Best Small-Business Loans for Startups—2021

Some 30% of startups fail because the money dried up—don’t let yours be one of them.1
Best overall
Lendio
Lendio
5 out of 5 stars
5.0
  • Icon Pros  Dark
    Fast, easy application
  • Icon Pros  Dark
    Variety of lenders and loans
Best for low credit
Fundbox
Fundbox
3.6 out of 5 stars
3.6
  • Icon Pros  Dark
    Low approval requirements
  • Icon Pros  Dark
    Automated application
Most convenient
Kabbage
Kabbage
3.1 out of 5 stars
3.1
  • Icon Pros  Dark
    Fast funding
  • Icon Pros  Dark
    Automated approval process
Best for repeat loans
OnDeck
OnDeck
2.9 out of 5 stars
2.9
  • Icon Pros  Dark
    Loyalty benefits
  • Icon Pros  Dark
    Multiple loan options
Best for microloans
Kiva
Kiva
3.1 out of 5 stars
3.1
  • Icon Pros  Dark
    Zero-interest loans
  • Icon Pros  Dark
    Few borrower qualifications

Being a startup business owner is exciting—you have so many opportunities and so much potential ahead of you. Of course, it can also be stressful. There are plenty of startup costs that can get in your way. And if you’re not careful, cash flow problems can bring your business grinding to a halt.

But you probably already know that. You just need to know how to get the financing to grow your startup.

That’s why we’re here. In our rankings below, we’ll tell you about the best startup funding out there—and how to qualify for it—so you can make business boom.

Bullhorn
What counts as a startup loan?
In this ranking, we’ll focus on loans you can qualify for with one year or less in business and $100,000 or less in annual revenue—in other words, business financing young startups can actually get.

Best small-business loans for your startup

Compare the best startup business financing

Company
Loan min./max.
Lowest listed rate*
Min. annual revenue
Min. time in business
Get a loan

Lendio

$500/$5 million

6%

$50,000

6 mos.

Fundbox

Up to $100,000

4.66% draw rate

$50,000

2 mos.

Kabbage

$2,000/$250,000

1.5 factor rate

$50,000

1 yr.

OnDeck

$5,000/$250,000

31%

$100,000

1 yr.

Kiva

$0/$15,000

0%

N/A

N/A

Accion

$300/$250,000

7%

N/A

N/A

StreetShares

$2,000/$250,000

7.75%

$25,000

1 yr.

CanCapital

$2,500/$250,000

Unlisted

$150,000

6 mos.

Data effective 11/18/20. At publishing time, loan amounts, rates, and requirements are current but are subject to change. Offers may not be available in all areas.

Lendio: Best overall

Lendio
Lendio

One application at this loan marketplace will connect you with tons of lenders and loans, making it the best first stop for any startup.

What if—instead of spending time applying to multiple lenders to see who will approve you and what kind of offers you get—you could fill out one application and get multiple loan offers to compare and choose from? Yep, that’s Lendio. Just fill out one short application, and Lendio will match you with loans that your business qualifies for. Then you can choose the one you like best. Easy, right?

To qualify for a Lendio loan, you’ll need to have been in business for six months and have at least a 550 credit score. Now, meeting those bare minimum qualifications won’t get you the lowest rates or biggest loans. But given that Lendio works with more than 75 lenders (including some we recommend below), there’s a good chance you’ll find some kind of funding for your startup.

With everything from equipment financing to lines of credit to long-term loans, Lendio offers one-stop comparison shopping for small-business loans. What’s not to like?

Strengths
Pro Bullet Fast application
Pro Bullet Wide variety of funding and lenders
Pro Bullet Personalized guidance and expertise
Weaknesses
Con Bullet High interest rates on some loans
Con Bullet Reports of hard credit inquiries

Fundbox: Best for bad credit

Fundbox
Fundbox

Fundbox asks for a credit score of just 500, making it great for businesses with bad credit.

