Finding the best startup business loans to finance your startup company can be difficult. Just because you have a great idea, doesn’t mean that you have a business. More likely than not you will need some funding to get your idea off the ground. Finding the right sources to finance it is critical to your business’ success.
Don’t worry though. There are plenty of digital financing solutions that can help you start and grow your business. There are multiple loan providing platforms which allow you to quickly access loans based on your particular needs. And these platforms are also quite diverse in their specialization of finance provision solution.
The reason why finance platforms and digital loan providers have become the preferred method of business financing is because these platforms are much more streamlined and also allow for a higher amount of flexibility regarding accessibility to loans. With the help of a digital business loan provider you can gain access to credit lines, finance invoices, get a P2P loan, and even draw a lump sum amount as well. These platforms are also known for providing competitive interest rates and great repayment schemes.
So, are you a small business owner who believes they can achieve more but the lack of funding is holding you back? If you pick the right financing platform all your business financing problems can be solved with no hassle at all.
In this article we’ll show you the best startup business loans for bad credit and list some of the major online platforms that you can use to finance your small business or startup. Each of them is unique in their own way and thus you must study each one carefully before deciding which one suit your business prospects and also provides the amount required to finance your business needs.
Compare the Top Startup Loans for Small Businesses in 2020
Here’s a list of the best small business loans for startups that will help you finance your startup and get it running.
Lendio
Lendio is less of a fundraiser and more of a fundraising platform that matches businesses with interested investors. But the reason Lendio is one of the most popular platforms amongst smaller businesses seeking loans is because it hosts certain big funders such as Kabbage, Amex, BlueVine, etc. So, if you are an owner of a small business chances are that you can get a big investor to invest in your ideas through Lendio.
Pros
- Find legitimate investors with ease.
- Choose the best offer from a range of offers.
- Helpful customer service.
- Easy for beginners.
Cons
- Lendio does not raise funds by itself, so no absolute guarantee of funds.
- Closed list of investors.
- Alternative lending not always a solution for many businesses, especially startups.
Features
- Lendio offers a variety of loans for small businesses such as short-term loans, cash advances, SBA loans, project financing services, etc.
- Any and all businesses can use Lendio’s platform to fund their projects, but the platform does not promise guaranteed funding.
- No fee is required to use the platform so it’s a great place for small businesses to find investors without having to spend money.
BlueVine
BlueVine is a direct loan provider to small and medium sized businesses. It provides up to $5 million in capital to businesses and in the process a total credit line of $250,000 can be owned by a business. More than 15,000 small businesses have achieved at least $2 million worth of funding from BlueVine. If your start-up has already gained some market momentum BlueVine funds can be used to achieve larger goals as it provides larger loans that serve as constant cash flow.
Pros
- Variety of funding options to choose from.
- Separate option for start-up businesses.
- Upfront term loans.
- Credit limit increment along with business increment.
Cons
- Not a good option young start-up.
- Multiple fees.
- FICO score of 530 is necessary for accessing funds.
Features
- Businesses can achieve funding through BlueVine exactly where they require it. The amount given is a rotating credit and not a lump sum one-time funding.
- A business must earn at least $10,000 per month in revenue and have a FICO score above 530 in order to apply for loans. They also need to be operational for at least 6 months before applying.
- The service in provided across 48 American states with the exception of North and South Dakota.
Fundbox
Fundbox is a really great and easy to use funding platform that allows for access to quick loans. It provides invoice-based financing services alongside other lines of credit. You can sign up easily for accessing funds from Fundbox regardless of your credit score and business age. The growing B2B industry has proven to be a frequent user of Fundbox’s services for expansion and invoice clearance purposes. If you are looking for quick small funding for your business, Fundbox is an easy solution.
Pros
- Easy application process.
- Quick access to funds.
- No credit score requirement.
- Multiple financing options.
Cons
- Small funding amount.
- Not good for mid-sized businesses.
- Multiple fees.
Features
- Business owners simply need to sign up on the platform and provide access to their invoicing app and funds will be provided for outstanding invoices.
- Fundbox Pay option allows buyers to make immediate purchases for a certain transaction fee.
- You need to have all your invoices stored in a software such as eBillity, Xero, Zoho, etc. in order to use Fundbox.
Kabbage
Kabbage is widely known as the fastest source of money for small businesses. You can potentially apply and get information on rates and fees and receive the loan almost instantly. However, Kabbage charges quite high fees for its loans. Its per month fee system is one of the highest among lenders to small businesses and repayments need to be made monthly as well. The application also comes with a spending card that allows you to spend the loan amount directly as required.
Pros
- Fast loans meant for small businesses.
- Maximum ease of use.
- Fee and interest rate calculated based on credit score.
- No minimum FICO score requirement.
Cons
- Minimum operational period of 12 months necessary for application.
- High interest rate on loans.
- Multiple fees.
Features
- You can sign up on Kabbage, give it access to your finance details, and use its loan calculator to check the possible loan amount you can receive and at what interest rate. Following this you can apply for the loan.
- The loans you will receive will be in line of credit, so they will usable as you wish.
- Repayments will need to be made monthly for 6, 12, or 18 months.
Funding Circle
This platform is known for providing competitive rates in the market. Its loans are usually medium-term ones, with the terms ranging from anywhere between 6 months to a few years. Many businesses that prefer hassle free nonbank based loans are known to use funding circle. Also, if you are looking for P2P lending options, Funding Circle is once again a great provider of such services. It is however not a platform meant for startups since it requires minimum 2 years of business time before application.
Pros
- Competitive rates and loan terms.
- No penalties or hidden fees.
- Great P2P lending opportunity.
- Great customer support.
Cons
- Not startup friendly.
- Multiple requirements for application.
