Startup Funding Options
How to finance a new business when you have no revenue history.
Startup Funding: Get Capital Before You Have Revenue
Funding a startup is the biggest chicken-and-egg problem in business. This hub covers every option — from personal savings and SBA microloans to angel investors and revenue-based financing — ranked by accessibility and cost.
Funding Ladder (Least → Most Expensive)
- Personal savings and bootstrapping
- Friends and family loans (document everything)
- SBA Microloans and CDFIs
- Business credit cards (0% intro APR)
- Online lenders and MCAs (last resort)
Articles
Equipment Financing for Small Business: A Complete Guide
A complete guide to equipment financing for small businesses, covering financing vs. leasing, types of equipment, qualification requirements, rates, and tips for getting the best deal.
Working Capital Loans Explained: Everything You Need to Know
Everything you need to know about working capital loans: types, uses, qualification requirements, costs, and how to choose the right product for your business.
SBA Loans vs. Alternative Lending: Which Is Right for You?
A comprehensive comparison of SBA loans and alternative lending, covering loan types, pros and cons, qualification criteria, and guidance on choosing the right option for your business.
Business Loan Requirements: What Lenders Look For
A detailed breakdown of what lenders look for when evaluating business loan applications, including credit scores, revenue requirements, documentation, and tips to strengthen your profile.
How to Get a Small Business Loan in 2026: Complete Guide
A comprehensive step-by-step guide to securing a small business loan in 2025, covering loan types, requirements, the application process, and tips for approval.
Common Questions
What credit score do I need for a business loan?
Most traditional bank loans require a personal credit score of 680 or higher. SBA loans typically need 650+, while online lenders may approve scores as low as 500-550 with higher interest rates. Your business credit score, revenue history, and time in business also factor heavily into approval decisions.
What is the difference between an SBA loan and a traditional bank loan?
SBA loans are partially guaranteed by the Small Business Administration, which reduces risk for lenders and often results in lower interest rates and longer repayment terms. Traditional bank loans have no government backing but may fund faster. SBA loans typically take 30-90 days to close versus 1-3 weeks for conventional bank loans.
How long does it take to get approved for a business loan?
Timeline varies by lender type: online lenders can approve in 24-48 hours, traditional banks take 2-4 weeks, and SBA loans typically require 30-90 days. Having your documents prepared — tax returns, bank statements, financial projections, and business plan — significantly speeds up the process.
Is a merchant cash advance worth it?
Merchant cash advances provide fast funding but at a steep cost — factor rates of 1.2 to 1.5 translate to APRs of 40-350%. They work best as a last resort for businesses with strong daily card sales that need emergency capital. For most situations, a business line of credit or short-term loan offers far better economics.
Key Terms
SBA Loan
A business loan partially guaranteed by the Small Business Administration, reducing lender risk. Common programs: 7(a) (general purpose, up to $5M), 504 (real estate/equipment, up to $5.5M), and Microloans (up to $50K). Lower rates and longer terms than conventional loans but slower approval.
Working Capital
Current assets minus current liabilities — the cash available for daily operations. Positive working capital means you can cover short-term obligations. Working capital loans and lines of credit address temporary shortfalls. Chronic negative working capital signals deeper financial problems.
Cash Flow
The net movement of money in and out of a business over a period. Positive cash flow means more money coming in than going out. Cash flow ≠ profit — a profitable business can fail if cash timing is wrong. Lenders scrutinize 12-24 months of bank statements to assess cash flow health.
Business Line of Credit
A flexible borrowing facility allowing draws up to a preset limit, with interest charged only on the outstanding balance. Ideal for managing cash flow gaps, seasonal inventory, and unexpected expenses. Revolving lines reset as you repay; non-revolving lines are one-time. **Installment or revolving?** A business line of credit is **revolving** credit (the same category as a credit card): repaying a draw restores your available limit, so you can borrow again without a new application. That is the key difference from a term loan, which is **installment** credit paid down on a fixed schedule and closed when repaid. A "non-revolving" line is the exception: it lets you draw in pieces up to a cap, but repaid amounts do not become available again. **How draws are repaid:** most lines charge interest only on what is drawn, billed weekly or monthly; some online lenders convert each draw into its own short amortizing schedule (6, 12 or 18 months), which behaves like a series of mini installment loans inside a revolving limit. Annual or monthly maintenance fees, draw fees, and inactivity fees are common, so compare the total cost of a typical draw rather than the headline rate. **Secured vs unsecured:** bank lines are often secured by a blanket lien or receivables and priced lower; online lines are usually unsecured, faster to open, and more expensive. Lines typically renew annually and the lender can reduce the limit if your financials weaken. See also: revolving credit facility, term loan, draw period.