Best Startup Business Loans

Total Rating	4.0
Rates & Fees3.6 Pricing 4.0 Affordability 3.3
Services3.4
Eligibility Requirements4.7
Application4.8
Sales & Advertising Transparency4.1 Sales Practices 4.0 Web Presence 4.3
Customer Service3.9
User Reviews4.1

Pros

Borrower qualifications are lower than banks
Rates tend to be inexpensive
No prepayment penalties
Application process is generally fast and easy

Cons

Not available in all states
Low borrowing amounts

Why We Chose Upstart For Startup Loans

Upstart serves a market that most lenders aren’t chomping at the bit to lend to: young adults who are starting a business. As such, Upstart doesn’t weigh credit history as heavily as many of its competitors. Instead its underwriting process focuses on education, credentials, and work experience to make lending decisions.

Upstart Services

Upstart offers personal term loans up to $50,000 with 3 or 5 year terms.

Upstart Rates & Fees

Upstart’s APRs range between 6.76% and 35.99%.

Upstart Eligibility Requirements

To qualify for a loan from Upstart, you must meet these requirements:

Personal credit score of 580+ (applicants with insufficient credit history to produce a score may be accepted)

Get Started With Upstart

Accion Opportunity Fund: Best For Women, Minority, & Foreign-Born Entrepreneurs

Accion

Total Rating	3.8
Rates & Fees5.0 Pricing 5.0 Affordability 5.0
Services2.1
Eligibility Requirements4.1
Application3.5
Sales & Advertising Transparency4.8 Sales Practices 5.0 Web Presence 4.5
Customer Service3.9
User Reviews3.2

Pros

Borrower qualifications are lower than banks
No prepayment penalty
Rates tend to be inexpensive
Fast and easy application process

Cons

Not available in Montana, North Dakota, Tennessee, or Vermont
Minimum requirement of three months in business

Why We Chose Accion Opportunity Fund For Startup Loans

Accion is focused on funding businesses owned by underserved demographics. Not only that, but it offers excellent rates and terms to those borrowers. While its geographical footprint is limited, Accion Opportunity Fund is a great resource for entrepreneurs who can access it.

Accion Opportunity Fund Services

Accion offers business term loans up to $100,000 with 1, 2, 3, or 5 year terms.

Accion Opportunity Fund Rates & Fees

Accion’s APRs range between 5.99% and 17.99%.

Accion Opportunity Fund Eligibility Requirements

To qualify for a loan from Accion, you must meet these requirements:

3 months in business
Annual revenue requirements vary by borrower location

Get Started With Accion

Fundable: Best For Crowdfunding Solutions

Fundable

Get Started With Fundable

Pros

Rewards and equity crowdfunding are both available
Low fees for successful campaigns
Good customer support
Prescreening of campaigns benefits backers

Cons

Flat monthly fee hurts unsuccessful campaigners
Rewards campaigns are all or nothing

Why We Chose Fundable For Startup Loans

Going into personal debt to start a business isn’t always a wise choice. Entrepreneurs that are skilled at promotion can try their hand at crowdfunding their business instead. In that regard, Fundable is more business-focused than most other crowdfunding platforms, with the option to launch either a rewards-based campaign or an equity-based campaign.

Fundable Services

Fundable offers reward-based and equity-based crowdfunding campaigns with no set time limit.

Fundable Rates & Fees

Fundable charges the following fees:

$179/month administrative fee while campaign is active
3.5% + $0.30 per transaction (rewards campaigns only)

If you want Fundable to help connect you with accredited investors, you can do so for a one-time fee of $2,499.

Fundable Eligibility Requirements

To start a Fundable crowdfunding campaign, you must be 18 or older and be funding a type of business served by Fundable.

