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Best Startup Business Loans

The best startup business loans should be available to new businesses, have reasonable borrower requirements, and have competitive interest rates and terms.

    Chris Motola
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Startup business loans are can almost be a contradiction in terms. Startups need capital to get off the ground, but the best small business loans often require a company to have been in business for an extended period of time to qualify for funding. This can be as long as two years!

Nevertheless, it is still possible to get startup business loans with reasonable terms, as long as you’re openminded about the source.

Below, we’ll look at some of the best sources for startup business loans and lenders who work with very new businesses.

Learn More About Our Top Picks

CompanyBest ForNext StepsBest For
Upstart

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  • Terms loans
  • FICO: 580+
  • ARP: 6.76%+
  • Terms loans
  • FICO: 580+
  • ARP: 6.76%+

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Accion

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

Visit Site

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Fundable

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

Visit Site

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BusinessLoans.com

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

Visit Site

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Discover Personal Loans

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  • Personal loans
  • FICO: 660+
  • APR: 6.99%+
  • Personal loans
  • FICO: 660+
  • APR: 6.99%+

Visit Site

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LendingClub Personal Loans

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

Apply Now

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Read more below to learn why we chose these options.

Table of Contents

6 Best Startup Business Loans

The best startup business loans should be available to new businesses, have reasonable borrower requirements, and competitive interest rates and terms. Generally speaking, they should also have longer repayment terms so as to not be too big a burden on a new business owner’s finances. Here are the best startup business loans from lenders like Upstart, Accion, BusinessLoans.com, and Discover.

Upstart: Best For Young Entrepreneurs

Upstart


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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

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

Accion


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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

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Fundable: Best For Crowdfunding Solutions

Fundable


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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.

Get Started With Fundable

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BusinessLoans.com: Best For New But Established Businesses

BusinessLoans.com


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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 BusinessLoans.com

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Discover Personal Loans: Best For Borrowers With Good Credit

Discover Personal Loans


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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

Get Started With Discover Personal Loans

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LendingClub: Best For Building Credit

LendingClub Personal Loans


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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.

Get Started With LendingClub Personal Loans

Read our in-depth review

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Methodology: How We Chose Our Top Picks

Merchant Maverick considers a number of elements when evaluating business financing products. These include interest rates, term lengths, breadth of services, business loan requirements, and transparency. We then compare these profiles to similar funders and assign them a score.

For this list, we weighted availability to new businesses particularly highly and selected lenders who fill specific lending niches that apply to startup businesses. This list is meant to be a solid starting point for startup business owners seeking financing. You should, of course, do your own comparisons between lenders and get your own quotes, as your borrower profile may be more suited to some lenders than others.

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

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.
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