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Best startup business loans February 2023

Feb 02, 2023
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Compare the best startup business loans in February 2023

LENDER AND LOAN TYPE BEST FOR MIN. FICO CREDIT SCORE LOAN AMOUNT MIN. TIME IN BUSINESS
Credibly small business line of credit Line of credit 600 Up to $300,000 6 months
Triton Capital equipment loan Equipment loans 600 $10,000-$500,000 Startups eligible
Fora Financial Revenue Advance Working capital 500 $5,000-$1.4 million 3 months
Kiva microloan Community support Not applicable Up to $15,000 Not disclosed
Fundbox line of credit Fast funding 600 $1,000-$150,000 6 months

Credibly small business line of credit: Best for line of credit

Minimum FICO credit score
600
Minimum annual revenue
$180,000
Minimum time in business
6 months
Interest rates from
Not disclosed
Loan amount
Up to $300,000
Term lengths
Not applicable

 

Overview: Credibly is focused on small and medium-sized businesses. Businesses may be funded in as little as 24 hours following approval. Credibly offers both secured and unsecured line of credit options. Though Credibly's minimum annual revenue is on the higher end at $180,000, its maximum loan amount is also on the high end at $300,000. The lender does not have set term lengths, since this is a revolving line of credit. Business owners are free to draw and pay interest on only what they use. Credibly offers both secured and unsecured options.

Why Credibly is the best for bad credit: Credibly has a minimum credit score of only 600. The company doesn’t just look at credit scores, but also weighs other data like bank statement information.    

Pros

  • Prequalification tool
  • Considers factors beyond credit score
  • High maximum loan amount

Cons

  • May require an origination fee 
  • Credibly does not disclose its interest rates
  • $180,000 minimum annual revenue

Triton Capital equipment loan: Best for equipment loans 

Minimum credit score
600
Minimum annual revenue
$350,000
Minimum time in business
Startups eligible
APR from
5.99%-24.99%
Loan amount
$10,000-$500,000
Term lengths
12-60 months

 

Overview: Triton Capital states to have helped thousands of businesses in over 175 industries acquire needed equipment. The application is online and business owners can apply in 60 seconds. This loan helps businesses to access funds for large-scale equipment and technology, so the annual revenue requirement is higher, at $350,000. The required credit score of 600 is also on the higher side compared to other featured lenders. 

Why Triton Capital is the best for equipment loans: Triton has a large loan amount range of $10,000 to $500,000, so it’s a good option that could fund anything from a point-of-sale system to larger-scale manufacturing equipment. Though Triton Capital doesn’t state a minimum time in business, a representative told Bankrate that the company is “typically able to offer equipment loans to startup businesses” — a rarity for this type of loan.

Pros:

  • Low minimum APR
  • Available in all states 
  • Quick application process 

Cons:

  • Documentation fee
  • Must have majority ownership of business to apply 
  • High minimum annual revenue at $350,000

Fora Financial small business loan: Best for working capital 

Minimum credit score
500
Minimum annual revenue
$144,000 in gross sales
Minimum time in business
3 months
Factor rate from
1.15-1.40
Loan amount
$5,000-$1.4 million
Term lengths
Variable

 

Overview: Fora Financial started in 2008 as Paramount Merchant Funding. A key feature of the revenue advance is the low credit score needed. However, businesses need $144,000 in gross sales annually to access the funding (or $12,000 monthly). 

Revenue advances allow you borrow within the loan amount range against future revenue. Terms on the loan are variable. Payback works as a fixed percentage of daily or weekly receipts. You can also increase the amount borrowed after you pay back 60% of the original loan.  

Why Fora Financial is the best for working capital: A standout feature is the wide range for the loan amount, going from just $5,000 all the way up to $1.4 million. According to Fora, the amount businesses receive depends on their revenue and other details. This can be a good loan option for a business owner with big plans to expand. You also only need to be in business for three months. 

Pros:

  • Wide loan range of $5,000 to $1.4 million 
  • Payments based on daily or weekly receipts  
  • No collateral needed

Cons:

  • Fees
  • High gross sale amount of $12,000 monthly
  • Uses factor rate, so repaying your loan early doesn’t save you money

Kiva microloan: Best for community support

 
Minimum credit score
Not applicable
Minimum annual revenue
Not applicable
Minimum time in business
Not disclosed
Interest rates from
Not applicable
Loan amount
Up to $15,000
Term lengths
36 months
 
Overview: Kiva is an international nonprofit founded in 2005 in San Francisco. Its website states that 1.7 billion people around the world don’t have access to a bank. To serve those entrepreneurs, Kiva offers zero-interest loans for up to $15,000 comes in with an unusual crowdfunding model.
 
