Best Startup Business Loans of 2021: 0% APR available | Finder

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Best startup business loans of April 2021

Compare options for entrepreneurs and small businesses less than three years old.

Startup crew standing together in the office

This article was reviewed by Doug Noll, a member of the Finder Editorial Review Board and award-winning lawyer, mediator and author with over 40 years of experience in the legal field.

Startup business loans work a little differently than funding options for established businesses. Instead of focusing on your business’s revenue and debts, these lenders look at small business owners’ personal credit and finances.

Our team spent has spent over 600 hours reviewing over 220 business loan providers before we picked these nine options. We paid special attention to requirements, interest rates, fees and repayment terms. And we revise this list regularly. In January 2021, we made Guidant Financial our best overall pick because it provides funding entrepreneurs and new businesses.

But weigh your other options before you get a startup business loan. Funding a startup is risky and lenders tend to charge higher interest rates in fees on these small business loans. If your business fails, your personal credit could take a hit.

What are the best startup business loans?

Best for startup business loans overall: Guidant Financial business loans

Min. Credit Score
Starting APR
Loan Amount
Guidant Financial is one of the few lenders that offers a line of credit for businesses that haven't opened their doors yet. To qualify, you'll need good personal credit, minimal inquiries and a credit utilization ratio under 50%. It even offers a 0% introductory rate for well-qualified applicants. After that, interest rates range from 12% to 18% — lower than typical business credit cards. But it comes with a high 9% origination fee. And it's not the fastest option out there — it can take up to a month to fund your LOC.
  • Businesses in the planning stage OK
  • Interest-free promotional period
  • Lower rates than typical business credit cards
  • Origination fee of 9%
  • Personal credit score of 690 or higher required
  • Can take three to four weeks to fund your LOC
Min. Loan Amount $10,000
Max. Loan Amount $150,000
Interest Rate Type Fixed
Min. Credit Score 690
Lendio business loans logo


Finder Rating: 4.75 / 5

Check eligibility
on Lendio business loans's secure site

Best for rate shopping: Lendio business loans

Min. Credit Score
Starting APR
Loan Amount
Lendio has a large network of lenders offering 12 types of business financing — including credit cards and startup loans up to $750,000. You also don't need to have the best credit to qualify — its partners accept scores as low as 560. And its rates are capped relatively low for startup financing at just 17%. But it's not a good idea if you're in a rush — it can take up to a month to get your funds.
  • Network of over 300 lenders
  • Wide range of business loan options
  • Bad personal credit accepted
  • Must pay origination fee after loan is finalized
  • May receive marketing material from lenders
Min. Loan Amount $500
Max. Loan Amount $5,000,000
APR Starting at 6%
Interest Rate Type Variable
Min. Credit Score 560
Minimum Loan Term 12 months
Maximum Loan Term 300 months
Seek Business Capital loans logo


Finder Rating: 4.5 / 5

Check eligibility
on Seek Business Capital loans's secure site

Best for SBA loans for startups: Seek Business Capital loans

Min. Credit Score
Starting APR
Loan Amount
As a business loan connection and consulting service, Seek Business Capital specializes in connecting startups with funding — including Small Business Administration (SBA) loans. It's not for businesses that haven't opened their doors yet, though. You'll need to be up and running for at least six months and meet strict criteria to qualify for government-backed funding. But it comes with some of the lowest rates out there for startup financing.
  • Borrow up to $350,000 with SBA funding option
  • Open to businesses just six months old
  • Only SBA loans offered are Express Loans
  • Takes three to six months to get funds
Min. Loan Amount $5,000
Max. Loan Amount $500,000
APR Varies by lender
Interest Rate Type Fixed
Min. Credit Score 680

Best for startups in the growth phase: SBG Funding small business term loans

Min. Credit Score
Starting APR
Loan Amount
SBG Funding specializes in growth loans for businesses at least six months old that have struggled to qualify with traditional lenders. It also has low starting rates of just 5% — though they max out at 35%. While it accepts personal credit scores as low as 500, your business will need to have at least $150,000 in annual revenue to qualify. For smaller startups, that can be a tough obstacle to overcome.
  • Low starting APR of 5%
  • Open to business owners with bad credit
  • Works with businesses in high-risk industries
  • High annual revenue requirement of $150,000
  • Potential weekly repayments
  • Not transparent about fees
Min. Loan Amount $5,000
Max. Loan Amount $5,000,000
APR 5% to 35%
Interest Rate Type Fixed
Min. Credit Score 500
Minimum Loan Term 6 months
Maximum Loan Term 60 months
Turnaround Time As soon as 3 business days

