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Best Startup Business Loans April 2024

Startup loans have been trending for the past few years and with good reason. These loans are designed to provide a little extra cash to those small business owners who need it in order to fund their new business ventures. Startup loans, including equipment purchasing, commercial real estate financing, and other types of financing can help the entrepreneur launch their business and get started with the loan repayment process from day one.

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Key Facts

  • Free-to-use marketplace with a choice of vetted lending partners.
  • Borrowers are in control and can compare competitive loan options.
  • No prepayment fees and origination fees as low as 0%

Pros

pros iconTwo minute application process

pros iconNo hard credit check for prequalified rates

Cons

cons iconNot available in New York and Hawaii

cons iconBBA rating of 1.27 stars out of 5

Personal Loans Rate and Terms Disclosure: Rates for personal loans provided by lenders on the Credible platform range between 4.60% – 35.99% APR with terms from 12 to 84 months. Rates presented include lender discounts for enrolling in autopay and loyalty programs, where applicable. Actual rates may be different from the rates advertised and/or shown and will be based on the lender’s eligibility criteria, which include factors such as credit score, loan amount, loan term, credit usage and history, and vary based on loan purpose. The lowest rates available typically require excellent credit, and for some lenders, may be reserved for specific loan purposes and/or shorter loan terms. The origination fee charged by the lenders on our platform ranges from 0% to 8%. Each lender has their own qualification criteria with respect to their autopay and loyalty discounts (e.g., some lenders require the borrower to elect autopay prior to loan funding in order to qualify for the autopay discount). All rates are determined by the lender and must be agreed upon between the borrower and the borrower’s chosen lender. For a loan of $10,000 with a three year repayment period, an interest rate of 7.99%, a $350 origination fee and an APR of 11.51%, the borrower will receive $9,650 at the time of loan funding and will make 36 monthly payments of $313.32. Assuming all on-time payments, and full performance of all terms and conditions of the loan contract and any discount programs enrolled in included in the APR/interest rate throughout the life of the loan, the borrower will pay a total of $11,279.43. As of March 3, 2022, none of the lenders on our platform require a down payment nor do they charge any prepayment penalties..

Prequalified rates are based on the information you provide and a soft credit inquiry. Receiving prequalified rates does not guarantee that the Lender will extend you an offer of credit. You are not yet approved for a loan or a specific rate. All credit decisions, including loan approval, if any, are determined by Lenders, in their sole discretion. Lenders will conduct a hard credit pull when you submit your application. Hard credit pulls will have an impact on your credit score. Lowest rate advertised is not available for all loan sizes, types, or purposes, and assumes a very well qualified borrower with an excellent credit profile. Loan Example: A $10,000 loan with a 5-year term at 13% Annual Percentage Rate (APR) would be repayable in 60 monthly installments of $228 each. The actual payment amount and year-end balance will vary based on the APR, loan amount, and term selected. In this case the total amount expected to pay by the borrower will be $13,680.

Bonus disclosure:
“All bonus payments are by gift card.”

*Not all available financial products and offers from all financial institutions have been reviewed by this website

  • $1K-$100K Loan Amount
  • 600 Min Credit
  • 5.99-35.99% APR
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Key Facts

  • Good credit gets low rates and zero fees
  • Fast and easy online process
  • $100 Loan Experience Guarantee¹

Pros

pros iconNo origination or prepayment fees

pros iconOffers large loans up to $100,000

pros iconA division of the reputable SunTrust Bank—one of the nation’s top financial services companies

pros iconYou can receive funds as quickly as the same day you apply (conditions apply)

Cons

cons iconLightStream does not offer pre-approval with a soft credit check

cons iconCaters to those with good credit

LightStream is a part of Truist Bank. While most correspondence will come from LightStream, you might notice the name Truist on certain communications from us. We continue to serve customers across all 50 states, and you do not need to be an existing customer to qualify for a LightStream loan.

Your loan terms, including APR, may differ based on loan purpose, amount, term length, and credit profile. The lowest rates require excellent credit. At least 22% of approved applicants applying for the lowest rate qualified for the lowest rate available based on data from 07/01/2022 to 09/30/2022.

Rate is quoted with an AutoPay discount. AutoPay discount is only available before loan funding. Rates without AutoPay are 0.50% points higher. Subject to credit approval. Conditions and limitations apply. Advertised rates and terms are subject to change without notice. Payment example: Monthly payments for a $10,000 loan at 4.99% APR with a term of 3 years would result in 36 monthly payments of $299.66.