Even though you’re applying for a business loan, most lenders look at your personal credit score. If that worries you, we recommend Fundbox. It uses an automated application that looks at your accounting software or business bank account, which means your credit score doesn’t matter as much. Fundbox accepts credit scores as low as 500. 

Now, Fundbox may not care too much about your credit score, but it does look for some basic qualifications. Your business needs to be at least two months old—preferably six—and make $50,000 in annual revenue. And if you do get approved, keep in mind that Fundbox has relatively high fees on its financing. But if your credit score would keep you from getting approved for other loans, Fundbox is a great choice.

Strengths
Pro Bullet Automated application
Pro Bullet Low approval requirements
Pro Bullet Fast funding
Weaknesses
Con Bullet Low maximum loan amounts
Con Bullet High APR

Kabbage: Most convenient

Kabbage
Kabbage

Kabbage is the most convenient lender on this list. It offers fast funding—and several ways to access it—so you can get back to business quickly.

Much like Fundbox, Kabbage has an automated application and approval process. Simply connect Kabbage to your business bank account, and you can get a decision in mere minutes. But the convenience of Kabbage doesn’t stop there. This lender may offer only lines of credit, but it allows you to access your line through a Kabbage card (that you can use like a credit card), PayPal (for near-instant funding), or a deposit in your bank account.

That kind of convenience makes Kabbage one of our favorite lenders—but we also like its relaxed qualifications. While Kabbage will check your credit score, it doesn’t look for a specific minimum credit score. Plus, it requires only one year in business and $50,000 in revenue. You do need to watch out for its high fees and rates, but that shouldn’t stop you from applying. Because when it comes to convenience, Kabbage loans can’t be beat.

Strengths
Pro Bullet Multiple ways to access funding
Pro Bullet Fast, automated approval process
Pro Bullet No credit requirement
Weaknesses
Con Bullet High rates and APR
Con Bullet Confusing fee structure

OnDeck: Best for repeat borrowing

OnDeck
OnDeck

OnDeck offers lower rates and other perks to repeat borrowers. So if you plan on more loans in the future, you might want to start with OnDeck today.

We’ll be honest: OnDeck doesn’t have the best deals for first-time borrowers. But OnDeck gives repeat borrowers lots of perks, including reduced (or even waived) fees and lower APR on loans. So if you need a term loan for your startup now, and you think you’ll need more business loans in the future, OnDeck might be a good fit. And there’s no better time to start building that beneficial relationship with OnDeck than right now.

OnDeck has pretty reasonable application requirements for startups: a 600 credit score, one year in business, and $100,000 in revenue. Now, those application requirements are higher than our other four favorite lenders for startups, so OnDeck isn’t for everyone and every business. But if you meet or exceed those qualifications, and you want to create a long-term relationship with your lender, then OnDeck might be right for you.

Strengths
Pro Bullet Lower rates for repeat borrowers
Pro Bullet Reporting to business credit bureaus
Pro Bullet Excellent reputation with borrowers
Weaknesses
Con Bullet High rates for first-time borrowers
Con Bullet Required lien and personal guarantee

Kiva: Best for microloans

OnDeck
OnDeck

Kiva doesn’t charge any interest on its microloans, making it one of the most affordable lenders out there.

What if you didn’t have to pay interest on your financing? With Kiva, you don’t. It offers 0% interest on all its microloans. Sure, you’ll have to start the crowdfunding process by getting your family and friends to pitch in some funding (a process that can take more than 30 days), but what other lender offers interest-free loans?

Do keep in mind, though, that Kiva microloans go up to only $15,000. That’s a much lower maximum loan size than you’ll find from other lenders. (They’re called microloans for a reason.) Of course, if you’re just getting started, that might be more than enough.

Strengths
Pro Bullet Zero-interest loans
Pro Bullet Few borrower qualifications
Pro Bullet High funding success rate
Weaknesses
Con Bullet Small maximum loan size
Con Bullet Slow funding process
Don't qualify for a business loan? Get a personal loan instead.

Honorable mentions

The lenders above are our favorites for startup businesses—but the five below aren’t half bad either.