Best for finding a low rate: Sunwise Capital small business loans

Min. Credit Score
Starting APR
Loan Amount
Sunwise Capital has a Best Rate Guarantee on top of its already competitive rates that start at 5.49%. If you're looking for minimal paperwork and quick turnaround, Sunwise may be a good option. Just be sure your business is at least a year old and meets the high $150,000 annual revenue requirement.
  • Best rate guarantee
  • Bad personal credit accepted
  • Get funds in just one business day
  • High annual revenue requirement of at least $150,000
  • Potential daily or weekly repayments
Min. Loan Amount $10,000
Max. Loan Amount $2,000,000
Interest Rate Type Fixed
Min. Credit Score 500

Best for online startups: US Business Funding business loans

Not stated
Min. Credit Score
Starting APR
Loan Amount
Older startups that work solely online can take advantage of US Business Funding's low starting rates of just 3.5% and flexible loan terms between three months and 10 years. And it's fast — you might be able to get your funds in just two business days. But to qualify, you'll need to be operating out of the same office for at least a year.
  • Flexible loan terms available
  • Extremely low starting APR of 3.5%
  • Get funds in just two to three business days
  • Only available to internet-based businesses
  • Must be operating out of the same office for at least a year
Min. Loan Amount $10,000
Max. Loan Amount $2,000,000
Interest Rate Type Fixed
Minimum Loan Term 3 months
Maximum Loan Term 120 months
Turnaround Time As soon as 24 hours

Best for using your retirement funds: My Solo 401k Financial business financing plans

Min. Credit Score
Fee based
Starting APR

Loan Amount
If you have retirement savings, you can use your funds to open or fund your business. Its setup fees are about $1,000 lower than the rest of the competition. And you'll get help setting up your business and responding to audits from the IRS or Department of Labor. But if you plan on hiring more than 10 employees, the $75 annual fee per additional person can add up quickly for businesses just starting out.
  • Legal and compliance assistance included
  • No minimum time-in-business requirement
  • Must establish a C corporation
  • High fees for large companies
Interest Rate Type N/A

Best for microloans: Kiva business loans

Min. Credit Score
Starting APR
Loan Amount
Kiva is a microlender that specializes in small-dollar financing for underserved business owners. Its crowdfunded loans come with 0% interest, making it one of the most competitive options on this list. It's willing to work with entrepreneurs of all credit types. And you don't necessarily need to be a US citizen or permanent resident to qualify. However, it can take over a month to raise funds – think twice about this lender if you need cash fast.
  • No interest or fees
  • All credit types welcome
  • No residency requirements
  • Relies on your social network for crowdfunding
  • Can take up to 45 days to raise funds
Min. Loan Amount $25
Max. Loan Amount $15,000
APR 0%
Interest Rate Type N/A
Minimum Loan Term 1 months
Maximum Loan Term 3 months

Best for startups in high-risk industries: Diamond business loans

Min. Credit Score
Starting APR
Loan Amount
Diamond Business Loans is a California-based lender that works with startups in industries other lenders might turn away — including cannabis. It also has some of the most competitive rates you'll find for new businesses, ranging from 5.9% to 19.99%. But you'll need to have a personal credit score of at least 680 and no late payments or bankruptcies on your credit report to qualify. And it can take one to two weeks to receive your funds.
  • Low starting APR of 5.9% to 19.99%
  • Based on your personal finances rather than your business's
  • Representative guides you through the application process
  • 10% origination fee
  • Can take a few weeks to fund
  • No online application
Min. Loan Amount $25,000
Max. Loan Amount $150,000
APR 5.9% to 19.99%
Interest Rate Type Fixed
Min. Credit Score 680
Minimum Loan Term 12 months
Maximum Loan Term 60 months

What are some alternative ways I can finance a startup?

