Find the Lowest Rates on Small Business Startup Loans

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Small Business Startup Loans at a Glance

The Small Business Administration, private investors, crowdfunders, family, and friends are all tried-and-true options for financing your startup business. Each have their pros and cons, so make sure to explore every possibility! If you’re interested in a more traditional loan to get working capital and grow your business, we have three small business startup loans that can help you get the cash you need. These three products—equipment financing, business credit cards, and the credit line builder—are great options if you have a strong personal credit score and are looking to build up your business credit, too.

Small Business Startup Loan amount icon

Maximum Loan Amount

$150,000

Small Business Startup Loan term icon

Loan Term

6 months to 4 years

Small Business Startup Loan rate icon

Interest Rates

7.9 - 19.9%

Small Business Startup Loan speed icon

Speed

As little as 2 weeks

The Pros and Cons

  • Good for young businesses with limited financial history
  • Interest-free for first 9 to 15 months
  • No prepayment penalty
  • Only a credit report needed for pre-approval
  • Can take 30 to 45 days to complete financing process
  • Functions as a high-limit credit card, not as cash
  • Exceptional credit required

Apply to the Industry’s Best
“Small Business Startup Lenders” with Fundera Today!

Find Out If You Qualify

Compared to Other Loan Types...

Loan Type
Time to Funding
Avg. Interest Rates
Time to Funding
As little as 2 weeks
Avg. Interest Rates
7.9 - 19.9%
Time to Funding
As little as 3 weeks
Avg. Interest Rates
Starting at 6.5%
Time to Funding
As little as 2 days
Avg. Interest Rates
7 - 30%
Time to Funding
As little as 2 days
Avg. Interest Rates
8 - 30%
Time to Funding
As little as 1 day
Avg. Interest Rates
7 to 25%
Time to Funding
As little as 1 day
Avg. Interest Rates
Approx. 3% + %/wk outstanding
Time to Funding
As little as 1 day
Avg. Interest Rates
Starting at 10%
Time to Funding
1 week
Avg. Interest Rates
1.14 - 1.18
Time to Funding
As little as 1 day
Avg. Interest Rates
5.99 - 36% APR

Who Qualifies for Small Business Startup Loans?

As you might guess, many young and new businesses can qualify for a small business startup loan.

Since you won’t have a lot of revenue history, the most important factor to lenders will be your personal credit score:

The higher the score, the better your chances of qualifying.

Most Customers Who Were Approved Had...

Small Business Startup Loan Annual Revenue icon

Annual Revenue

Over $75,000
Small Business Startup Loan Credit Score icon

Credit Score

700
Small Business Startup Loan Time in Business icon

Time in Business

**Based on past Fundera customers.

What Documents Will I Need to Apply?

Driver's License
Credit Score
Bank Account Number
Business Plan
Equipment Quote
“
Startup loans can help turn great ideas into an actual business!
John Bak
Junior Loan Specialist
Meet the Fundera Team

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How Do Small Business Startup Loans Work?

Just starting up and already feeling lost?

The world of business financing can be confusing—especially for first-time business owners just striking it out on their own.

But not to worry. Fundera’s loan marketplace actually offers three kinds of small business startup loans for you to choose from.

Check them out and see what fits your business best.

1. Startup Equipment Financing

Equipment financing is a small business startup loan that uses the equipment you’re purchasing as collateral.

That lets your lender take a slightly higher risk—by investing in a fresh, untested business—while charging a lower interest rate.

Plus, you’ll be able to pay off the cost of that piece of equipment as it generates revenue for your business.

Applying for Startup Equipment Financing

You’ll also need a great credit score with startup equipment financing: 680 or higher.

And to submit an application for startup equipment financing, you’ll typically need a vendor quote for your equipment, a statement of how you’ll use that equipment, and a detailed credit report.

One bonus benefit: you can use the depreciation of the equipment as a tax benefit for several years!