Accion: Best for unique businesses

Accion wants to get to know you—the real you—and your business. Sure, Accion looks at your credit score and your business revenue, but that’s only the tip of the iceberg. It has a unique, lengthy application where you can share what makes you and your business special. So even if you’ve been passed over by other lenders, Accion might see your true potential and give you the loan you need.

StreetShares: Best for peer-to-peer lending

Maybe you’ve heard good things about P2P (peer-to-peer) lending, like the fact that you can often get surprisingly low rates. In that case, you might like StreetShares. While it’s not our absolute favorite P2P lender (Funding Circle takes that honor), StreetShares still offers great deals on loans. More importantly, it’s one of the only P2P lenders that startups can qualify for. So if P2P financing interests you, give StreetShares a try.

CanCapital: Best for merchant cash advances

Look, we don’t really love recommending merchant cash advances (MCAs), and CanCapital has higher revenue requirements than most lenders on this list. But if you’re fine with the high rates and short repayment terms that come standard with MCAs, you can do worse than CanCapital. It has great reviews with customers and a good rating with the BBB (a rarity among MCA companies). If you want an MCA to tide over your cash flow needs, CanCapital is your best bet.

Money
SMART Boxes
Many of these lenders will provide you with a SMART Box when you get a loan offer. Look at it! This tool clearly lays out the total cost of your loan—from APR to fees—so you know exactly how much you’re really paying.

Other loans you should know about

If you do decide to stick with loans, you might want to consider these specialized types of loans.

Business loans for startups with bad credit or no credit history

Got poor credit? That doesn’t mean you have to give up on funding your business. Some types of loans are easier to qualify for than others. We’ve rounded up some of our favorites in our guide to the best business loans for bad credit.

Business loans for women-owned startups

It’s illegal for lenders to have loans specifically for women-owned businesses, just like it would be illegal for them to have loans for men-owned businesses. That being said, some lenders have specific programs for women business owners. You can learn more in our rankings of the best business loans for women.

Loans for minority-owned businesses

As you’d expect, it’s also illegal for lenders to discriminate on the basis of race—including giving preference to minority business owners. But we still found some lenders that we think will work better for minority-owned businesses, ranked in our list of the best small-business loans for minorities.

Startup business loans for veterans

If you’re a veteran business owner, you probably know all about VA home loans. But what about veteran business loans? Well, there are no business loans exclusively for veterans, but there are some loans, grants, and resources for veteran entrepreneurs you should know about.

Business loans with no collateral

Most lenders require you to have collateral—usually business assets like equipment or real estate—to secure your business loan. But if you’re a startup with few assets to your (business) name, you might not have the necessary collateral. In that case, check out our list of the best unsecured business loans.

Government-backed loans

The U.S. Small Business Administration (SBA) backs some business loans. These SBA loans have great low rates and fees. As a young startup, your business probably won’t qualify for SBA loans yet (two years in business is one of the basic requirements), but they’re something you should work toward in the future.

More financing options for startups

Traditional loans are great, but they’re far from the only way to finance your business. If you want to grow your startup, you can also consider other small-business funding options like these:

  • Personal savings
  • Personal loans
  • Business credit cards
  • Business grants
  • Family and friend investments
  • Angel investors
  • Venture capitalists
  • Crowdfunding sites
  • Equipment financing

The takeaway

Even as a startup business owner, you have plenty of financing options. From lending marketplaces like Lendio to merchant cash advances from CanCapital, there are lenders that are ready and willing to work with your business.

So find the one that fits your needs and qualifications the best, and then get that funding to grow your business.

Now that you’re reading to apply for a startup loan, make sure you avoid common mistakes when getting a business loan.

Disclaimer

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.

Chloe Goodshore
Written by
Chloe Goodshore
Chloe covers business financing and loans for Business.org. She has worked with many small businesses over the past 10 years, from video game stores to law firms. Those years watching frustrated business owners try to sift through their many options gave her a passion for breaking down complex business topics. She wants to help business owners spend less time agonizing over their businesses so they can spend more time running them.
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