Startup business loans: what a new business can really get

Lenders usually call a business a startup if it has been operating for less than two years [1]. Banks and credit unions are less likely to lend to one, because it has not yet proven it can repay debt [1]. Online and alternative lenders are more open, but tend to charge more and lend for shorter terms [1].

With little business history to judge, lenders judge you. The SBA notes that loan eligibility for a new business is typically based on the owner's personal credit score [4]. Before you apply anywhere, pull your personal credit reports, fix any errors and pay down card balances where you can. That one step changes which column of the table above you land in.

• SBA microloans. Up to $50,000 for working capital, inventory, supplies, furniture, fixtures, machinery and equipment, from nonprofit lenders [2]. Rates generally run 8% to 13% and the longest term allowed is seven years [2]. They cannot pay existing debts or buy real estate [2].
• SBA 7(a) loans. Starting a business is an allowed use [3], but these loans typically go to established firms with steady revenue and collateral; firms under two years received 14.3% of 7(a) loans in FY 2026 [1]. Ask a bank you already use about its SBA rules for startups [1].
• CDFIs and nonprofit lenders. Community development lenders operate in every state and many add free training [1]. Many focus on underserved owners and communities [1].
• Equipment financing. If you need machines, vehicles or tools, the equipment secures the loan, so you usually do not need extra collateral [1].
• Online lenders. Many accept businesses with three months of history [1], at online prices.

For small, everyday costs, a business credit card is another startup route. NerdWallet lists it as a choice for startups and for daily expenses, with approval based largely on your personal credit history, and warns that carrying a balance brings interest [8]. Pay it in full each month and it doubles as a way to start a business credit record.

NerdWallet suggests treating a merchant cash advance as a last resort for a startup, given daily collections and costs that can reach well into triple-digit estimated APRs [1]. An MCA is a purchase of future receivables, not a loan, and it needs steady sales to collect from, which a brand-new business may not have yet.

Here is the honest answer: very few lenders will fund 100% of a new business with nothing from the owner. A lender wants to share the risk with you, not carry all of it. For example, a typical SBA 504 project, used for buildings and major equipment, includes a contribution from the borrower of at least 10% of the total project cost [3].

"No money" rarely means no options, though. Here is what tends to work, roughly in order:

1. Start smaller. Launch a version of the business you can fund yourself, then borrow once you have sales to show [1].
2. Count what you already own. Equipment, inventory or receivables can secure a loan and strengthen the application [1].
3. Bring a co-signer with good credit and assets, knowing their credit is on the line too [1].
4. Apply for an SBA microloan through a local nonprofit lender, which is built for small, new businesses [2].
5. Use self-funding carefully. The SBA lists savings, family and friends, and even retirement accounts as ways owners fund a start, and warns that tapping retirement early can bring fees and penalties [4].
6. Try crowdfunding, which the SBA describes as low risk for owners because you typically keep full control and do not repay backers if the plan fails [4].

If you have no revenue yet, your business plan does the work a bank statement would. NerdWallet suggests three years of projected financial statements to show how you plan to repay [1].

1. Decide the amount and the use. Work out what you can repay without breaking your cash flow [1].
2. Check where you stand on credit, time in business and revenue, and see business loan requirements for each product's bar.
3. Write the plan, with a funding request that says how much, on what terms, and what it pays for [1].
4. Gather documents: your EIN and business details, and financial and bank statements if you are already operating [1].
5. Expect to sign a personal guarantee or allow a UCC lien on business assets [1].
6. Compare offers by APR and total fees, not just the rate, and read the agreement before you sign [1].

If you are turned down, ask why. A credit issue can be worked on, collateral or a co-signer can lower the lender's risk, and online, microloan or CDFI lenders may still say yes at a higher price [1].

The New Jersey Small Business Development Center network offers no-cost, one-on-one consulting from business experts, for new ventures as well as growing firms [5]. Its consultants can help with the plan, the projections and the cash flow analysis a lender will read, and it runs workshops on writing a business plan [5]. You choose your county on its site to reach the nearest office [5].

Batch Capital, our funding team, can tell you which of the options above a business at your stage is likely to qualify for, and what each would cost in dollars, before anyone pulls your credit.