A business loan isn’t the only to cover the costs of your new business — it might not even be the best option. Before you take out a loan, consider your choices to find the right combination of funding.
Financing optionBest for …Full guide
Unsecured business loansMore established startups with minimal assets.Learn More
Secured business loansMore established startups with assets or equipment.Learn More
SBA loansStartups looking for competitive, government-backed terms.Learn More
MicroloansNew startups in need of minimal financing.Learn More
Personal loansBusiness owners with strong personal credit.Learn More
Equity investmentsStartups that are willing to take on an investment partner.Learn More
CrowdfundingBusiness owners with a large social network.Learn More
Business grantsStartups that serve the community.Learn More
Credit cardsLimited purchases that can quickly be paid off.Learn More
Rollover for business startups (ROBS)Business owners with at least $50,000 in retirement savings.Learn More
Friend and family loansInitial financing to get a startup off the ground.Learn More

1. Unsecured business loans

An unsecured business loan doesn’t require any collateral. These can be hard to come by if you haven’t opened your business yet, and it can be expensive since lenders tend to see startups as a risk. However, they have a number of benefits: You won’t risk losing any of your business’s assets if things don’t work out and can’t pay back the loan. But you could still lose some of your personal assets if it requires a personal guarantee.

Unsecured business loans don’t necessarily have to be term loans. Lenders like Kabbage and BlueVine offer lines of credit that your business can draw from as needed — but newer startups are unlikely to meet the time in business requirements set by most providers.

2. Secured business loans

A secured business loan is backed by some of your business or personal assets as collateral. They can be easier to come by as a startup since the collateral offsets the risk for the lender. They also tend to have more favorable rates and terms than unsecured business loans. But you risk losing your collateral if you or your business isn’t able to repay the loan.

Compare secured and unsecured business loans

3. SBA loans

These government-backed loans come with some of the most competitive rates and terms out there. While not all programs are available to startups, your business might be able to qualify for a microloan or other small loan, which typically run up to $350,000. But they’re not always easy to get — only 54% of SBA loan applicants were approved in 2016, according to a Federal Reserve survey. You should also be prepared to spend at least a month working on the application and even longer waiting for an approval decision.

4. Microloans

Microloans are small-dollar financing available to all types of businesses, including startups. They are designed to help you cover the little things when you’re just getting on your feet — like buying office supplies or stocking up on your first set of inventory. Microloans, like those offered by Kiva and Accion, typically start around $500 and come with shorter terms than your typical unsecured loan, but they also tend to have higher rates.

5. Personal loans

If you have strong personal credit and a steady source money coming in, personal loans could be a better deal than a business loan when you want to start a business. Your lack of experience won’t hurt your application, and many states don’t allow lenders to charge more than 36% APR. However, personal loans rarely go above $100,000 or come with terms longer than seven years, so it might not be able to cover all of your startup costs.

6. Equity investments

One of the more common ways to fund a startup is to take on investors in exchange for equity, or partial ownership of the company. Typically, small businesses can get an equity investment through a venture capital firm or an angel investor.

There’s no limit to how much money you can raise through this method. And while you won’t have to pay back any of the money you receive from an investor, you could lose partial control of your company.

You may want to keep a lawyer on retainer for this sort of funding though. They’ll help you navigate securities laws so your business can avoid legal issues down the road.

7. Crowdfunding

Entrepreneurs that have an pitchable idea might want to look into equity or rewards-based crowdfunding. With equity crowdfunding, your company starts an online campaign to receive funding from multiple investors in exchange for partial ownership.

With rewards-based crowdfunding, your business offers prizes in exchange for donations. Like a personal loan, crowdfunding might not cover all of your startup costs, but could be great for funding a project.

And although slightly different, peer-to-peer lenders like Funding Circle offer similar loans, although your business will have to pay interest on any funds it receives.

However, new regulations are being put in place. The amount of funding you’re able to get may end up restricted, depending on the Securities and Exchange Commission’s rulings.

8. Business grants

Startups with a mission — especially nonprofits — might want to look into business grants to get off the ground. Like an investment, you don’t have to repay a grant. However, they can be highly competitive and require a lot of work. They also typically don’t get much higher than around $15,000, so it will likely need to be supplemented by other funding methods.

9. Credit cards

A credit card can be a great way to cover smaller expenses and manage your company’s spending since multiple people can have cards from the same account. Some of the top startup-friendly business credit cards have a 0% APR promotional period, making it a viable option for businesses that expect to be able to pay off what they spend within the first year. Other types of business credit cards offer rewards on office supplies, Internet and other costs you might incur during growth.

