Securing small business loans for startups is one of the biggest challenges new entrepreneurs face. Without a proven track record, established business credit, or significant collateral, traditional bank loans are often out of reach.
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The good news? Many funding programs are designed with startups in mind. From SBA microloans and community lenders to fast fintech platforms, some options work for early-stage businesses—if you know where to look.
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This guide covers the best small business loans for startups in 2025, including loan types, eligibility, costs, and how to apply—so you can match your funding strategy to your stage and goals.
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What Makes a Startup Loan Different?
Unlike loans for established businesses, startup loans focus heavily on:
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Personal creditworthiness
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Business plan quality
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Projected cash flow
Why they’re unique:
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Limited business history: Some lenders require just 0–6 months in business.
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Personal guarantees: Founders are often personally liable for repayment.
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Flexible collateral rules: Many programs waive traditional collateral.
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Higher risk profile: Rates can be higher due to startup risk.
Top Small Business Loans for Startups
1. SBA Microloans
The SBA Microloan Program offers loans of up to $50,000 through nonprofit intermediary lenders. It’s ideal for startups with strong business plans and manageable capital needs.
Key Facts:
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Loan amount: Up to $50,000 (average $13,000)
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Typical APR: 8%–13% (varies by intermediary)
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Repayment term: Up to 6 years
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Collateral: Often required, but flexible
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Eligibility: No strict time-in-business requirement; must have a feasible business plan
Pros: Low interest rates, mentorship support from lenders, flexible uses (equipment, working capital, inventory)
Cons: Smaller funding amounts, longer approval process than online lenders
Best For: Founders needing modest startup capital with favorable repayment terms
2. Community Development Financial Institutions (CDFI) Loans
CDFIs are nonprofit lenders focused on underserved entrepreneurs, often with less stringent credit and collateral requirements.
Key Facts:
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Loan amount: $5,000–$250,000
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Typical APR: 6%–15%
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Repayment term: 1–7 years
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Eligibility: Can work with limited revenue or lower credit scores (as low as 600)
Pros: Mission-driven support, business coaching, acceptance of alternative credit histories
Cons: Approval times vary; documentation requirements can be high
Best For: Startups in underserved communities or owners with nontraditional credit backgrounds
3. SBA Community Advantage Loans
This pilot program (extended through 2025) helps startups in underserved markets with loans of up to $350,000.
Key Facts:
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Loan amount: $50,000–$350,000
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Typical APR: Prime + 6% max
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Repayment term: Up to 10 years
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Eligibility: Accepts early-stage businesses; focuses on low-income and rural areas
Pros: Larger funding amounts than microloans, competitive rates
Cons: Limited participating lenders, application can be slow
Best For: Startups in eligible areas needing significant capital
4. Online Term Loans (Fintech Lenders)
Fintech companies like OnDeck, Funding Circle, and BlueVine offer quick-access loans, often funding in 1–3 days.
Key Facts:
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Loan amount: $5,000–$500,000
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Typical APR: 15%–45% (sometimes higher for high-risk borrowers)
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Repayment term: 6 months–5 years
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Eligibility: Often 6+ months in business, $25k–$50k annual revenue minimum
Pros: Fast approvals, minimal paperwork
Cons: Higher rates than SBA or CDFI loans
Best For: Startups needing quick funding for urgent needs
5. Business Credit Cards as Startup Capital
While not a traditional loan, 0% APR business credit cards can be a low-cost way to fund early expenses.
Key Facts:
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Credit limit: $5,000–$50,000+(varies by credit score)
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Intro APR: 0% for 6–18 months on purchases
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Eligibility: Good personal credit (680+)
Pros: Instant access, rewards programs
Cons: High post-intro APRs, risky if unpaid by promo end
Best For: Founders disciplined in repayment who need flexibility
6. Revenue-Based Financing (RBF)
With RBF, you repay a percentage of monthly revenue until a set total is reached.
Key Facts:
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Loan amount: $20,000–$5M
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Typical cost: 1.3–1.8x the principal
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Eligibility: Recurring revenue model preferred
Pros: Flexible payments that scale with sales
Cons: Can be expensive; not ideal for low-margin startups
Best For: SaaS or e-commerce startups with strong sales growth
Cost Comparison Table (2025 Estimates)
| Loan Type | Loan Amount Range | Typical APR/Cost | Repayment Term | Speed to Funding | Best For |
|---|---|---|---|---|---|
| SBA Microloan | $5k–$50k | 8%–13% | Up to 6 years | 1–4 weeks | Modest capital needs |
| CDFI Loan | $5k–$250k | 6%–15% | 1–7 years | 2–6 weeks | Underserved founders |
| SBA Community Advantage | $50k–$350k | Prime + ≤6% | Up to 10 years | 3–6 weeks | Rural/low-income startups |
| Online Term Loan | $5k–$500k | 15%–45% | 6 mo–5 yrs | 1–3 days | Urgent needs |
| Business Credit Card | $5k–$50k+ | 0% intro → 15%–29% | Revolving | Instant | Flexible early expenses |
| Revenue-Based Financing | $20k–$5M | Factor 1.3–1.8 | Variable | 1–2 weeks | High-growth revenue startups |
Eligibility Comparisons
| Factor | SBA Microloan | CDFI Loan | Online Term Loan |
|---|---|---|---|
| Time in Business | 0–12 mo | 0–12 mo | 6–12 mo |
| Personal Credit | 620–650+ | 600+ | 600–650+ |
| Annual Revenue | None | Low ($25k+) | $25k–$50k+ |
| Collateral | Often required | Flexible | Rarely |
Application Best Practices for Startup Loans
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Prepare a Business Plan—Even online lenders appreciate a clear roadmap.
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Separate Personal and Business Finances—Open a business checking account before applying.
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Check Your Credit Score—This often determines both eligibility and rates.
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Gather Documentation:
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Business plan & projections
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Personal ID & tax returns
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Bank statements (personal or business)
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Apply to Multiple Lenders—Compare at least 3 offers to avoid overpaying.
How to Choose the Right Startup Loan
Ask yourself:
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How much do I need, and for what purpose?
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Can I afford the repayment schedule?
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Do I value speed or low cost more?
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Am I comfortable offering personal collateral?
FAQs – Small Business Loans for Startups
Q: What are the best small business loans for startups in 2025?
A: The top options include SBA microloans, CDFI loans, and SBA Community Advantage loans for lower cost; fintech loans for speed; and business credit cards for flexible early expenses.
Q: Can I get a small business loan for a startup with no revenue?
A: Yes. SBA microloans, many CDFI loans, and certain business credit cards cater to pre-revenue businesses if you have strong personal credit and a solid business plan.
Q: Which loan is easiest to qualify for?
A: CDFI loans and certain business credit cards often have the most flexible requirements, especially for founders with limited credit history.
Q: Are online lenders worth it for startups?
A: Yes, if speed matters. However, compare APRs carefully, as fintech rates can be higher than SBA or CDFI options.
Conclusion
The best small business loan for a startup depends on your stage, credit profile, and funding needs. SBA microloans and CDFI loans offer the lowest rates and supportive terms for early-stage businesses, while fintech lenders provide fast access to capital when timing is critical.
Choose the option that balances cost, speed, and flexibility—so you can grow without unnecessary financial strain.
For a complete understanding of other funding options, explore related guides:
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