Best Startup Business Loans

Total Rating	4.0
Rates & Fees3.6
Services3.4
Eligibility Requirements4.7
Application4.8
Sales & Advertising Transparency4.1
Customer Service3.9
User Reviews4.1

Pros

Borrower qualifications are lower than banks
Rates tend to be inexpensive
No prepayment penalties
Application process is generally fast and easy

Cons

Not available in all states
Low borrowing amounts

Why We Chose Upstart For Best Startup Funding For Young Entrepreneurs

Upstart serves a market that most lenders aren’t chomping at the bit to lend to: young adults who are starting a business. As such, Upstart doesn’t weigh credit history as heavily as many of its competitors. Instead, its underwriting process focuses on education, credentials, and work experience to make lending decisions.

Upstart Services

Upstart offers personal term loans from $1,000 to $50,000 with repayment terms of three or five years.

Upstart Rates & Fees

Upstart has fixed rates that range from 7.8% to 35.99%. An origination fee is typically required.

Upstart Eligibility Requirements

To qualify for a loan from Upstart, you must meet these requirements:

Be a US citizen that’s at least 18 years old (19 in Alabama and Nebraska)
Have a regular source of income
Have a bank account
No bankruptcies within the last 12 months
No public records within the last 12 months
No current delinquent accounts
Fewer than six inquiries within the last six months

Choose Upstart If...

You want to use your education, employment history, and other factors to get approved for a loan
You’re a very new business that doesn’t qualify for a traditional business loan

Get Started With Upstart

Accion: Best Startup Loans For Underserved Borrowers

Accion

Total Rating	3.8
Rates & Fees5.0
Services2.1
Eligibility Requirements4.1
Application3.5
Sales & Advertising Transparency4.8
Customer Service3.9
User Reviews3.2

Pros

Borrower qualifications are lower than banks
No prepayment penalty
Rates tend to be inexpensive

Cons

Not available in all states
Some additional fees are charged
Blanket lien required on loans over $50K

Why We Chose Accion Startup Loans For Underserved Borrowers

Accion is focused on funding businesses owned by underserved demographics, including women, minorities, and foreign-born business owners. Not only that, but it offers excellent rates and terms to those borrowers. While its geographical footprint is limited, Accion Opportunity Fund is a great resource for entrepreneurs who can access it.

Accion Services

Accion provides business owners with $5,000 to $250,000 with repayment terms of one to five years.

Accion Rates & Fees

Accion’s rates range from 8.49% to 24.99%. An origination fee of 3% to 5% of the loan amount applies.

Accion Eligibility Requirements

You must meet these minimum requirements to receive a loan From Accion:

At least 12 months in business
Annual revenue of $50,000+

There are no minimum credit score requirements. Accion Opportunity Fund loans are not available to borrowers in Montana, North Dakota, South Dakota, Tennessee, and Vermont.

Choose Accion Opportunity Fund If...

You’re part of an underserved demographic and can’t find funding elsewhere
You have credit challenges or have only been in business for one year and can’t get funded by traditional lenders

Get Started With Accion

Fundable: Best Crowdfunded Startup Loans

Fundable

Get Started With Fundable

Total Rating	4.0
Terms & Fees4.7
Project Qualifications4.4
Application Process2.8
Sales & Advertising Transparency4.4
Customer Service4.6
User Reviews3.7

Pros

Rewards and equity crowdfunding are both available
Low fees for successful campaigns
Good customer support
Prescreening of campaigns benefits backers

Cons

Flat monthly fee hurts unsuccessful campaigners
Rewards campaigns are all or nothing

Why We Chose Fundable For Best Crowdfunded Startup Loans

Entrepreneurs who are skilled at promotion can try their hand at crowdfunding their business instead. In that regard, Fundable is more business-focused than most other crowdfunding platforms, with the option to launch either a rewards-based campaign or an equity-based campaign.

Fundable offers self-managed campaigns, or you can get assistance through a guided fundraise.

Fundable Services

Fundable offers reward-based and equity-based crowdfunding campaigns with no set time limit.

Fundable Rates & Fees

Fundable charges $179/month for self-managed fundraising on its platform. Payment processing fees may also apply.

If you want a guided fundraise, you can contact Fundable for a custom quote.

Fundable Eligibilitu Requirements

To start a Fundable crowdfunding campaign, you must be 18 or older and be funding a type of business served by Fundable.

Fundable does have a list of prohibited projects, which includes things like adult-oriented material, credit services, regulated activites, and illegal products.

Choose Fundable If...