10. Rollover for business startups (ROBS)

If you’re willing to borrow from your retirement plan, a ROBS might be a worthwhile investment for your startup. It involves taking advantage of a tax loophole that allows your business to access these funds without paying a penalty if it’s the right type of corporation.

You need to have at least $50,000 in your retirement account to qualify and could face heavy fines, so many business owners opt to hire a third party to handle the complicated details. But if it works, you won’t have to pay any interest, early withdrawal fees or lose equity in your company.

11. Friend and family loans

Borrowing from your friends and family is sometimes the easiest way to get a good deal on startup funding — and there’s a chance you might not have to pay interest or sell any equity. Want to make it official? Use a service like LoanWell to whip together a legally binding contract with interest fees and late penalties.

Which banks offer startup business loans?

Community banks sometimes offer startup business loans — though not all do. These business loans are closer to a personal loan to start a business than a traditional business loan.

A community bank can be a good option for starting a business because these lenders tend to charge lower interest rates and fees than online startup lenders. If you work with a banker that’s an expert in your industry, you’ll also get access to personalized financial advice. This can be crucial during those tough first few years.

And when your business is ready for a regular business loan, you’ll already have a relationship with a bank that knows your business from the beginning. This can speed up the funding time and might make it easier to get approved — if your business is doing well.

What are the differences between debt finance and equity finance?

There are three main types of funding: Debt, equity or internal funds. Debt involves borrowing money from a business lender, equity finance is provided by an owner or investor, and internal funds are derived from cash flow or profits.

In a business’s early stages, internal funds can be harder to come by. This leaves you with a choice between debt and equity finance.

FeaturesDebt financeEquity finance
Where to find it
  • Banks
  • Credit unions
  • Online lenders
  • Angel investors
  • Family and friends
  • Business partners
  • Crowdfunding
How much you can borrowBusiness loans usually range from $1,000 to $5,000,000.It could be hundreds or millions of dollars, depending on the source.
How it’s repaidYou make regular payments to repay the debt. Terms differ depending on the lender.It isn’t repaid, but the financiers may then own a part of the business or take part in decision-making.
  • You stay in control of your business
  • Some business lenders have flexible eligibility criteria
  • There’s a range of loan types available
  • Funding can be quick depending on the turnaround time
  • No collateral is required
  • You’re not required to repay the funds
  • Investors can provide strategic guidance for the business
  • No exposure to interest rate changes
  • You may be required to provide collateral as security
  • There may be restrictions on the fund use
  • Your profits need to be used to repay the debt
  • Finding equity finance is usually a slow process
  • You usually give up some control of your business or the business decision-making power
  • The funds can come with restrictions on usage
  • There may be conflicts with investors on which direction to take the business

      How do I qualify for a business startup loan?

      Startup business loan requirements vary from lender to lender. However, most focus on the entrepreneur’s history of paying off personal debt rather than the business itself. You’ll have the most options if you meet the following criteria.

      • Good credit. Many business startup loan providers ask for a 680 credit score or higher.
      • No recent bankruptcies. In addition to looking at your credit score, startup lenders typically also look at your credit report. Bankruptcies stay on your report for seven years.
      • No recent delinquencies. If you’ve been late paying off debt, that could also hurt your chances of getting a startup loan.
      • A strong business plan. Since your business doesn’t have a track record to back itself up, your business plan is often the only place where you get to make a case for yourself.

      Can I get a startup business loan with bad credit?

      It’s possible to get a startup business loan with bad credit. But it depends on the type of loan your business needs. There are business loans available for people with bad credit, and some options — like ROBS or crowdfunding — won’t necessarily rely on your credit score. You may be able to qualify for some term loans or alternate types of business loans, but be aware that these come with a higher price tag.

      If you’re just starting out, it may be worth improving your personal credit score before borrowing for your business.

      How to apply for a startup loan

      Once you know how much you need to borrow and have compared lenders, you’re ready to apply. To speed up the application process, ask your lender what documents and information you’ll need before you apply. Many ask to see financial projections, a business plan and your credit report.

