan amount
$50,000
Min. credit score
620
Est. APR
8.00-13.00%

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

Max loan amount
$50,000
Min. credit score
620
Est. APR
8.00-13.00%

Our pick 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

Read Review
Max loan amount
$50,000
Min. credit score
680
Est. APR
12.50-13.50%

Pros

  • Bank line of credit (backed by the SBA) with competitive interest rates.
  • No annual fee or prepayment penalties.
  • Available to borrowers with less than two years in business.

Cons

  • May take longer to fund than online lenders.
  • Credit lines only available up to $50,000.
  • Need a Wells Fargo checking account to access online bill pay.

Wells Fargo Small Business Advantage® Line of Credit

NerdWallet rating 
4.7/5
Max loan amount
$50,000
Min. credit score
680
Est. APR
12.50-13.50%

Our pick 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%

Pros

  • Cash can be available within the same business day.
  • Accepts borrowers with a minimum credit score of 625.
  • Streamlined application process with minimal documentation required.
  • Can be used to build business credit.

Cons

  • Not available in Nevada, North Dakota or South Dakota.
  • Requires frequent (daily or weekly) repayments.
  • Interest rates can be high compared with traditional lenders.
  • Requires business lien and personal guarantee.
May fund quickly

OnDeck - Online term loan

NerdWallet rating 
4.7/5
Max loan amount
$250,000
Min. credit score
625
Est. APR
27.20-99.90%
May fund quickly

Our pick 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

Read Review
Max loan amount
$150,000
Min. credit score
600
Est. APR
36.00-99.00%

Pros

  • Financing available within one business day after approval.
  • Simple application with minimal documentation required.
  • Startup-friendly — accepts borrowers with a minimum of six months in business.
  • Low minimum credit score requirement.
  • 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).
May fund quickly

Fundbox - Line of credit

NerdWallet rating 
4.9/5
Max loan amount
$150,000
Min. credit score
600
Est. APR
36.00-99.00%
May fund quickly

Our pick 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

Read Review
Max loan amount
Undisclosed
Min. credit score
670

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

NerdWallet rating 
4.6/5
Max loan amount
Undisclosed
Min. credit score
670

Our pick for

Bad credit

Fora Financial provides working capital loans for a variety of startup needs, such as buying supplies, inventory or equipment. You may be able to qualify with at least six months in business and a minimum credit score of 570.

Fora Financial - Online term loan

Read Review

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Max loan amount
$1,500,000
Min. credit score
570

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

NerdWallet rating 
4.5/5
Max loan amount
$1,500,000
Min. credit score
570

Our pick 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

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Max loan amount
$150,000
Min. credit score
600

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

NerdWallet rating 
4.2/5
Max loan amount
$150,000
Min. credit score
600

Our pick 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

Read Review
Max loan amount
$10,000,000
Min. credit score
300

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

NerdWallet rating 
4.4/5
Max loan amount
$10,000,000
Min. credit score
300

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. 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

Read Review
Max loan amount
$250,000
Min. credit score
570
Est. APR
8.49-24.99%

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

NerdWallet rating 
4.6/5
Max loan amount
$250,000
Min. credit score
570
Est. APR
8.49-24.99%

Our pick 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

Read Review
Max loan amount
$150,000
Min. credit score
Undisclosed

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

Max loan amount
$150,000
Min. credit score
Undisclosed

How Much Do You Need?

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Types of startup business loans

Startup business loans 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. 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 $16,400 in the 2024 fiscal year, so far — with approximately 25% of microloans going to startups (businesses in operation for two years or less).
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 are tougher to get. Nearly 60% of 7(a) loans issued so far in the 2024 fiscal year have gone to businesses with more than two years in operation. These loans typically go to established businesses because they have proof of consistent revenue and 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.

Microloans

Microloans are also available outside of the SBA program, and 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 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 . Compared to more-established businesses, however, you'll generally receive smaller loan amounts, shorter terms and .

CDFI loans

(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. 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 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

is a type of business financing that involves selling your unpaid invoices for cash. A third-party 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

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.

Pros and cons of startup business 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.


How to get a startup business loan

Without an established history of success, it can be difficult to access a startup business loan. While the process for will vary based on the type of funding you choose, as well as the lender or financial institution, there are some general steps you can take to best prepare yourself.

1. Determine what kind of financing you need

As a startup, it may be more difficult to get more traditional forms of , 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 , so you have a sense of where you stand before applying. Although requirements for startup business loans vary, it’s helpful to consider the following minimum criteria:
  • Personal credit score: Although some online lenders offer borrowers (those with a personal credit score below 630), be wary of any lender that offers 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 before applying.
  • Personal finances. Your personal finances will likely weigh heavily into your startup business loan application. A lower and higher personal credit score are ideal to qualify for the best rates.
  • Available collateral. It can be helpful to offer substantial 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 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

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. Create a comprehensive business plan with a funding request

A 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.

5. 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 .
  • 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 and/or take out a on your assets.

6. 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 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 you can 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. You may be able to address the lender’s 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 , you may want to look for loans with more flexible qualification requirements. Consider online loans, microloans or CDFI loans, but be aware that these loans often have higher rates and shorter terms.
  • Start a scaled-back version of your business. If you can’t get funding to start your business, consider launching a smaller 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.
  • Strengthen your business 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 just trying to get your business off the ground, for example, it may be difficult to qualify for a loan.
If you’re having trouble qualifying, or are wary of taking on debt, consider other .

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Last updated on September 11, 2024

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.
To come up with our list of the best startup business loans, we selected lenders with a minimum time in business requirement of less than two years.
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 and our .

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.

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