A closer look at our top startup business loans
Taycor Financial equipment financing and working capital: 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.
Why Taycor Financial is the best for large business loans: Taycor offers up to $5 million in funding for equipment loans and $2 million for working capital loans. Many online lenders only go as high as $500,000. You can get flexible payments either monthly, quarterly or semi-annually. And you won’t need to provide collateral for working capital loans up to $500,000.
Who Taycor Financial is good for: Startup businesses and businesses with lower credit scores that need a significant loan amount can consider Taycor Financial. The minimum personal credit score required is 550 for some products. It also has no time in business requirements for equipment financing and just three months for working capital. Those low limits aren’t a common sighting in the business loan world.
Fundbox line of credit: Best for fast funding
Overview: Founded in 2013, Fundbox offers working capital for small businesses, with loan amounts up to $150,000. The company doesn’t use traditional interest rates but instead an amortized weekly fee of 4.66 percent to 8.99 percent.
Why Fundbox is the best for fast funding: This fintech lender can approve applications in as little as three minutes, making it ideal if you need a fast business loan. You can conveniently draw funds from Fundbox’s app or online dashboard and transfer them to your bank account.
Who Fundbox is best for: Startups who need a small cash injection within a day or two could benefit from using Fundbox. It’s accepting of businesses with just six months’ experience and a fair 600 personal credit score. But it sticks with short payment terms of 12 or 24 weeks and raises the monthly fee with the longer term. You will need a business bank account to apply.
Lendzi: Best for loan variety
Overview: Lendzi helps small businesses find traditional and alternative financing with over 60 partners. They have over ten years of experience in the lending industry and have funded over $500 million in loans.
Why Lendzi is best for loan variety: Since Lendzi works with over 60 lending partners, applicants are likely to have multiple options when seeking financing, compared to working with a direct lender who may only offer one or two products. Some products Lendzi can match business owners with include term loans, SBA loans, lines of credit, merchant cash advances and equipment loans.
Who Lendzi is good for: Lendzi is a good option for business owners who want an easy way to see what financing options they qualify for without impacting their credit score. Startup business owners can struggle to find financing, especially with lower personal credit scores and annual revenue. With the wide network of partners, Lendzi states they can find business owners a match, regardless of credit score or other limiting factors.
OnDeck business loans: Best for fair credit
Overview: OnDeck is a direct online lender for business lines of credit and term loans. Small business owners can access between $5,000 and $250,000 with terms between 12 and 24 months. You can receive loan proceeds as soon as one business day.
Why OnDeck is the best for fair credit: You need a personal credit score of just 625 to qualify for business funding. The time in business and annual revenue requirements of one year and $100,000, respectively, are also relaxed compared to what you’ll find with traditional lenders. Plus, the maximum repayment period of 24 months is longer than you’ll find with many other online lenders that only go up to 18 months.
Who OnDeck is good for: This lender is ideal for small business owners with fair credit scores who’ve been operable for at least one year. It’s also an attractive option if you seek a short-term financing solution with fast funding times. You'll need a business checking account to qualify for a loan or line of credit.
Funderial small business loans: Best for alternative financing
Overview: Funderial is a direct lender of business loans and a loan marketplace with 40 partner lenders. Since opening its doors in 2010, Funderial has funded $2 billion in business loans to over 20,000 business owners.
Why Funderial is best for alternative financing: This fintech lender offers revenue-based financing in addition to more traditional lending products. While online lenders often offer some type of alternative financing, Funderial’s large partner network ensures you find the right terms and financing amount for your business. By submitting an application, you can see exactly what you qualify for and compare rates and terms across multiple lenders.
Who Funderial is good for: Funderial works well for business owners who don’t have a stellar credit history or are running brand-new startups. The lender accepts personal credit scores as low as 500, and you need just two months in business. That said, if you have a low personal credit score and are a newer business, you likely won’t qualify for all types of available financing. You’ll need to talk with a loan specialist to understand what your business qualifies for.
Kiva microloan: Best for community support
Overview: Kiva is an international nonprofit founded in 2005 in San Francisco. It’s 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 and a unique crowdfunding model.
Why Kiva is the best for community support: Kiva states that 4.9 million people globally have raised over $2 billion on Kiva. After you apply and are approved, your first step is to invite people from your personal network to contribute for 15 days. Once you reach the required number, usually between five and 35 people, you can submit the loan to the broader platform for investors to continue funding.
Who Kiva is best for: Kiva is a solid option for businesses with poor or limited credit history but high visibility and grassroots support. The platform requires no credit check, but you do need a support network of friends and family willing to help.
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 microloans from $5,000 to $250,000, along with educational resources and mentoring services to help move their companies forward. You’ll get a loan term of 12, 24, 36 or 60 months.
Why Accion Opportunity Fund is best for underserved communities: Accion offers easy approval startup business loans, especially compared to other lenders. The fintech lender recently updated its lending criteria, stating that you need at least 12 months in business and a low annual revenue of $50,000. Its minimum personal credit score isn’t disclosed, but Accion is known for looking beyond your credit score to determine if you’re a good fit for a microloan.
Who Accion Opportunity is good for: Accion is good for minority and low– or moderate-income business owners who struggle to get approved elsewhere. The website states more than 90 percent of the clients the fund serves fall into these categories or are women-owned businesses.
Types of startup 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 2023 fiscal year, over $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 can be a good choice for startup businesses needing larger purchases. These loans allow for borrowing a lump sum that can be paid back in installments over longer terms.
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.
Microloans
Microloans are small loans meant to help a business get off the ground. Interest rates tend to be lower, but microloans might not be a good option if you need more than $50,000. These loans are usually thought of as SBA microloans. But nonprofits, alternative and traditional lenders may offer specialty loans or programs with small loans, typically to help disadvantaged businesses.
Business lines of credit
Business lines of credit include set credit limits and draw periods. You can borrow, pay back the loan and then borrow again during the draw period.
One plus: You can take out what you need in credit limits while only paying interest on what you borrow. It can also help businesses that make frequent purchases.
Equipment financing
This is financing for any technology or equipment you may need. Equipment financing could be anything from a computer system to manufacturing equipment. These loans offer competitive interest rates, and the loan amount is set to cover the equipment you need.
However, they tend to be secured by the property you buy, so 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 most 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.
Invoice financing works more like a traditional loan. In this case, the invoices serve as collateral for a traditional loan.
Crowdfunding
Crowdfunding campaigns don’t have to be repaid, so they are popular among many startups. This type of funding involves obtaining business capital by gathering small contributions from many different backers through an online crowdfunding platform.
While these contributions are sometimes donated, contributors may also offer their investments in exchange for company equity or other rewards. This is different than a loan from Kiva, which must be repaid.