Skip to Main Content

Best startup business loans in May 2025

 
Written by
Marlese Lessing
Edited by
Rob Watts
Reviewed by
Kenneth Chavis IV
Updated: April 22, 2025

What to know first: To help you sort through startup lenders, look at our top picks for the best startup business loans along with advice to help you find the most affordable loan for your business.

Find my rate

Get started on funding your business today

SMB Logo

Answer a few questions and get matched with trusted financing solutions from our sponsored partner.

|
Taycor Financial: Bankrate 2025 Award Winner Best Lender for newer businesses
4.4
Bankrate Review
Loan amount
$500-$5M
Term: 4 - 60 months
Interest rate
Factor rate from 1.10 - 1.36
Fastest funding
1 business day
Apply nowArrow Right

on BusinessLoans.com

Fundbox: Best for fast funding

4.3
Bankrate Review
Loan amount
$1k-$150K
Term: 3 - 6 months
Interest rate
Starting at 4.66%
Fastest funding
1 business day
Apply nowArrow Right

on BusinessLoans.com

Kiva: Best for community support

4.3
Bankrate Review
Loan amount
$1k–$15k
Term: 1 - 36 months
Interest rate
N/A
Fastest funding
5 business days
Accion Opportunity Fund: Bankrate 2025 Award Winner Best CDFI for small business loans
4.1
Bankrate Review
Loan amount
$5k-$250K
Term: 12 - 60 months
Interest rate
8.49- 24.99%
Fastest funding
Not disclosed

Lendzi: Best for loan variety

4.3
Bankrate Review
Loan amount
$5k-$5M
Term: 3 - 15 months
Interest rate
1.1 - 1.5 factor rate
Fastest funding
1 business day
Apply nowArrow Right

on BusinessLoans.com

OnDeck: Bankrate 2025 Award Winner Best lender for startups
4.5
Bankrate Review
Loan amount
$5k-$250K
Term: 3 - 24 months
Interest rate
Starting at 29.90% APR
Fastest funding
1 business day
Apply nowArrow Right

on BusinessLoans.com

On This Page

A closer look at our top startup business loans

Taycor Financial: Best for large business loans

Overview: A nationwide lender, Taycor Financial offers many business loan options, including equipment financing, term loans, lines of credit and working capital. The online lender also offers equipment leasing if you can’t buy equipment outright. Its online application is simple with no tax returns required to apply for loans under $400,000. If you’re just starting out as a business, you can get a business loan with just a 550 credit score and three months in business. You do, however, need to have at least $96,000 in revenue. 

 

Fundbox: Best for fast funding

Overview: Fundbox is a fintech lender that focuses solely on business lines of credit up to $150,000. You can draw from your credit line at any time through your online account or its handy app. But keep its fees in mind — it charges an amortized weekly fee of 4.66 percent to 8.99 percent, depending on whether it’s a 12- or 24-week term. You will also need a business bank account with a minimum of three months of transaction history to apply.

Lendzi: Best for loan variety

Overview:  Lendzi helps small businesses find traditional and alternative financing by matching you with lenders from its pool of more than 60 lending partners. You can apply with Lendzi through a single application and see which lenders provide you with the best loan terms. Plus, you won’t take a hit to your credit score, making the initial process a no-brainer.

OnDeck: Best for fair credit

Overview: OnDeck is a direct online lender specializing in business lines of credit and term loans. Small business owners can access between $5,000 and $250,000 for term loans with repayment terms of up to 24 months. If you apply for term loans early in the day, you may be eligible to receive same-day funding. OnDeck’s lines of credit offer $6,000 to $100,000 with repayment terms of 12, 18 or 24 months. Once you open a line of credit, you can draw from it and receive up to $10,000 in funding instantly.

Kiva microloan: Best for community support

Overview: Kiva is an international nonprofit on a mission to help entrepreneurs who normally don’t have access to loan opportunities. To serve those entrepreneurs, Kiva offers zero-interest loans for up to $15,000 with no collateral requirements and a unique crowdfunding model. It also requires no credit check, helping people who either have no credit or impaired credit get a business loan. Kiva’s model is a unique way to build the community supporting your business and help it grow through crowdfunding.

Accion Opportunity Fund business loans: Best for underserved communities

Overview: Operating as a nonprofit in conjunction with American Express, Accion Opportunity Fund prides itself on creating social equality in the lending space. Underserved small business owners can access working capital and equipment loans from $5,000 to $250,000, along with educational resources and mentoring services to move their companies forward. You’ll get a loan term between 12 and 60 months.

What is a startup business loan?

A startup business loan helps newer businesses with little or no credit history, revenue or time in business access financing. These loans are designed to help business owners get the funding to start a business from the ground up, getting them financing for inventory, equipment and otherwise. 

Unlike traditional business loans, the lenders who provide these loans may have lower credit rating requirements, if they have credit requirements at all, along with lower revenue and time in business requirements. 