  • $5K-$100K Loan Amount
  • 660 Min Credit
  • 1 Days Funding Time
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Key Facts

  • Multiple types of funding, nationwide
  • Get help from a loan representative
  • Highly rated customer support

Pros

pros iconEasy way to compare business loans from over 35 lenders

pros iconPartners with large, established lenders such as Bluevine, OnDeck, and Funding Circle

pros iconLoan decisions are made quickly after an easy application process

Cons

cons iconNo transparency of loan terms readily available

cons iconLoan funding can take up to one week, which is longer than competitors

cons iconCollateral is required from some of BusinessLoans.com’s lending partners

BusinessLoans.com allows users to obtain information about certain loans, financial products, and services offered through third-party service providers and advertisers. BusinessLoans.com is not an agent or advisor to you or any other third party.

You acknowledge and agree that our website is solely an intermediary to connect users with service providers to obtain information about certain financial products and services. You acknowledge and agree that we are not a financial institution, credit card issuer, or other financial service provider and that any information or advice made available through the Services is for informational purposes only.

We do not, and will not, create any coverage or credit decision with any service provider that may be referred to you through our Services. We do not (i) validate the licensing, certification, or other qualifications of Service Providers that you may encounter through our Services, (ii) guarantee the terms or rates offered by any third party through or on our Services, or (iii) issue credit cards or any other financial products.

We are not responsible for the conduct or policies of the service providers. The terms and rates provided by any service provider will be subject to the applicable terms and conditions of the products and services offered by the service providers.

  • $5K-$3M Loan Amount
  • 640 Min Credit
  • 24 Hours Funding Time
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Key Facts

  • Credit Score: 570
  • Age of business: 6 months
  • Monthly revenue: $20,000
  • Origination fee: 3%

Pros

pros iconSuccessful applications receive funding in less than 72 hours

pros iconDiscounts available for early repayment of loans

pros iconLow credit threshold for loan eligibility

pros iconGood customer service and A+ BBB rating

Cons

cons iconUses factor rating instead of APR, which makes comparing with other loan offers difficult

cons iconOnly short-term loans are available

Fora Financial provides business capital, including business loans and Revenue Based Financing, directly and through a network of unaffiliated third-party funding providers. Business loans are offered by Fora Financial Business Loans LLC or, in California, by Fora Financial West LLC, a licensed California Finance Lender, License No. 603J080. Fora Financial Advance LLC offers Revenue Based Financing. Business capital is also made available through US Business Funding, a sister company of Fora Financial. The products and amounts offered vary by state.

  • $5K-$1.5M Loan Amount
  • 570 Min Credit
  • 72 Hours Funding Time
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Key Facts

  • Credit Score: 650
  • Age of business: 1 Year
  • Monthly revenue: $25,000
  • Origination fee: 0-2%

Pros

pros iconQuick approval time

pros iconFast time to funding

pros iconGood track record

pros iconFlexible repayment options

Cons

cons iconNo transparency on rates

cons iconAdditional fees sometimes necessary

Any applications submitted electronically shall have the same force and effect as if the application bore an inked original signature(s). The above information, together with any accompanying financial statements, schedules, or other materials, is submitted for the purpose of obtaining credit and is warranted to be true, correct, and complete.

 To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each person and business that seeks a business loan. What this means for you: When you apply for a loan, we will ask for your business name, address, and Tax Identification Number. We will also ask for your name, address, date of birth, and other information that will allow us to identify you. We may also ask to see your driver’s license or other identifying documents.

  • $10K-$500K Loan Amount
  • 650 Min Credit
  • 24 Hours Funding Time

Top Startup Business Loan Providers

600

Min Credit Score

Min 5.99%

APR. Fixed Rate

5.99-35.99%

APR. Variable Rate

$1K-$100K

Loan Amount

24 - 84

Repayment terms

Yes

Soft Credit Pull

Marketplace

Lender Type

None

Other Fees

None

Origination Fee

None

Prepayment Fee

$10K

Annual Revenue

New

Time in Business

Pros & Cons

drop-down-btn
  • con-icon Two minute application process
  • con-icon No hard credit check for prequalified rates
  • con-icon Not available in New York and Hawaii
  • con-icon BBA rating of 1.27 stars out of 5

660

Min Credit Score

Min 7.49%

APR. Fixed Rate

$5K-$100K

Loan Amount

2-7 years

Repayment terms

No

Soft Credit Pull

Direct

Lender Type

None

Other Fees

None

Origination Fee

None

Prepayment Fee

1 Days

Funding Time

$10K

Annual Revenue

New

Time in Business

Pros & Cons

drop-down-btn
  • con-icon No origination or prepayment fees
  • con-icon Offers large loans up to $100,000
  • con-icon A division of the reputable SunTrust Bank—one of the nation’s top financial services companies
  • con-icon You can receive funds as quickly as the same day you apply (conditions apply)
  • con-icon LightStream does not offer pre-approval with a soft credit check
  • con-icon Caters to those with good credit