2. Business Credit Cards

Like a consumer credit card, a business credit card gives you access to “revolving” credit to draw from—as much as you need, whenever you need it, without a hassle.

You’ll be given a maximum amount, an interest rate, and most likely a rewards system you can use to gain points, miles, or cash back in return for your purchases.

Why Use a Business Credit Card?

Business credit cards come with plenty of advantages for small business owners just starting up.

You can separate your personal and business finances to start building up your business credit, make online purchases with ease, and rest easy with a cash flow cushion you’ll have access to in case of emergencies.

Also, your business credit card’s rewards can add a lot of value, often giving you money back for travel, restaurants, gas, office supplies, and a number of other expenses.

The Best Way to Use a Business Credit Card

With that said, it’s important to spend wisely with a business credit card.

Even though a credit card is a convenient small business startup loans option, don’t go overboard on your spending: making late payments or maintaining a high utilization can hurt your credit score.

3. Credit Line Builder

This is one of the less traditional startup loan products available on our marketplace, but it’s especially useful for new business owners who are careful with their spending.

With the credit line builder, you’ll work with a financing company to apply for multiple business credit cards at once—saving yourself lots of time and energy.

Here’s the general idea:

Your approved credit amount will be the combined maximum amount of all the credit cards you qualify for, and you’ll then have access to a set of credit cards you can use to make purchases and quickly build business credit.

A Few Things to Keep In Mind

It’s important not to treat the credit line builder like a business line of credit, though.

You’ll need to be careful not to spend too much with any of the business credit cards you use, since late payments and a high utilization across multiple cards can seriously damage your credit score.

Instead, focus on spending sensibly: use the credit line builder like a tool, not a crutch.

Finally, note that the credit line builder requires a personal credit score of over 700 to qualify for.

Apply to the Industry’s Best
“Small Business Startup Lenders” with Fundera Today!

Find Out If You Qualify

What Will a Small Business Startup Loan Cost You?

1. Startup Equipment Financing

The interest rates for equipment financing fluctuate, but an average rate for startup equipment financing is about 20%.

Though a bit costly, this financing option will still help you offset some of those initial startup costs.

An Example of Startup Equipment Financing

If the equipment you’d like to purchase costs $20,000 and you’re getting 100% of that equipment financed—at 20% interest—you’ll be paying back a total of $24,000.

And loan terms are usually based on the expected life of that collateral equipment.

Assuming the startup loan term is 5 years, you’ll be making monthly payments of $400…

Not too bad for a vital piece of equipment for your startup business.

2. Business Credit Cards

APRs for business credit cards generally fall between 13 - 20%, although you should also keep an eye out for foreign transaction fees, late fees, balance transfer fees, and annual fees you’ll pay to renew the card each year.

No-Interest Loans with Business Credit Cards

Many business credit cards come with 0% introductory APRs for 9 months or a year, however, essentially letting you take out interest-free loans.

You can and should take advantage of this to make smart purchases for your business, but take care not to lose track of when that grace period ends or you’ll pay the price.

Watch for Changing Interest Rates & Due Dates

Also, you’ll want to keep an eye on your business credit card’s interest rate, as it might be subject to change.

You’ll generally be given a warning if it fluctuates, but in the end it’s on you to monitor.

Most importantly, as with any small business loan, don’t delay on your credit card payments unless it’s unavoidable.

3. Credit Line Builder

The costs for the credit line builder are similar to those for business credit cards, with one big difference.

Being Extra Careful With Multiple Credit Cards

Since you’re getting multiple business credit cards at once, you’ll need to be extra cautious when it comes to credit limits and repayments.

One late payment with a business credit card could lower your credit score a bit, but habitually making late payments across several cards will have a much harsher effect.

Build Your Business Credit

If you keep your spending in check and make your payments on time, though, you’ll benefit from the fast credit building and access to capital that the credit line builder provides.

You’ll also have to pay the financing company a one-time origination fee calculated as a percentage of your approved amount, in return for the business credit card applications they strategically filed for you.

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