BusinessLoans.com: Best For New But Established Businesses

BusinessLoans.com

Get Started With BusinessLoans.com

Total Rating	4.0
Rates & Fees4.6 Pricing 4.3 Affordability 5.0
Services4.0
Eligibility Requirements4.1
Application3.0
Sales & Advertising Transparency3.6 Sales Practices 3.0 Web Presence 4.4
Customer Service4.1
User Reviews4.4

Pros

High borrowing amounts
No minimum credit score
Fast and easy application

Cons

Funding can take awhile to disburse
Brand new businesses less likely to qualify

Why We Chose BusinessLoans.com For Startup Loans

BusinessLoans.com is a convenient and versatile loan aggregator. That means that, when you apply, your application will be matched with one or more of BusinessLoans.com partnered lenders. It’s a good way to cover a lot of ground with minimal effort. While the company prefers applicants that have been in business for at least 6 months and have $100,000 in annual revenue, it will still try to place customers who don’t hit those benchmarks.

BusinessLoans.com Services

BusinessLoans.com offers term loans, short term loans, lines of credit, and merchant cash advances. Term lengths and borrowing amounts vary by lender.

BusinessLoans.com Rates & Fees

BusinessLoans.com rates and fees vary by lender.

BusinessLoans.com Eligibility Requirements

These are the preferred requirements for getting funding through BusinessLoans.com:

At least 6 months in business
Annual business revenue of at least $100,000

Get Started With Discover Personal Loans

Discover Personal Loans: Best For Borrowers With Good Credit

Discover Personal Loans	Visit Site

Pros

No extra fees
No prepayment penalties
Funds are disbursed quickly

Cons

Borrower qualifications might be hard to meet

Why We Chose Discover Personal Loans For Startup Loans

Though originally conceived as a lower-cost way to pay down debt, Discover’s personal loans turn out to be a cost effective way to borrow small amounts of money for a variety of purposes, including funding a business startup. The borrower qualifications are on the high side, but successful applicants will get good rates, fast approval, and no additional fees.

Discover Personal Loans Services

Discover offers personal loans up to $40,000 with terms of 5 to 7 years.

Discover Personal Loans Rates & Fees

Discover Personal Loan’s APRs range from 6.99% to 24.99%.

Discover Personal Loans Eligibility Requirements

Borrowers must meet the following requirements to get a personal loan through Discover:

A personal credit score of at least 660
A minimum household income of $25,000

LendingClub: Best For Building Credit

LendingClub Personal Loans

Get Started With LendingClub Personal Loans

Total Rating	4.0
Rates & Fees4.6 Pricing 5.0 Affordability 4.2
Services2.2
Eligibility Requirements5.0
Application4.5
Sales & Advertising Transparency3.4 Sales Practices 3.0 Web Presence 4.0
Customer Service3.7
User Reviews4.2

Pros

Fast and easy application
Funds are disbursed quickly
Builds personal credit

Cons

Low borrowing amounts
Rates can be expensive

Why We Chose LendingClub For Startup Loans

While LendingClub does deal in business loans, entrepreneurs are more likely to qualify for a personal loan, which they can then use for business purposes. LendingClub isn’t the cheapest out there, but its lenient borrower requirements and broad availability make it a good fallback option if you’ve had a hard time qualifying elsewhere. LendingClub also reports on-time payments to credit agencies, making it a good option for building credit.

LendingClub Services

LendingClub offers personal loans up to $40,000 with terms of 3 or 5 years.

LendingClub Rates & Fees

LendingClub’s APRs range from 6.95% to 35.89%.

LendingClub Eligibility Requirements

LendingClub does not have any specific credit score requirements, but you’ll need to have a verifiable bank account to apply.

Loan Marketplace Review Methodology

We spend hours researching and evaluating each business loan marketplace we review at Merchant Maverick, placing special emphasis on key characteristics to generate our ratings.

When rating lending marketplaces, we use a 39-point rubric that looks at rates and fees, services, eligibility requirements, application, sales and advertising transparency, customer service, and user reviews. We weigh each section differently to calculate the total star rating.

