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Start-Up Business Loan Reviews

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  • 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.

  • Prosper Review

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    Pros Competitive terms and fees Fast application process No prepayment penalty Good customer support Excellent support materials Cons Must have at least fair credit Potential application process delays Overview While it’s unlikely the Vulcans are referring to this company in their traditional greeting, getting a loan from Prosper may be the logical thing to do. Founded […]

  • LendingPoint Review

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    Highlights Personal loans (can be used for business) Installment loans 2-4 year term lengths Targets borrowers with fair credit No fees for early payoff Great customer service Overview LendingPoint, an Atlanta-based lender, was founded to help borrowers improve their personal credit. This company specializes in lending to consumers who have credit scores in the 600-680 […]

  • Fundwise Capital Review

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    Pros No credit rating requirements Good public reputation Cons Opaque terms and fees Some additional fees Overview Fundwise Capital is a Utah-based financial service company that specializes in helping new businesses find funding. Fundwise does not directly lend to businesses. Instead, they’ll attempt to connect qualified customers with third-party funders. Fundwise makes their money through a […]

  • 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.

  • Accion Review

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    Pros Relaxed borrower qualifications Relaxed credit score requirements No prepayment penalty Excellent customer service Suited for startups and small businesses Cons Potentially high APR Some additional fees Overview Accion is a nonprofit company that began as a grassroots organization back in 1961. Originally, the organization specialized in offering microloans and financial education to low-income communities […]

  • AppsFunder Review

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    Pros Crowdfunding tailored to app makers You can offer backers rewards or revenue sharing Cons High fees Platform is little-used Over-complicated rewards AppsFunder takes 5% of your 1st-year app revenue Overview Crowdfunding platforms are proliferating and become more popular by the year, and now along comes AppsFunder with its unique focus on… wait for it… […]

  • Avant Review

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    Pros Suited for startups Competitive terms and fees Easy application process Cons Unsuited for large businesses Some additional fees Overview Founded in 2012, Avant is a lender that offers personal loans to qualified borrowers. Although Avant does not deal directly with business loans, entrepreneurs can use personal loans to fund a startup or new business. […]

  • Best Egg Review

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    Pros Suited for startups Competitive terms and fees Short application process Cons Unsuited for large businesses Stringent borrower qualifications Some additional fees Overview Best Egg, owned by Marlette Funding, offers personal loans to qualified borrowers. Although many customers use Best Egg loans for debt consolation, these loans can also be used for entrepreneurial or business […]

  • Biz2Credit Review

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    Pros Suited for startups 2-7 days time to funding Cons Some additional fees Expensive terms & fees Overview Biz2Credit is a New York-based alternative lending platform that connects businesses to various forms of funding. Be aware that Biz2Credit does not originate its own financial products. Instead, they act as a matching service, ideally saving you […]

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.