Best Small Business Loans for Startups in 2023

Selecting the top small business loan for your startup allows you to focus more on managing your company. There are countless small business lenders that will lend you money. 

We reviewed and ranked the top small business loans for startups. We set out to find the best one by thoroughly researching five of the most popular lenders: Accion, Lendio, OnDeck, Fundbox, and Kiva.

Our Approach:

Choosing the best business loan for a startup comes down to three things:

1. Needs of your business
2. What you want for the future of your business
3. Whether or not your business meets loan requirements

In this business loan review, we’ll look at some of the top small business loans for startups and share what makes them the right choice. We’ll explore the financing details of each loan, along with pros, cons, and more. By the time you finish reading this review, you’ll know which business loan is best for your startup.

Our Top 5 Business Lenders for Startups:

1. Accion offers the best loans for startups because, in addition to lending, they provide further advice, strategies, and support to help entrepreneurs qualify for a loan if they haven’t yet.
2. Lendio is the best overall lender for startups because they make business lending convenient and hassle-free.
3. OnDeck is best for startups with bad credit because they offer workable repayment options and easy approval.
4. Fundbox is best for startups needing quick cash to fund a short-term project.
5. Kiva is best for startups that need microloans because it is mission-oriented and you don’t have to worry about repaying interest on the loan.

Accion is a lender we think you should check out. They are a good fit for startup businesses that need less than $50,000 in capital and that need a great rate to be able to afford the loan. Accion started over 50 years ago and has grown into a reputable nonprofit lender that lends money to many types of startups.

Here are some of the businesses Accion lends money to:

• Loans for women-owned businesses
• Loans for minority-owned businesses
• Loans for food and beverage businesses
• Loans for startup businesses
• Loans for small businesses
• Loans for veteran-owned businesses
• Business loans for people with disabilities
• Loans for green businesses

Here is a quick summary of Accion business loans:

• Term Loans
  • Lowest rate: 8.99%
  • Loan sizes up to: $50,000

Accion Business Loan Qualifications:

• 576+ FICO score
• An alternative source of income for repaying the loan
• No personal debts
• The loan amount will depend solely on your business needs

Accion Pros

• Just 576+ FICO to qualify for a term loan
• Money can be used for any business expense
• Free up your cash
• Transparent fees
• Easy approval in 5-10 days
• Don’t need collateral

Accion Cons

• Need to be in business two years to qualify for $50,000
• No bankruptcy for 24 months
• No more than $3,000 in past due debts
• Must demonstrate you can repay the loan

If you are a startup business that needs a loan, any type of loan, you might want to check out Lendio. They are a good fit for startup businesses that don’t have a lot of time to apply for a loan and for businesses that need a loan fast. Prior to the COVID-19 pandemic, Lendio had over 75 lending partners that would compete for your business.

Here is a quick summary of Lendio business loans:

Lendio is not actually a lender themselves, but they do partner with approximately 15 private lenders that offer every type of business loan available. Lendio helps any type of business get funding for any reason.

Here’s some information to help you decide if Lendio is the right place to apply for a loan:

• Interest rates: Varies depending on the type of loan, business needs, and other factors. There are no set minimums.
• Average loan size: $96,000

Lendio Business Loan Qualifications:

• 500+ credit score
• 2+ years in business preferred
• Six months bank statements
• Business checking account

Lendio Pros

• Low credit score approval
• Money can be any business expense
• Free up your cash
• Transparent fees
• Easy, fast approval
• Don’t need collateral
• Average loan is $96,000
• Get better rates as lenders are competing for your business
• Great customer support

Lendio Cons

• Six months of bank statements
• Two years of tax returns
• Soft credit check before being approved
• Fewer lending partners than prior to COVID-19

OnDeck offers term loans and lines of credit for businesses of any size but primarily works with startups. They offer loans up to $50,000 and interest rates that start at 10% per year.

The main drawback to OnDeck is that you’ll need to have a 700+ personal credit score to get approved for a loan, but if your business credit is bad, you can still get approved. This may be deemed advantageous, though, considering most lenders take into account your business credit over your personal credit rating.

Here is a quick summary of OnDeck business loans:

• Term Loan
  • Lowest rate: 10%
  • Loan sizes up to: $50,000
• Line of Credit
  • Lowest rate: 10%
  • Loan sizes up to: $50,000

OnDeck Business Loan Qualifications:

• 700+ Equifax and Experian credit score
• 2+ years in business preferred
• Strong financials

OnDeck Pros

• Money can be used for most business expenses
• Free up your cash
• Transparent fees
• Easy approval
• Don’t need collateral
• Help you build business credit
• Tailored loans
• Loyalty benefits

OnDeck Cons

• Need 700+ Experian and Equifax score to qualify for a term loan
• Need 700+ Experian score to qualify for a line of credit
• Need an established business credit to qualify
• High interest rates compared to other lenders

If you’re a business that needs funding or suspects that at some point you’ll need a business loan, then you may want to consider a lender that can get you quick cash to manage your business when cash flow gets tight. We did some research and found that Fundbox is a great choice if you need a line of credit in a pinch. As a startup, you may want to look into Fundbox because you’ll need to pay your vendors, employees, and other “unexpected” business expenses to ensure you rightly establish your business credit.

Fundbox offers line of credit loans, which are easy to qualify for, offer flexible loan terms, and are best for taking care of short-term needs for your business. 

Here is a quick summary of Fundbox business loans:

• Line of Credit
  • Lowest rate: 4.66%
  • Loan sizes up to: $100,000

Fundbox Business Loan Qualifications:

• 500+ credit score
• 3+ months in business
• $25,000 in annual revenue

Fundbox Pros

• Larger credit limits
• Free up your cash
• Only fund what you want
• Transparent fees
• Easy approval
• Funds available on demand
• Access to a revolving credit line
• Only pay for what you use
• No early repayment penalty
• Auto debit from your bank account

Fundbox Cons

• Not a long term finance solution
• No early payment incentive
• Pay most of the interest on the front-end of the loan

A microloan may be what you’re looking for if you’re a startup business needing less than $15,000. There are plenty of lenders that offer microloans, but one stands out above the rest: Kiva. What makes Kiva different from most other lenders is their peer-to-peer lending platform and nonprofit mission to help reduce poverty by helping small businesses and startups to thrive. Kiva operates around the world, making it a great choice for businesses located anywhere around the world.

Microfinance loans like the ones offered by Kiva are useful when a business owner needs a small amount of capital to quickly generate business income, to manage and grow the business.

Here is a quick summary of Kiva business loans:

• Microloan
  • Lowest rate: 0%
  • Loan sizes up to: $15,000

Kiva Business Loan Qualifications:

To qualify for a Kiva business loan, you are required to:

• Conduct business in the U.S.
• Be at least 18 years old
• Be using the loan for business purposes

Kiva Pros

• Money can be used for any business expense.
• Zero interest loan
• Frees up cash flow
• Repayable over 36 months

Kiva Cons

• Smaller loans
• Kiva doesn’t report to credit bureaus.
• If your loan is only partially funded, you get nothing.
• You’re responsible for helping the loan get funded.

Startups often find financing a slippery slope, given most lenders require a business to have been operating for a considerable amount of time to determine creditworthiness. These lenders we’ve presented are the best for startups because they work with new businesses to help them succeed.

The best on this list is Lendio, given they aren’t actually a lender but rather a third-party intermediary who works with small businesses to help them get financing through their vast network of lending partners. A nice benefit to all this is that Lendio doesn’t charge businesses for the consulting, advice, and help they provide. They get paid on the backend after loans are approved through the lender.