      Next, follow your lender’s instructions to complete the application. Most have online applications, but you may also need to speak with a loan specialist first to make sure your business is a good fit. Once you’ve spoken with someone and confirm you and your business are eligible, follow the instructions on the application. And if you run into any trouble, don’t be afraid to reach out to customer service for help.

      What documents will I need to provide?

      Lenders will want to see at least these documents when you submit an application:

      • Business plan
      • Growth and revenue forecasts
      • Recent personal and business tax returns
      • Bank statements

      Other documents or information may also be necessary. Check with your lenderto ensure you have everything in order before you apply.

      Bottom line

      Funding your startup can help increase profits, but it can be risky and expensive. Steer clear of startup loans until you have a well-thought-out business plan in place — even the best ideas require careful implementation. And remember that there are plenty of options at every stage of the business process, so read our guide to business loans for an overview of how funding your startup works.

      Not quite a startup? Compare other business loan options

      Data updated regularly
      Name Product Filter Values Loan amount APR Requirements
      Lendio business loans
      Finder Rating: 4.75 / 5: ★★★★★
      Lendio business loans
      $500 – $5,000,000
      Starting at 6%
      Operate business in US or Canada, have a business bank account, 560+ personal credit score
      Submit one simple application to potentially get offers from a network of over 300 legit business lenders.
      SmartBiz business loans
      Finder Rating: 4.3 / 5: ★★★★★
      SmartBiz business loans
      $30,000 – $5,000,000
      4.75% to 7.00%
      650+ personal credit score, US citizen or permanent resident, 2+ years in business, $50,000+ annual revenue, no outstanding tax liens, no bankruptcies or foreclosures in past 3 years
      Get funding for your small business with a government-backed loan and extended repayment terms.
      LendingClub business loans
      Finder Rating: 4.5 / 5: ★★★★★
      LendingClub business loans
      $5,000 – $500,000
      12.15% to 29.97%
      12+ months in business, $50,000+ in annual sales, no bankruptcies or tax liens, at least 20% ownership of the business, fair personal credit score or better
      With loan terms that vary from 12 to 60 months, enjoy fixed monthly payments and no prepayment penalties through this award-winning lender.
      Monevo business loans
      Monevo business loans
      $500 – $100,000
      3.99% to 35.99%
      Credit score of 500+, legal US resident and ages 18+.
      Use this connection service to get paired with a loan you can use for business.

      Compare up to 4 providers

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      4 Responses

        Default Gravatar
        FaratziAugust 1, 2017

        How much can I borrow from a private lender? Until what amount he can give me with my house property as a collateral? Where can I find private lenders that give big amounts of money for business and for buying my instruments, an amount of 1 million with my house property as a collateral?? I want to find a real one because there are a lot of frauds. I am waiting for your urgent response. Thank you!

          Default Gravatar
          DanielleAugust 2, 2017

          Hi Faratzi,

          Thank you for contacting Finder. We are a comparison website and general information service, we’re more than happy to offer general advice.

          Generally, large loan amounts usually have specific eligibility criteria which include a minimum income requirement as this is one way for lenders to make sure their borrowers have the capacity to repay their loan amount. Lenders will also take into consideration your credit standing, employment status, outstanding loan and other liabilities in their decision-making.

          You can compare business loans for options that may suit your needs. You may review and compare the offers available on the table. Once you have selected one, you may proceed by clicking the green “Go to Site” button.

          I hope this helps.


        Default Gravatar
        LaurelJuly 13, 2017

        Currently I am on employed but intend to start my own online business as an affiliate marketer through a well established training program called Aspire. I have absolutely no personal funds to use to pay for their training program which costs $2000. Although they cannot guarantee instant income, their average affiliates start making $8000 per month in the first 90 days. Also, my credit rating is approximately 560 right now. Where can I possibly get a $2-3,000 start up business loan to start my business?

          Avatarfinder Customer Care
          HaroldJuly 16, 2017Staff

          Hi Laurel,

          Thank you for your inquiry.

          Many business lenders require that your business has been established for at least six months and that it’s meeting certain revenue minimums. There are some lenders who may consider your business plan and personal credit profile in lieu of business experience to evaluate your loan application and asses risks. We do have a guide about startup loans that will help you understand how you can get a business loan in the early stages. You could also get a personal loan to start a new business.

          I hope this information has helped.


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