A closer look at our top startup business loans
Fora Financial revenue advance: Best for working capital
Overview: Started in 2008, Fora Financial has worked with over 35,000 small businesses. It’s known for accessible revenue advances and term loans with up to $1.4 million in funding.
Why Fora Financial is the best for working capital: Fora Financial offers flexible loan ranges from $5,000 to $1.4 million, ideal for covering a range of operating expenses. For its short-term loan, you can increase the amount borrowed after you pay back 60 percent of the original loan. And if you want to pay your loan off early, Fora offers prepayment discounts, offsetting the factor rate it charges. Most lenders that use factor rates don’t offer discounts for early repayment.
Who Fora Financial is best for: Fora Financial welcomes startups with healthy revenue of at least $144,000 per year. Its loans are also accessible to businesses with a subprime credit history, requiring a personal credit score of 600.
Credibly working capital loan: Best for bad credit
Overview: Credibly is a direct lender for working capital and merchant cash advance loans, and it also provides other loans through partners. Its direct loan options offer short terms up to 15 months with daily or weekly payments. And this online lender boasts fast funding within 24 hours.
Why Credibly is the best for bad credit: Credibly accepts minimum personal credit scores down to 550, a lower standard than other online lenders. The company also doesn’t just look at credit scores but also weighs other data like bank statement information. And unlike most business loans, Credibly’s loans don’t need a personal guarantee to back the loan with personal assets. Businesses that plan to repay early may benefit from a 20 percent discount on remaining fees charged, though conditions apply.
Who Credibly is good for: Businesses with an annual revenue of $300,000 and above can qualify for Credibly loans. But you're more likely to be approved if you have a personal credit score of 675, annual revenue of $540,000 and have been operating for three or more years. Before applying, you'll need a business bank account.
Triton Capital equipment loan: Best for equipment loans
Overview: Triton Capital states it’s helped thousands of businesses in over 175 industries acquire needed equipment. Its equipment loans help businesses access funds for large-scale equipment and technology, so the annual revenue requirement is higher at $350,000.
Why Triton Capital is the best for equipment loans: Triton’s equipment loans offer large loan amounts between $10,000 and $500,000. This range could fund anything from a point-of-sale system to larger-scale manufacturing equipment. Triton also pre-approves the loan amount for 90 days, giving business owners extended time to research and make their purchases. And its payment schedules are flexible: it offers monthly, quarterly, annual, semi-annual and seasonal options.
Who Triton Capital is good for: This lender works well for businesses needing a major equipment investment to get their business up and running. Triton Capital officially requires at least two years in business to qualify. But a representative told Bankrate that the company is “typically able to offer equipment loans to startup businesses” — a rarity for this type of loan.
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.
Why Taycor Financial is the best for large business loans: Taycor offers up to $5 million in funding for equipment loans and $1 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.
Quickbridge small business loans: Best for term loans
Overview: QuickBridge, which National Funding owns, was founded in 2011 to provide working capital to small businesses that can’t get approved by traditional lenders. QuickBridge offers term loans up to $500,000 that can be funded within 24 hours after application.
Why QuickBridge is the best for term loans: QuickBridge’s term loans provide funding from $10,000 to $500,000, helpful for businesses covering small-to-moderate expenses. You can make payment terms as short as four months all the way to 24 months. It also offers an early payoff discount that could help you save money for repaying your loan ahead of schedule.
Who QuickBridge is good for: This online lender works well for startups that need fast cash for short-term expenses. The company advertises a particular specialty in funding startups in restaurant, healthcare, trucking and real estate industries.
Fundbox line of credit: Best for fast funding
Overview: Around since 2013, Fundbox offers working capital for small businesses, with loan amounts ranging from $1,000 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.
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 an unique crowdfunding model.
Why Kiva is the best for community support: Kiva states that 4.7 million people globally have raised nearly $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.
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
This popular loan type is backed by the U.S. Small Business Administration. 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, in 2023 so far, 18.1% of SBA 7(a) loan funds (over $3.5 billion) have gone to startups and people who will use the funds to open a 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 term loan available to startups. These loans are short-term and cover day-to-day operating expenses such as wages, inventory purchases and paying 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 technology and 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.
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