Rates & Fees: 15% of the total star rating
Services: 30% of the total star rating
Eligibility Requirements: 15% of the total star rating
Application: 15% of the total star rating
Sales & Advertising Transparency: 10% of the total star rating
Customer Support: 10% of the total star rating
User Reviews: 5% of the total star rating

Each section is further broken down into granular, weighted subsections, in which we examine specific attributes like the variety of lending products and partners available, terms lengths, conditions of repayment, credit score and revenue requirements, ease of application, length of time to funding, the ethics involved in promoting the loan marketplace.

Read more about how we rate loan marketplaces.

Understanding Startup Business Loans

Types Of Startup Business Loans

The lenders we selected offer a few different types of business loans. These include:

Term loans: Term loans can be personal loans or business loans. They typically have longer repayment terms and lower interest rates, making them ideal for startups.
Microloan: Essentially, a small business microloan is a term loan for less than $50,000. These are often easier to get and have better rates than larger-term loans, making them ideal for startups.
Short-term loans: These have flat fees and repayment terms usually under 18 months. With short-term loans, payments are made daily or weekly. Generally not a good fit for brand new businesses, but may work for those that have been in business a few months and are generating revenue.
Crowdfunding: Generally, crowdfunding for business has low borrower requirements and costs but requires more legwork. Can be ideal for entrepreneurs who are good at generating publicity or donor interest.
Merchant cash advance: Like short-term loans, merchant cash advances are very revenue-dependent. They tend to be expensive. May work for businesses that have been around a few months and do a lot of credit card sales.
Lines of credit: With a line of credit, you can establish a fund you can draw upon at will up to a credit limit. May be challenging to get as a startup, but can be excellent if you don’t know exactly how much your expenses will be.

How To Choose The Best Startup Business Loan

The best startup loan for your business idea may not necessarily be the best startup loan for someone else’s. You’ll want to keep in mind the following factors when you’re looking:

The amount of money you need to borrow
Loan repayment time
How soon your revenue will come online
The total cost of borrowing (interest, fees, etc.)
Your personal credit score and credit history
Any collateral requirements
Your resources for running a crowdfunding campaign (if you choose to)

With all of these elements in mind, you’ll be able to pinpoint the best startup business loan for your needs.

FAQs: Startup Business Loans

Do banks give loans for startups?

Yes, it’s possible to get a startup loan from a bank provided you have the credit rating and, typically, collateral to cover the loan.

What credit score is needed for a startup business loan?

Credit scores for startup loans can vary greatly by lender. Not all startup loan lenders have minimum credit requirements, but you’ll have an easier time getting a startup loan if your credit score is 640 or higher.

Are loans good for startups?

Loans can be a great way to start a business provided you have the means to repay your loan on time. If you have limited resources, you may have been luck with crowdfunding or bootstrapping your business.

Is it harder for startups to get a business loan?

It can be harder for startups to qualify for business loans since many lenders want to that a business is profitable before they lend it money. One way to get around this Catch-22 is to use personal loans to finance the early stages of a business.

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Chris Motola

Senior Staff Writer at Merchant Maverick

Chris has been writing about small business topics since 2003. In 2015, he joined Merchant Maverick, where he writes about business financing, payment processing, and demographic trends in entrepreneurship. Chris has been featured in Fox Business, ABC News, Yahoo Finance, GoBankingRates, Newsweek, BizJournals, and other publications. He has a Bachelor’s of Arts in English Writing Arts from SUNY Oswego, and a Masters of Science in Interactive Media from the University of Central Florida. He currently resides in the Hudson Valley region of New York.

View Chris Motola's professional experience on LinkedIn.

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1. Upstart

❮ ❯

Terms loans
FICO: 580+
ARP: 6.76%+

2. Accion

❮ ❯

Terms loans
FICO: N/A
APR: 5.99%+

3. Fundable

❮ ❯

Crowdfunding campaigns
FICO: N/A
APR: N/A

4. BusinessLoans.com

❮ ❯

Term loans, short-term loans, lines of credit, merchant cash advances
FICO: N/A
APR: Varies by lender

5. Discover Personal Loans

❮ ❯

Personal loans
FICO: 660+
APR: 6.99%+

6. LendingClub Personal Loans

❮ ❯

Personal loans
FICO: N/A
APR: 6.95%+