Key takeaways
- Most lenders want 6 months to 2 years of history, so startups need specific programs.
- SBA 7(a) loans and SBA microloans can fund startups with a solid plan and some money down.
- Equipment financing is often the easiest first loan because the equipment secures it.
Startups can get funding, but usually not from the online lenders that require 6 to 12 months of bank statements. The most common routes are SBA 7(a) loans and SBA microloans (with a business plan and a down payment), equipment financing secured by what you buy, and loans backed by personal assets. Your personal credit and industry experience carry extra weight.
What lenders want from a startup
- Personal credit, often 680 or higher for SBA startup loans
- Money down, commonly around 10% or more of the total project
- Industry experience that shows you can run this kind of business
- A business plan with realistic projections and how the loan will be repaid
- Collateral when available, sometimes including personal assets
Startup funding options
| Option | Typical amount | Good for |
|---|---|---|
| SBA 7(a) loan | Up to $5M | Buying a business or franchise, larger build-outs |
| SBA microloan | Up to $50K | Small startups, inventory, equipment |
| Equipment financing | Based on equipment price | Trucks, machines, kitchen and medical equipment |
| Business credit cards | Smaller limits | Day-to-day costs, building business credit |
| Secured personal or home equity loans | Based on the asset | Owners with equity to borrow against |
Buying an existing business or franchise
Buying a business with a track record is often easier to finance than starting from zero, because the lender can review the seller’s cash flow. SBA 7(a) loans are widely used for acquisitions and franchise purchases. Expect to bring a down payment, and sometimes the seller carries a small note.
How to build toward bigger loans
- Open a business checking account on day one and run all revenue through it.
- Get an EIN and register with business credit bureaus.
- Keep clean monthly books from the start.
- Pay every vendor and card on time. At 6 to 12 months, many online lenders open up.
Frequently asked questions
Can I get a business loan with no money down?
Rarely for a startup. Equipment financing sometimes covers 100% with strong credit, but most startup programs expect the owner to invest some cash.
How long until I qualify for an online business loan?
Many online lenders start at 6 months to 1 year in business with steady deposits.
Do I need a business plan?
For SBA and bank startup loans, yes. Equipment and online lenders rarely ask for one.
Start with the right lender
Only some lenders fund startups, and they each have their own rules. Tell us where your business is today and we will match you with the vetted lender that fits. Get a Loan.