Why Kiva is the best for community support: Kiva, a nonprofit, states that 2.5 million people globally have raised over $1 billion on Kiva. Because Kiva requires no credit check, this could be a good option for businesses with poor or limited credit history but high visibility and grassroots support.

Pros:

  • Zero percent interest on up to $15,000  
  • Helps impoverished communities access capital

Cons:

  • Not a traditional loan
  • Getting funds can take weeks and is based on fundraising  

Fundbox line of credit: Best for fast funding

Minimum credit score
600
Minimum annual revenue
$100,000
Minimum time in business
6 months
Weekly fee from
4.66% (12-week terms) or 8.99% (24-week terms)
Loan amount
$1,000-$150,000
Term lengths
12 or 24 weeks

 

Overview: Fundbox has been around since 2013. It operates as an embedded working capital platform for small businesses. Loan amounts range from $1,000 to $150,000, making it a good source for a possible microloan. The company does not use traditional interest rates, and instead relies on an amortized weekly fee. Fees start at 4.66% per week for 12-week terms and 8.99% for 24-week terms. This loan from Fundbox is also unsecured.

Why Fundbox is the best for fast funding: The application is online and approval can come in as little as three minutes. You can apply and draw funds from Fundbox’s app. The time to funds is also listed as soon as the next business day.

Pros:

  • Fast funds 
  • Fairly wide range of loan amounts 
  • Unsecured option

Cons:

  • Minimum annual revenue is somewhat high at $100,000 
  • Non-sufficient funds fee  
  • Weekly fee instead of interest makes rate comparison hard

The Bankrate guide to choosing the best business loan for startups

Looking for the best startup business loans can be a daunting process, since there are so many lenders, rates and loan types. Few banks work with startups — instead, funds are available through nontraditional lenders and even crowdfunding platforms. We’ve created this page to make finding some of the top business loans for startups easier. 

We picked the best loans for businesses under a year old based on loan amounts, terms and the minimum credit score to obtain the loan, as well as other features that might make them attractive to startups. Read on for information about the kinds of business loans available and advice on how to choose the best lender.

What is a startup business loan?

A startup business loan helps newer businesses with little or no credit history access financing. The lenders who provide these loans may have lower credit rating requirements, if they have credit requirements at all. Many look at financial health indicators beyond credit scores, such as gross sales or recent bank statements.

Types of startup business loan

You have a few options for small business lender types. The most traditional lender is a bank or credit union. But banks may have more stringent requirements, like higher credit scores or the requirement of being in business longer. Approval may also take longer. However, you can often go into a physical office and ask questions or do in-person transactions with a traditional bank.

The other main option is to go through an online lender. These services often have apps for managing your loans. These lenders are geared for faster and easier approval than a bank. Because of these features, online lenders can be a more convenient option for small businesses and startups. Research the lender’s legitimacy before applying, though.

There are eight main types of traditional business loans. Types that may interest startups include: 

  • Line 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 technology and equipment you may need. It 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.     
  • Microloan: 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.
  • SBA loans: This popular loan type is backed by the Small Business Administration. These loans come in various subtypes based on your needs, like microloans or real estate purchases. However, they’re more difficult to get approved for, and the application process can take longer than other small business loan types.

How to choose the best startup business lender

1. Start by comparing the different types of loans and see which one matches your situation. For instance, if you’re starting a small upcycling business, a microloan might be the best option. Also, compare how easy each loan type is to get, what credit requirements tend to be and what interest rates might be for each one. That might limit what you can apply for.
 
2. Next, assemble a list of lenders that handle the type of loan you decide on. You might search online to find online lenders or talk to your local banking branches to see if they offer the type of loan you are looking for. Narrow your list based on whether you meet each lender’s publicly listed loan requirements.
 
3. If your chosen lender or lenders offer preapproval or prequalification, apply that way to avoid a credit score hit. Otherwise, apply as usual — but keep applications to a 14-day period to minimize the damage a hard inquiry does to your FICO score. You’ll be able to see the loan interest rates, terms and amounts for which you qualify.
 
4. Pick the lender that offers you the terms and rates you find most appealing.
 

FAQs about startup business loans

Methodology

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. Additionally, the featured lenders were evaluated for notable features such as niche loan offerings and funding speed.