Since the loans they take on tend to be higher risk, lenders will often look to other financial health indicators beyond credit scores, such as gross sales or recent bank statements. 

If your business doesn’t meet the revenue requirements, then you may have to sign a personal guarantee, which makes the business owner responsible for the debt if the business defaults, or back the loan with collateral such as business or personal assets. Lenders may also ask for higher interest rates on small business startup loans. 

If you go with an SBA startup loan, you typically get more favorable rates and terms compared to traditional loans. SBA loan rates can’t exceed a limit set by the government, while other loans don’t have the same ceiling. However, SBA loans can be more competitive and have a longer approval time, so be sure to have multiple options. 

How do startup business loans work?

Small business startup loans are like any other business loan — just made available to startups. You’ll apply, receive a lending decision, get your funds and repay them over time, plus interest.

One key difference is the amount of money you can receive and the requirements you may have to meet. Due to the added risk startup businesses pose to lenders, maximum amounts tend to be smaller than they are for well-established businesses. According to the 2024 Small Business Credit Survey, 30 percent of firms less than two years old sought lending under $25,000.  Some businesses may only see business loan amounts of $100,000 or less. Even with lenders advertising higher limits, don’t expect to qualify for the maximum advertised amount. 

Funding timelines for startup loans are similar to other business loans, usually a few days to a few weeks depending on the lender. SBA loans can take up to 90 days to receive because there is an additional underwriting process.

In addition to the usual documentation, such as pay stubs, revenue reports and proof of financial stability, lenders may have additional documentation requirements for startup loans. 

Many lenders ask startups to provide a comprehensive business plan to explain how they will use the money and to assess how much revenue the business expects to bring in. With startup loans, your lender will want to know how financially feasible your business is, as well as how much experience you have in the industry. Having a detailed business plan or a compelling loan pitch can help you make your case to a lender and improve your chances of approval. 

Finally, some lenders may require you back your loan with personal or business collateral, put down a heftier deposit or sign a personal guarantee.

Requirements for startup business loans

The exact requirements for a startup business loan will vary depending on the lender, but most will require:

  • A minimum personal credit score (good or excellent credit will increase your chances of approval) of 600 to 700
  • Minimum annual revenue of $50,000 to $100,000
  • Minimum amount of time in business of three months to a year
  • A personal guarantee, collateral or cosigner to mitigate the risk to the lender
  • Operating in an approved industry, as lenders often won’t lend for businesses in a high-risk industries

Pros and cons of startup loans

There are benefits and potential pitfalls to using small business startup loans to fund business operations. 

 

Pros

  • Fast cash: Many online lenders have quick online applications and fast turnaround times for receiving cash, such as funding within 24 to 48 hours.  
  • Business growth: Startup loans can provide much needed capital to buy equipment or fund payroll to get a business off the ground without having to give up equity. 
  • Credit building: Startups begin with little to no business credit score. A successful startup loan may make it easier to get additional funding later by establishing business credit.
  • Lower barriers to entry: Startup loans can have more relaxed requirements for revenue and time in business. 
 

Cons

  • Can be costly: Some startup loans have higher than average interest rates, adding to the cost of borrowing. Additionally, making daily or weekly payments on a loan can strain a startup's already-stretched finances. You’ll want to look at the total cost of borrowing to determine if a startup loan is worth it for your business.
  • Personal risk: Startup loans almost always ask for a personal guarantee, so new business owners are putting personal assets on the line.
  • Limited options: Finding the right lender may be difficult for startup businesses, as lenders typically have strict eligibility requirements and favor established businesses that are less risky to lend to.
  • Lower loan amounts: Lenders will often limit how much you can borrow if you have a low revenue amount or no time in business. 

Types of startup business loans

Most types of business loans are available to startups, so long as you can find a lender that will work with you. Types of startup business loans that may particularly interest you include:

SBA loans

SBA loans are backed by the U.S. Small Business Administration and are a popular choice thanks to their low interest rates and favorable repayment terms. For startups, SBA loans come in various subtypes based on your needs, like microloans or real estate purchases. Their benefit is that the SBA sets interest rates that lenders are allowed to charge at a maximum. 

While it can be tough to qualify for these loans, the SBA weekly lending report shows that it's possible for startups to qualify for funding. For example, for the 2024 fiscal year, $9.9 billion in SBA 7(a) loan funds have gone to startups — businesses that are new, younger than two years or businesses that have yet to open their business. 

Term loans

Term loans work well for businesses with an exact idea of how much funding they need. You can borrow the money in a lump sum and repay it over a specific period of time with interest and fees. Repayment terms can be long, such as five to 10 years, effectively lowering your repayments.

Working capital loans are another type of business startup loan. These loans are short-term and cover day-to-day operating expenses such as wages, inventory purchases and rent. 

