Best Startup Business Loans

Written by BRIAN CARMODY, investopedia.com | Feb 22, 2021 5:46:27 PM

Post originally from investopedia.com

A startup business loan is financing to pay for the needs of a new business. It can help you cover the initial costs needed to establish your new business, including things like working capital, real estate, equipment, supplies, and inventory.

Many consider the SBA loan programs to be the gold standard for startup business loans. They offer high funding amounts, long payback terms, and low rates, but often require six months to two years in business, and a 20% to 30% cash injection from the borrower. But the SBA is not the only path to success. There are other ways to get a startup business loan in case you don’t meet the SBA’s requirements. 

Interviews with our category winners revealed that the average startup business funding amount is between $20,000 and $80,000 initially, whereas the average SBA loan is just over $350,000. We researched 15 lenders, most of which can fund startups through SBA loans and many other strategies. Check out our list of trusted, experienced, and innovative lenders that are helping thousands of Americans start businesses every year.

Best Startup Business Loans of 2021

Finance Factory

Best overall for startup funding, Finance Factory can get you funded with no business history or established revenue as long as you have just one of the three Cs: credit, cash flow, or collateral.

Pros
  • Available to new business owners

  • Offers a wide variety of funding products to support later stages of growth

  • Rate and term transparency

  • Funds in seven to 10 days on average

  • Free funding range report

Cons
  • Ideal credit score is at least 680

  • Business credit card option carries high interest rates when the 0% introductory period expires

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