You want to provide rewards or equity to investors in exchange for startup capital
You’re prepared to put in the work required by a crowdfunding campaign to raise money for your new business

BusinessLoans.com: Best Marketplace For Startups

BusinessLoans.com

Get Started With BusinessLoans.com

Total Rating	4.0
Rates & Fees4.6
Services4.0
Eligibility Requirements4.1
Application3.0
Sales & Advertising Transparency3.6
Customer Service4.1
User Reviews4.4

Pros

High borrowing amounts
No minimum credit score
Fast and easy application

Cons

Funding can take awhile to disburse
Brand new businesses less likely to qualify

Why We Chose BusinessLoans.com As Best Marketplace For Startups

BusinessLoans.com is a convenient and versatile loan aggregator. When you apply, your application will be matched with one or more of BusinessLoans.com's partnered lenders. It’s a good way to cover a lot of ground with minimal effort.

While the company prefers applicants who have been in business for at least 6 months and have $100,000 in annual revenue, it will still try to place customers who don’t hit those benchmarks.

BusinessLoans.com Services

BusinessLoans.com offers term loans, short term loans, lines of credit, and merchant cash advances. Term lengths and borrowing amounts vary by lender.

BusinessLoans.com Rates & Fees

BusinessLoans.com rates and fees vary by lender.

BusinessLoans.com Eligibility Requirements

These are the preferred requirements for getting funding through BusinessLoans.com:

At least 6 months in business
Annual business revenue of at least $100,000

Choose BusinessLoans.com If...

You want to easily compare loan offers from a variety of lenders
You’re unsure of what funding you qualify for and would like to explore your options

Discover Personal Loans: Best Startup Loans For Borrowers With Good Credit

Discover Personal Loans

Get Started With Discover Personal Loans

Total Rating	4.4
Rates & Fees5.0
Services3.6
Eligibility Requirements4.5
Application4.5
Sales & Advertising Transparency5.0
Customer Service3.8
User Reviews3.6

Pros

No extra fees
No prepayment penalties
Funds are disbursed quickly

Cons

Borrower qualifications might be hard to meet
Low borrowing amounts

Why We Chose Discover Personal Loans For Borrowers With Good Credit

Though originally conceived as a lower-cost way to pay down debt, Discover’s personal loans are a cost-effective way to borrow small amounts of money for a variety of purposes, including funding a business startup.

The borrower qualifications are on the high side, but successful applicants will get good rates, fast approval, and no additional fees.

Discover Personal Loans Services

Discover offers personal loans up to $40,000 with terms of three to seven years.

Discover Personal Loans Rates & Fees

Discover Personal Loans have rates that range from 7.99% to 24.99%.

Discover Personal Loans Eligibility Requirements

Borrowers must meet the following requirements to get a personal loan through Discover:

A personal credit score of at least 660
A minimum household income of $25,000

Choose Discover Personal Loans If...

You have a good credit score and want a long-term loan with competitive rates
You own a new business with no business credit history and would like to receive a personal loan

LendingClub Personal Loans: Best Startup Loans For Building Credit

LendingClub Personal Loans

Get Started With LendingClub Personal Loans

Total Rating	4.0
Rates & Fees4.6
Services2.2
Eligibility Requirements5.0
Application4.5
Sales & Advertising Transparency3.4
Customer Service3.7
User Reviews4.2

Pros

Fast and easy application
Funds are disbursed quickly
Builds personal credit

Cons

Low borrowing amounts
Rates can be expensive

Why We Chose LendingClub For Building Credit

While LendingClub does deal in business loans, startups are more likely to qualify for a personal loan, which they can then use for business purposes.

LendingClub isn’t the cheapest out there, but its lenient borrower requirements and broad availability make it a good fallback option if you’ve had a hard time qualifying elsewhere. LendingClub also reports on-time payments to credit agencies, making it a good option for building credit.

LendingClub Services

LendingClub offers personal loans up to $40,000 with terms of two to five years.

LendingClub Rates & Fees

LendingClub personal loans have rates that range from 8.98% to 35.99%. An origination fee of 3% to 8% of the loan amount applies.

LendingClub Eligibility Requirements

LendingClub does not have any specific credit score requirements, but you’ll need to have a verifiable bank account to apply.

Choose LendingClub If...

You want to build your personal credit score to qualify for better options in the future
You want a fast and easy personal loan that can be used for business expenses

Business Loan & Funding Products Review Methodology

We spend hours researching and evaluating each business loan and funding product that we review at Merchant Maverick, placing special emphasis on key characteristics to generate our ratings.