Startups can often obtain term loans from traditional and online lenders. When using an online lender, the application process takes place entirely online and often has a faster funding timeline than with traditional lenders. Using a bank, on the other hand, can offer you more individual counseling on which lending option works best for your business and allows you to build a long-term business relationship with your lender. 

Microloans

Microloans are small loans meant to help a business get off the ground. Interest rates tend to be low such as 8 to 13 percent, but microloans might not be a good option if you need a large amount of funding. One of the more popular options are SBA microloans, which cap funding at $50,000. Nonprofits, alternative and traditional lenders may offer microloan programs, typically to help disadvantaged businesses.

Business lines of credit

Business lines of credit offer flexible access to funding that you can withdraw from time and time again, much like a business credit card. You get approved for a certain amount of funding called your credit limit. You can withdraw funds anytime during the draw period and borrow repeatedly up to the credit limit. You then repay the loan with interest charged only on the amount you withdraw. As you repay the loan, your credit limit refreshes, allowing you to borrow again in the future.

One advantage to a line of credit is that you can receive a higher credit limit than you need while only paying interest on what you borrow. It can also help businesses that make frequent purchases, since you can borrow from the credit line repeatedly up to the credit limit.

Equipment financing

This is financing for any technology or equipment you may need. Equipment financing can help you buy anything from a computer system to manufacturing equipment. These loans are secured by the equipment as collateral, making it a less risky type of loan for the lender. In return, lenders tend to offer competitive interest rates. However, you could lose that property if you default on the loan.

Invoice factoring or financing

Invoice factoring is a short-term alternative financing option for businesses that send customer invoices. This typically involves selling outstanding invoices to the factoring company, which pays up to 90 percent of the value of the invoice upfront. The factoring company then takes over the responsibility of collecting the balance due on the invoice from your client. 

The benefit of this form of borrowing is that it allows you to receive money from invoices upfront, quicker than waiting the typical 30 to 90 day timeline.

On the other hand, invoice financing works more like a traditional loan. In this case, the invoices serve as collateral for a traditional loan. You collect the invoices and pay back the lender fees once you receive payment from your clients.

The benefit of these forms of borrowing is that they allow you to receive money from invoices upfront, quicker than waiting the typical 30 to 90 day timeline that it takes your clients to pay. But you may pay weekly fees to the lender, regardless of when your client pays, and the fees could be more costly compared to other startup financing options.

Alternatives to startup loans

If a startup loan is not the right fit, there are other ways to get financing as a new business.


Where to get a startup business loan

You have a few options for getting business startup loans. When deciding which lender holds the most promise, consider the lender’s criteria for your business such as your credit score and time in business as well as other features the lender offers. For example, you may want to go with an online lender if you need fast funding. If you’re shopping for lending products or want to build a long-term relationship with a lender, on the other hand, a bank may be your best bet.  Bankrate can help you find the best lender to fit your needs. 

Lenders to choose from include:

  • Traditional banks: Banks are the most traditional lenders. They typically have more stringent requirements, including higher credit scores or time in business requirements. Building a relationship with a bank in advance — like opening a business checking account — may increase your odds of approval.
  • Online lenders: Online lenders are typically fin-tech companies. They are known for offering mobile or web applications for managing your loans. They also advertise easy applications and fast approvals, making online lenders a better option for small businesses and startups.
  • SBA lenders: Banks, credit unions and other lenders can offer SBA loans, which are loans backed by the U.S. Small Business Administration. If your lender isn't on the SBA's Preferred Lenders list, it can take longer for approval, such as 30 to 90 days. But SBA loans tend to offer low interest rates and long repayment terms, making them a favorable startup business loan option.
  • Community Development Financial Institution: A community development financial institution (CDFI) is an organization that focuses on providing financial services to low-income and underserved communities. CDFIs provide lending for those with poor or limited credit histories.
  • Minority Depository Institutions: A Minority Depository Institution is a financial institution where designated minorities own 51 percent or more of the voting stock or a majority of the institution’s board of directors are minorities. In addition, the community the institution serves is also predominantly minority. This could include Black-owned, Hispanic-owned or Indigenous-owned banks, for example.

To decide which type of lender holds the most promise, consider:

  • Your company’s time in business
  • Your credit score
  • Your business revenue
  • How fast your company needs money
  • The cost of borrowing
  • Other requirements the lender may have

Frequently asked questions about startup business loans

How we chose the best startup business loan lenders

Bankrate's trusted small business loan industry expertise

Read our full methodology

57

years in business

30

lenders reviewed

22

loan features weighed

770

data points collected

To choose the best startup business loans, we ensured all loans featured are broadly available across the United States and have a time in business requirement of six months or less. We then considered features that make loans affordable and accessible to businesses with different characteristics and needs, including interest rates, credit score requirements, minimum annual revenue and fees. 
 
When evaluating lenders, we use a 22-point scale to measure quality in five key areas: