2019 Best Startup Business Loan Options

About 30% of startups fail due to a lack of sufficient capital.1 So it’s no wonder why more and more startups lean on small-business loans to grow their business.

Starting and operating a business is an exciting adventure, but it’s no simple task. One of the biggest challenges startups face is obtaining adequate capital to support their growth. With a little financial cushion, new entrepreneurs can maintain inventory, hire employees, purchase equipment, and cover any additional startup costs while getting their business off the ground.

However, without a couple years of business under your belt and a solid profit history, traditional lenders and banks may turn you away or charge you sky-high interest rates. Most lenders take a number of factors into consideration, such as current debt load, cash flow, credit, collateral, time in business, and industry. Thankfully, there are several alternative online lenders that provide business loans for smaller companies.

business-loan-factorsHere’s a breakdown of the best small-business loans for startups, but don’t forget, there are many great business loan options available.

Compare small-business startup loans
CompanyLending typeRequired years of businessesLowest listed rate*Required annual incomeGet a loan
LendioLending marketplace0.5N/AFlexibleApply Now
OnDeckDirect19.99%$100,000Apply Now
KabbageDirect11.5%$50,000Apply Now
LendingClubPeer-to-peer15.99%$50,000Apply Now
AccionDirect0N/AFlexibleApply Now
Funding CirclePeer-to-peer24.99%FlexibleApply Now

Best overall: Lendio

  • Quick application process
  • Startup loan options from over 75 lenders
  • Fast funding
  • 6-month business operation requirement
  • 550 minimum credit score requirement

Placing Lendio at the top of our list was a no-brainer. Lendio isn’t your typical lender. Instead of offering loans, Lendio provides a first-of-its-kind marketplace where business owners can find any loan under the sun—through a variety of lenders. Its simple platform offers a plethora of loan options, tailored to your business and budget needs, which makes it hard to compete with. Think of it as the “KAYAK” for business loans.

To qualify for a startup loan, businesses typically need to show six months of history and have a credit score of 550 or higher. Most lenders will also want to see industry experience. Additionally, lenders may require you to secure your loan with collateral, such as a car or house. To find out how much financing you can afford, check out Lendio’s startup business loan calculator.

Most flexible: OnDeck

  • Fast funding
  • Loyalty benefits
  • Solid customer service
  • High interest rates
  • Frequent payments

OnDeck stands out among the rest by offering both term loans and lines of credit. If you have to finance a project, you can receive a loan that lasts 3 to 36 months. On the other hand, OnDeck’s line of credit gives you a set amount of funds, which you can draw from whenever you need to cover a one-off cost. After dipping into the credit line, fixed weekly payments will automatically get deducted from your bank account. OnDeck considers businesses that have been in operation for at least 12 months and have a minimum of $100,000 in annual revenue. Once approved, you’ll see money in the bank in as fast as 24 hours.

OnDeck offers discounts on renewal loan fees and allows its customers to qualify for lower pricing with each consecutive business loan. So it pays to partner with OnDeck. Perhaps that’s why it boasts an A+ rating with the Better Business Bureau. On top of that, OnDeck will help you establish a solid credit history by reporting to the business credit bureaus.

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Best for quick funding: Kabbage

  • Fast funding
  • Lenient application process
  • Convenient Kabbage Card
  • High interest rates
  • Complex fee structure

Time is money, so if you need funds yesterday, Kabbage should be your go-to lending option. Its business loan application process can be completed in minutes, and if approved, you’ll have access to lines of credit immediately.

Business owners will have their funds at their fingertips thanks to the Kabbage Card, a purchasing card tied to your Kabbage account. If you’d rather not carry around a physical card, you can access your funds through your phone or computer.

If you’re worried about qualifying, you may be pleased to know that Kabbage’s borrowing qualifications are fairly lenient. You must be in business for at least one year and have an annual income of $50,000 to be considered.

While researching Kabbage, we did see a few complaints of expensive monthly payments and high annual percentage rates.

Best affordable option: LendingClub

  • Low interest rates
  • 3- to 5-day turnaround
  • No collateral requirement for loans under $100,000
  • No loans for businesses younger than 12 months

With LendingClub, you can get a total annualized rate between 9.77% and 35.71% alongside fixed monthly payments. Unlike other online business loans, business owners don’t need to provide collateral for loans less than $100,000 or send financial projections.

LendingClub has decently lenient eligibility requirements. It requires you to be in business for at least 12 months and generate an income of $50,000 per year.

Best nonprofit: Accion

  • Different options for a variety of businesses
  • Relaxed eligibility requirements
  • Personalized approach
  • Slow approval process
  • Additional fees

As a nonprofit, Accion’s mission is to help small-business owners obtain financing for growth. Accion helps startups become “loan ready” by providing a more personalized approach, which unfortunately makes for a longer approval process. Plus, Accion works with startups that have been in business for less than a year—a rarity among lenders.

In an effort to aid a wide variety of struggling entrepreneurs, Accion specifically helps veteran-, minority-, and women-owned businesses. Additionally, Accion offers unique small-business loans for each state.