Features
- If you own a business that has been operational for at least two years, then you can potentially receive a medium-term loan from Funding Circle.
- The interest rate is calculated based on your business’ credit score and general performance.
- Interest rate is also calculated based on the term of the loan.
- Prepayments need to be made monthly and all information can be calculated using their onsite calculator.
Kiva
Kiva is a unique business loan app that charges no interest on its loans. The platform only provides microloans up to $10,000 making it suitable only for young startups. There is no funding partner when it comes to Kiva and the company provides loans based on a business’ social and community involvement rather than credit score and other market details. Kiva has become a well trusted source of microloans in the startup industry and it is widely preferred for its no interest policy.
Pros
- No interest rate on loans.
- No minimum FICO score requirement for application.
- No penalties or hidden fees.
- Great customer service.
Cons
- Time consuming process.
- Only micro-loan availability.
- Not suited for medium sized businesses.
Features
- If you own a startup that is even less than a year old you can get a micro-loan from Kiva, but the process may take up to 2 months.
- It is the characteristics of your business that will decide the micro-loan amount you can apply for.
- There is no borrowing fees or interest rate, but you of course have to return the loan within stipulated time and failure to do so will affect your credit score.
Accion
Originating in the 60s as a grassroots organization that provided micro-loans to the low-income population, it is now a widespread provider of small loans to businesses. Accion is the only loan provider that uses geographical location as a base for providing loans. If you own a startup or a small business, getting a loan from Accion should be quite easy as long as your credit score is above 575. There are a few fees that you will need to pay, however the platform does not charge any prepayment penalty.
Pros
- Minimal qualifications required for application.
- Startup friendly.
- No penalty on missing prepayment dates.
- Great customer service.
Cons
- High interest rates.
- State based loans.
Features
- Accion’s offered loans vary from state to state. So, you will need to know which of its loans you can access depending on the state you live in.
- The borrower requirements also vary but none of them require any previous business timeline. However, your business needs to be generating sufficient revenue in order to process the loan.
- The loans are processed in installments, and repayments can be done through multiple means such as online, direct payment through bank, etc.
OnDeck
OnDeck uses intelligent systems to decide their investing capabilities. The firm is best known for its revolving credit loans and many of their clients are usually repeat borrowers. There are certain requirements that you need to qualify in order to apply for loans from OnDeck. You can use OnDeck’s loans for any financing requirement, but their interest rates might be a bit higher than the industry standard.
Pros
- Quick access to loans.
- Discount on prepayments.
- Basic requirements for application.
- Repeat loan services.
Cons
- Higher interest rates.
- Minimum 12 months of business history for loan application.
Features
- Once you apply OnDeck’s mechanized selection system will decide whether you are eligible for their loans following which you can quickly access the loans.
- You will be required to pay an origination fee and it will be taken out of the loan amount. This is the only fee they charge in their entire process.
- You can apply for loans repeatedly and OnDeck is most likely to accept your applications based on previous performance and prepayment capability.
CanCapital
This platform is known for being one of the best MCA (merchant cash advance) loans. These are finances provided against a section of future profits from the receiving business. CanCapital also offers non-MCA loans mostly on short terms. MCA loans are the most opted for alternative loans especially by startups. So, your small business can easily gain an MCA from CanCapital by pledging a portion of your future earnings.
Pros
- Best MCA loan policy.
- Startup friendly.
- Flexible rates.
- Easy to apply.
Cons
- No long term loans.
- Maximum loan amount $150 thousand.
Features
- If you are applying for MCA loans from CanCapital your fee will be calculated based on your factor rate and the principal amount.
- Instead of an APR, the factor rate defines your prepayment period. This process is unique to CanCapital.
- In case you are able to repay the loan early on you can access certain rebates on the entire amount thereby potentially saving money by taking a loan.
- Short term loans from CanCapital are repaid on a daily basis.
QuarterSpot
If you require a loan which you are sure that you can repay early on, then QuarterSpot might be your best choice for a small business loan. This platform allows you to save a lot of money if you make your payments early on and this also helps boost your credit score. There are certain qualifications that you are required to meet in order to apply, but the interest rates are not too high. There are also certain geographical restrictions regarding applying from QuarterSpot.
Pros
- Discounts on early repayments.
- Transparent process.
- Helps fix bad credit score.
- Easy to use.
Cons
- Certain additional fees.
- Not startup friendly.
Features
- If your business is at least a year old, then you can apply for a loan from QuarterSpot. There are also a few other minor criteria.
- A flat fee will be charged on short term loans instead of the usual interest rate. This flat fee is calculated before providing the loan, so you have a transparent view of the process.
- QuarterSpot provides various means of saving on their fees and on the repayment process in general, which makes it a great choice for small business loans.
SmartBiz
This is another platform that performs the service of connecting businesses with investors. It uses a highly streamlined system that you can use to find financing solutions. There are quite a few eligibility criteria so make sure that you review them carefully before applying since the application process can be lengthy. And while it claims that its SBA process is streamlined, it is still quite lengthy and requires a host of documents from you. But even then, when it comes to SBA based loans, SmartBiz is your best choice.
Pros
- Fit for all sizes of businesses.
- No penalties or hidden fees.
- Streamlined process.
- Great SBA process.
Cons
- Lengthy application process.
- Strict application requirements.
- Not startup friendly.
Features
- If your business has been active for at least two years and has a credit score of 650 than you can find a potential investor through SmartBiz.
- SmartBiz supports a variety of industries and connects industry specific investors to businesses.
- SmartBiz has varying interest rates for its loans and most of them are quite competitive.
These are some of the best ways to achieve quick loans for your small business or start-up. This is an industry which is facing massive growth in current times, and as a result finding a direct finance solution or an investor should be hassle free through these portals.