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Start-Up Business Loan Reviews

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  • PayPal Working Capital Review

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    Pros Relaxed borrower qualifications No credit score requirement Easy application process No origination fee Excellent support materials Cons Only available to PayPal sellers Potentially high factor rates Poor customer support Overview PayPal is one of the biggest names in the eCommerce space. If you sell online, chances are you use PayPal, at least as a […]

  • Upstart Review

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    Founded in 2012, Upstart began as a truly bonkers idea, in which students agreed to part with a certain percentage of their income for the next 10 years in exchange for capital and mentorship from investors. One fellow, for example, gave up 3.32% of his earnings for the next 10 years in exchange for a $25K loan. While I’m sure there’s some alternate universe where this model works perfectly, the (hilarious) fact that the co-founder had to assure people that the program was not indentured servitude meant that something had to change.

  • Kickstarter Review

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    Pros Most popular business/creative crowdfunding site Suited for large businesses Industry-standard fees Excellent media outreach Cons Limited customer support Not all project proposals are accepted All-or-nothing funding Overview Ever since the World Wide Web was foisted upon a grunge-ridden populace in the early-to-mid 90s, there have been attempts to use the internet’s attention-aggregation power to solicit funds […]

  • FundRazr Review

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    Pros Excellent public reputation Industry-standard fees Nonprofit fundraising supported Can keep whatever you raise Cons Some support materials are dated Platform is less trafficked than major competitors Overview Born in the late 2000s (as crowdfunding began its meteoric rise to fit our capital-starved post-Great Recession era), FundRazr was designed from the start to help people […]

  • Fundable Review

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    Pros Both rewards & equity crowdfunding available Low fees for successful campaigns Good customer support Pre-screening of campaigns benefits backers Cons Flat monthly fee hurts unsuccessful campaigners You get no funds if you don’t reach your funding goal Campaigns must be pre-screened for approval Overview Crowdfunding websites have taken off in the past decade, with […]

  • Kiva U.S. Review

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    Pros Suitable for startups No credit score requirements No interest rates No additional fees No prepayment penalty Good customer support Cons Unsuited for large businesses Lengthy application process Typical time to funding: 1 – 3 months Overview Note: Kiva U.S., the United States branch of Kiva’s microlending service, used to be called Kiva Zip. Previous […]

  • Patreon Review

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    Pros Continuous crowdfunding for creators Platform facilitates reward-giving Fewer content restrictions than other crowdfunders Industry-standard fees Cons Limited help section No built-in promotional tools Overview Patreon is a crowdfunding site aimed at a particular audience: artists and online personalities in the business of content creation. As crowdfunding platforms go, Patreon is enjoying a meteoric rise […]

  • Fora Financial Review

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    Fora Financial is an alternative small business lender based in New York City. Founded by two college roommates, Fora Financial (previously known as Paramount Merchant Funding) is a merchant cash advance and short-term loan provider. Fora boasts all the characteristics common in the merchant cash advance/online loan industry. Qualification is easy, the time from application to funding is fast, and repayment is automated.

  • SoFi Personal Loans Review

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    Pros Suited for startups Competitive rates and fees No additional fees No prepayment penalty Cons Unsuited for large businesses Overview Self-described as “a new kind of finance company” that is “taking a radical approach to lending,” SoFi (short for Social Finance) is a non-bank lender. Although SoFi does not offer any loans specifically for business, […]

  • Capify Review

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    Pros Relaxed borrower qualifications Short application process Typical time to funding: 2 – 7 days Cons Expensive terms and fees Some additional fees Poor customer support Unsuited for seasonal businesses Overview In 2002, Capify is a New York-based merchant cash advance (MCA) service and alternative lender. Like most funders of its type, Capify specializes in […]

What is a Startup Business Loan?

Although term “startup” has many definitions, for the purposes of this category, we define startup loans as any loans used to launch a business. All lenders (and other types of business financiers) reviewed in this category offer financing to businesses three months old or younger.