During the application process, startups may be required to provide a business plan with a 12-month cash flow projection. To see if you’ll qualify for an Accion loan, enter your business zip code in its platform and review the requirements in your area.

Honorable mention: Funding Circle

  • Friendly customer service
  • Competitive loan terms
  • Fast and easy application process
  • Rigorous eligibility requirements
  • Slow access to capital

If you value friendly customer service and transparency, Funding Circle may be the right online lender for you. And it offers a competitive 4.99% interest rate. However, if you’re outside the US, the UK, the Netherlands, or Germany and are in the market for a small loan, consider other options.

Funding Circle has a few other drawbacks. Its strict requirements make it difficult for startups with little cash flow to get approved: businesses must be in business for two years and have a credit score of at least 620.



If you lack a good credit score, Fundbox is worth considering. In fact, there are no minimum credit score or monthly income requirements. As long as you’ve been in business for at least six months, you should be approved. Plus, you won’t need to pledge collateral, and Fundbox provides credit limits up to $100,000.


SMART Box is a capital comparison tool that was launched by OnDeck, CAN Capital, and Kabbage. Its goal is to streamline the online loan process by providing standardized pricing comparisons, including details like APR and total cost of capital. This gives startups a bird’s-eye view of their financing options.


StreetShares is a community-based online lender that matches borrowers with investors based on their similarities. It offers a lot of leeway in terms of borrowing standards. Companies must be in business for one year and generate at least $75,000 per year.


Unlike some other online business loans, QuarterSpot offers quick approvals, fast funding, and a minimal effect on credit, making it a great option for small-business loans. However, QuarterSpot falls short on its high cost of borrowing—APRs range from 30% to 70%.

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Considerations for business loans for startups

Funding for startups

A traditional loan isn’t the only way startups can receive funding to grow their business. Here are a few creative ways you can seek financing:

  • Personal savings
  • Family and friend investments
  • Angel investors
  • Venture capitalists
  • Microlenders
  • Crowdfunding sites
  • Equipment financing
  • Peer-to-peer loans
  • Merchant cash advances

Business loans for startups with bad credit or no credit

Contrary to popular belief, it’s possible for startups to get approved for a small-business loan—even with a poor credit score. Some types of loans have more lenient approval processes than others, making them great options for businesses with bad credit.

Business loans for women-owned startups

Business loans specifically for women-owned businesses don’t exist due to laws prohibiting discrimination based on gender. That being said, there are several online lenders (including the ones mentioned above) that focus on advocating and supporting women entrepreneurs. Women entrepreneurs can also benefit from a variety of grants, grant resources, and nonprofit organizations.

Startup business loans for veterans

As a brand-new business, it can be difficult to receive financing. It can be even more difficult for military veterans who may have gaps in their financial history. But not all hope is lost. For more information on other financial resources for veterans, check out our list of small-business loans for businesses with bad or no credit.

Startup business loans with no collateral

Most business loans require collateral—a tangible, valuable asset put up to secure a loan. In other words, if your business goes under and you can’t pay back the loan, the lender can take possession of the collateral to recover the debt. This isn’t an ideal situation for startups. Fortunately, there are a variety of business loans that don’t require collateral. Some of these unsecured business loans are easy to get and offer flexible term options.

Startup business loans through the government

Traditional lenders tend to have a tough time issuing loans to businesses without strong credit scores and financial histories. Fortunately, government loans, typically offered through banks that partner with the Small Business Administration (SBA), reduce risk for lenders while making it easier for startups to get approved. And the benefits don’t stop there. Government-backed loans come with low rates and fees—and no collateral needed.

Personal business loans

Depending on your specific lender, you may be able to use a personal loan to fund a business, purchase equipment, stock up on inventory, and pay your employees. Personal loans not only are more flexible but also offer lower APRs and are easier for first-time business owners to qualify. Keep in mind that there are a few drawbacks to using a personal loan to start a business. For one, personal assets could be at risk, including your home or car. Second, personal loans often come in smaller amounts than business loans. And finally, you won’t be able to get tax credits for your interest payments like you would with business loans.

Final thoughts

Best Small Business Loans
Best Overall
Best for Larger Loans
Best for Low Credit
Most Convenient
Funding Circle
Best for P2P Lending

When looking for funding, it’s essential to know which small-business financing option is right for your business and what data you’ll need to prove that your startup is worthy of the risk. Although it can feel like searching for a needle in a haystack, it’s important to not lose hope. Rest assured, there are a variety of options.

If you’re a startup looking for working capital to grow your business, we encourage you to consider a business loan through one of our recommendations listed above. If you’ve found success with a different startup online lender, we’d love to hear your thoughts in the comments below.


At Business.org, our research is meant to offer general product and service recommendations. We don’t guarantee that our suggestions will work best for each individual or business, so consider your unique needs when choosing products and services.


  1. Fortune, “Why Startups Fail, According to Their Founders