Business Loan Types

drop-down-btn
  • Business Term Loan

640

Min Credit Score

Min 9%

APR. Fixed Rate

$5K-$3M

Loan Amount

1-20 years

Repayment terms

Yes

Soft Credit Pull

Marketplace

Lender Type

None

Other Fees

None

Origination Fee

None

Prepayment Fee

24 Hours

Funding Time

$240K

Annual Revenue

12+ Months

Time in Business

Pros & Cons

drop-down-btn
  • con-icon Easy way to compare business loans from over 35 lenders
  • con-icon Partners with large, established lenders such as Bluevine, OnDeck, and Funding Circle
  • con-icon Loan decisions are made quickly after an easy application process
  • con-icon No transparency of loan terms readily available
  • con-icon Loan funding can take up to one week, which is longer than competitors
  • con-icon Collateral is required from some of BusinessLoans.com’s lending partners

Business Loan Types

drop-down-btn
  • Business Line of Credit
  • Business Term Loan
  • Term loans
  • Short-Term Business Loan
  • Merchant Cash Advances

What are Startup Loans?

Startup business loans are a type of secured or unsecured fixed-rate loan that is used to finance startup costs and expenses. The most common type of startup loan is an installment loan with one-year to five-year payment terms. Interest rates are determined by the creditworthiness of the borrower and the current prime rate offered by the lender.

Types of Startup Loans

The traditional startup loans described above are just one option for funding a new business venture. There are lenders outside of local banks and credit unions that can provide startup financing. Online term loans, short-term loans, and asset-based financing can keep a company afloat during those tumultuous early days. Here are some examples of what to look for: 

SBA Microloans

The microloan program from the Small Business Administration (SBA) was designed to help small businesses and certain not-for-profit childcare centers get off the ground. Through intermediate lenders, the SBA offers short-term loans of up to $50,000 which can be used for working capital, inventory, supplies, furniture, fixtures, machinery, or equipment.

Asset-based Financing

Asset-based financing is a broad term used to describe secured loans. Startup founders and owners don’t always have the credit score or history necessary to qualify for unsecured loans, so they put up an asset like property or equipment to secure the loan. This mitigates risk for the lender and gives the borrower more runway to make their business profitable. 

Short-term loans

Short-term loans are loans with payment terms of less than one year. They can be unsecured if the borrower has a good credit score or is secured by property or equipment. A common example of the latter is a title loan, where the borrower can use the title of a vehicle or real estate holdings as collateral. These loans usually come with high-interest rates and fees. 

Peer-to-peer lending

Peer-to-peer lending (P2P) is popular with first-time business owners looking for start-up business funding. Also known as “crowdfunding,” P2P cuts out the bank as a middleman, connecting the borrower directly to a private lender. There are several online P2P lending platforms, including Kickstarter, iFundWomen, GoFundMe, and Fundable. 

Equipment financing

Lenders treat equipment financing differently than traditional loans. That’s because the funds are used to purchase a physical asset that adds value to the borrower’s business. Equipment loans are common in the manufacturing and farming sectors, but they can be used by any business for items like office furniture, medical equipment, commercial ovens, and more.

Invoice factoring

Accounts receivables show up as an asset on the company’s balance sheet for a reason. They have value. Many lenders recognize this and will issue a loan based on the total amount the company has in accounts receivable. This is known as “factoring.” Some business owners describe it as “selling their invoices” for a percentage of what they’re worth. 

Merchant cash advances

Merchant cash advances are like invoice factoring because the loan amount is a percentage of revenue that has not come in yet. The lender sets the loan limits by tallying up the previous month’s credit card receipts and offering an “advance” based on projected credit card revenue for the upcoming month or months. This creates immediate cash flow for the business.

Comparing Startup Business Providers

There are several factors to consider when shopping for a startup business lender. The most obvious is affordability. Business owners should have a firm grasp on what their revenue is and how much they can afford to pay back each month. Doing the proper “due diligence” before applying for any type of funding will ensure those funds are an asset, not a liability. 

Established lenders with a track record of success are preferable to new lenders. Look for company reviews and complaints with the Better Business Bureau or other reporting agencies. The internet provides a “permanent record” on lenders that can help prospective borrowers identify which firms to do business with and who to stay away from. 

Once the choices have been weeded down to a “shortlist” of potential lenders, the next step is to look at average monthly revenue requirements. These vary by lender. Borrowers can often pare the list of potential lenders down when they get to this stage because some revenue requirements might be too high. It’s best to check this before applying. 

Collateral may also be an issue. Business owners with lower credit scores might be required to post some type of security for approval. This is usually explained in the terms and conditions published on the lender’s website. Applicants can also look for the terms “secured” and “unsecured” in the loan description. The former means that collateral will be required.     

Last but certainly not least, most lenders have credit score requirements. Some may put less emphasis on credit score, but there’s always a minimum number that they need to approve a loan application. The lowest is usually 500. Borrowers should check their credit scores before embarking on this journey. This can be done for free at FreeCreditScore.com.