Weighted Rating Breakdown

Rates & Fees 20%

Services 20%

Eligibility Requirements 20%

Application 15%

Sales & Advertising Transparency 10%

Customer Service 10%

User Reviews 5%

When rating lenders and funding providers, we use a 31-point rubric that looks at rates and fees, services, eligibility requirements, application, sales and advertising transparency, customer service, and user reviews. We weigh each section differently to calculate the total star rating. This rubric is applied to traditional term loans, as well as short-term loans, start-up loans, lines of credit, online lending products, merchant cash advances, and equipment financing products.

Rates & Fees: 20% of the total star rating
Services: 20% of the total star rating
Eligibility Requirements: 20% of the total star rating
Application: 15% of the total star rating
Sales & Advertising Transparency: 10% of the total star rating
Customer Support: 5% of the total star rating
User Reviews: 5% of the total star rating

Each section is further broken down into granular, weighted subsections, in which we examine specific attributes like terms lengths, conditions of repayment, credit score and revenue requirements, ease of application, length of time to funding, the ethics involved in promoting the lending product, customer support, and the overall reputation of the lender or funding provider.

Read more about how we rate small business lenders.

Types Of Startup Business Loans

The lenders we selected offer a few different types of business loans. These include:

Term loans: Term loans can be personal loans or business loans. They typically have longer repayment terms and lower interest rates, making them ideal for startups.
Microloan: Essentially, a small business microloan is a term loan for less than $50,000. These are often easier to get and have better rates than larger-term loans, making them ideal for startups.
Short-term loans: These have flat fees and repayment terms usually under 18 months. With short-term loans, payments are made daily or weekly. Short-term loans are generally not a good fit for brand-new businesses but may work for those that have been in business for a few months and are generating revenue.
Crowdfunding: Generally, crowdfunding for business has low borrower requirements and costs but requires more legwork. It’s best for entrepreneurs who are good at generating publicity or donor interest.
Merchant cash advance: Like short-term loans, merchant cash advances are revenue-dependent. They tend to be expensive. MCAs may work for businesses that have been around a few months and do a lot of credit card sales.
Lines of credit: With a line of credit, you can establish a fund you can draw upon at will up to a credit limit. These may be challenging to get as a startup, but it can be an excellent choice if you don’t know exactly how much your expenses will be.

How To Choose The Best Startup Loan

The best startup loan for your business idea may not necessarily be the best startup loan for someone else’s. You’ll want to keep in mind the following factors when you’re looking:

The amount of money you need to borrow
Loan repayment time
How soon your revenue will come online
The total cost of borrowing (interest, fees, etc.)
Your personal credit score and credit history
Any collateral requirements
Your resources for running a crowdfunding campaign (if you choose to)

With all of these elements in mind, you’ll be able to pinpoint the best startup business loan for your needs.

FAQs: Startup Business Loans

Do banks give loans for startups?

Yes, it’s possible to get a startup loan from a bank provided you have the credit rating and, typically, collateral to cover the loan.

What credit score is needed for a startup business loan?

Credit scores for startup loans can vary greatly by lender. Not all startup loan lenders have minimum credit requirements, but you’ll have an easier time getting a startup loan if your credit score is 640 or higher.

Are loans good for startups?

Loans can be a great way to start a business provided you have the means to repay your loan on time. If you have limited resources, you may have been luck with crowdfunding or bootstrapping your business.

Is it harder for startups to get a business loan?

It can be harder for startups to qualify for business loans since many lenders want to that a business is profitable before they lend it money. One way to get around this Catch-22 is to use personal loans to finance the early stages of a business.

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Erica Seppala

Editor & Senior Staff Writer at Merchant Maverick

Erica began writing on small business topics in 2008. She joined Merchant Maverick in 2018 and focuses on loans, accounting, and POS. She is a Certified ProAdvisor for QuickBooks Online and QuickBooks Payroll. She has been cited in MSN, Reader's Digest, Vox, U.S. News & World Report, and Real Simple. She is a graduate of Limestone University and resides in Greenville, South Carolina.

View Erica Seppala's professional experience on LinkedIn.

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1. Upstart

❮ ❯

Personal loans
FICO: N/A
ARP: 7.8%+

2. Accion

❮ ❯

Terms loans
FICO: N/A
APR: 8.49%+

3. Fundable

❮ ❯

Crowdfunding campaigns
FICO: N/A
APR: N/A

4. BusinessLoans.com

❮ ❯

Term loans, short-term loans, lines of credit, merchant cash advances
FICO: N/A
APR: Varies by lender

5. Discover Personal Loans

❮ ❯

Personal loans
FICO: 660+
APR: 7.99%+

6. LendingClub Personal Loans

❮ ❯

Personal loans
FICO: N/A
APR: 6.95%+