If you want to know whether your business is eligible to borrow from a specific lender, look at the “Borrower Qualification” section of the review, which lists all the basic benchmarks your business must meet to be eligible for financing.

Startup financing can come from a number of different sources. Here are the most common:

Friends and Family

If you can no longer fund your business enterprise using your own resources, the next step for many entrepreneurs is to borrow from friends and family. Loans from these sources are very flexible, as they don’t tend to carry interest rates or require a set repayment schedule like other sources of capital. However, if you (or your friends and family) want a little more structure, some platforms help you draft up legal documents, create a payment schedule, disperse payments, and other services.

Personal Loans and Lines of Credit

Although it’s not generally advisable for merchants to mix personal and business expenses, exceptions are often made for startups. Because personal loans are based on your own creditworthiness (and not that of your business), they are often a viable source of financing for startups.

Unfortunately, personal loans are not always easy for entrepreneurs to get. To be eligible for a personal loan, you will have to have at least fair personal credit and a strong source of revenue to support repayments.

Business Loans and Lines of Credit

While more difficult to obtain than from other sources, it is possible to get a business loan or line of credit for your startup via your bank, credit union, the SBA, or an alternative (non-bank) lender.

Often, the easiest source of startup business loans is via a nonprofit. These institutions seek to strengthen communities by helping local businesses, and are often able to offer loans with relatively inexpensive rates and fees.

Entrepreneurs who have collateral to put up (such as a house or vehicle) will have an easier time using this type of financing.


A type of funding that has become popular as of late, crowdfunding simply entails raising money via contributions from a large number of people. There are a few different types of business crowdfunding arrangements which vary based on what backers receive for their investment:

  • Debt: You must repay the money borrowed plus interest or a borrowing fee for borrowing. Backers receive their investment back plus some of the interest or fee.
  • Equity: Backers have a share of your business and future revenue.
  • Rewards: Backers receive some sort of reward, often a product made by your business.
  • Donation: Backers simply donate money and receive nothing in return.

Regardless of the rewards model, businesses who use crowdfunding will have to set up a profile, market their business or product, and otherwise attract backers. For this reason, a crowdfunding campaign can take up to a few months to complete.

Cash Flow Financing

Many business lenders are primarily concerned about your business’s overall profitability, which means that startups are often exempt from borrowing. Cash flow financiers, on the other hand, are more interested in your day-to-day revenue stream. The better your revenue, the more money you will be eligible for. As you might expect, cash flow financing is best for startups that are already generating consistent revenue.

Cash flow financing can come in two forms:

  • Short-Term Loans: As the name might suggest, these are loans with short borrowing term lengths. Generally, instead of interest, they carry a fee that is between 10% and 60% of the borrowing amount, and must be repaid on a daily or weekly basis.
  • Merchant Cash Advances (MCAs): Much like short-term loans, merchant cash advances charge a fee of 10% – 60% of the borrowing amount (instead of interest). However, your advance will be repaid by collecting a percentage of your daily sales.

Cash flow financing tends to require hefty fees and fast repayment schedules, so it’s generally advisable to exercise caution and explore other options before resorting to short-term loans or MCAs.

Any cash flow financier that funds businesses of six months or younger will fall into the startup loans category, but for a full list, head over to the merchant cash advance review category.

Invoice Factoring

B2B businesses often have unique cash flow problems caused by slow-paying customers. If you run such a business, invoice factoring may be the solution. Because invoice factoring is contingent on your customers paying, even startups and young businesses are eligible for financing.

In an invoice factor arrangement, a business sells invoices to a factoring company at a discount in exchange for immediate capital. In doing so, merchants can solve problems that may be caused by unpaid invoices and keep their businesses running smoothly.

Invoice factors are not covered in our startup loans category. For a full list of reviews, head over to our invoice factoring category.