Best Small Business Loans for Startups in 2024

Best Small Business Loans for Startups in 2024 Starting a business is exciting, but securing funding can be challenging, especially for startups with limited credit history or revenue. Fortunately, several lenders offer small business loans tailored to startups. In this guide, we’ll explore the best small business loans for startups, including traditional bank loans, SBA loans, online lenders, and alternative financing options.

Why Do Startups Need Business Loans?

Startups often require funding for:

• Initial setup costs (equipment, inventory, office space)
• Working capital (day-to-day operations)
• Marketing and advertising
• Hiring employees
• Expansion and scaling

Since startups lack an established financial track record, securing loans can be difficult. However, some lenders specialize in funding new businesses.

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Best Small Business Loans for Startups in 2024

1. SBA Loans (U.S. Small Business Administration)

Best for: Startups with strong credit and a solid business plan
Loan Amount: Up to $5 million
Interest Rates: 6% – 13%
Repayment Terms: 5 – 25 years

The SBA 7(a) loan is one of the most popular options for startups. While the SBA doesn’t lend directly, it guarantees loans from approved lenders, reducing risk and making it easier for startups to qualify.

Pros:

• Low-interest rates
• Long repayment terms
• High loan amounts

Cons:

• Strict eligibility requirements
• Lengthy approval process (weeks to months)

Best for: Startups that can wait for funding and have strong credit (680+).

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2. Bank Term Loans

Best for: Established startups with good credit
Loan Amount: 10,000–10,000–1 million
Interest Rates: 5% – 30%
Repayment Terms: 1 – 10 years

Traditional banks like Bank of America, Chase, and Wells Fargo offer term loans for startups with strong financials.

Pros:

• Competitive interest rates
• Predictable repayment schedules

Cons:

• Requires excellent credit (700+)
• Collateral may be needed

Best for: Startups with strong credit and collateral.

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3. Online Business Loans

Best for: Fast funding with flexible requirements
Loan Amount: 5,000–5,000–500,000
Interest Rates: 8% – 99% (varies by lender)
Repayment Terms: 3 months – 5 years

Online lenders like BlueVine, Fundbox, and Kabbage provide quick funding with less stringent requirements than banks.

Top Online Lenders for Startups:

• BlueVine – Best for lines of credit
• Fundbox – Best for short-term financing
• OnDeck – Best for fast approvals

Pros:

• Fast funding (24 hours to a few days)
• Easier approval than banks

Cons:

• Higher interest rates
• Shorter repayment terms

Best for: Startups needing quick cash with fair credit (600+).

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4. Business Credit Cards

Best for: Startups needing flexible spending
Credit Limit: 1,000–1,000–50,000
Interest Rates: 15% – 25% APR

Business credit cards (e.g., Chase Ink, American Express Business Gold) help startups manage cash flow.

Pros:

• Build business credit
• Rewards and cashback

Cons:

• High-interest rates if not paid in full
• Personal credit may be required

Best for: Startups looking for short-term financing and rewards.

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5. Microloans

Best for: Startups needing small amounts (50Korless)∗∗LoanAmount:∗∗50Korless)∗∗LoanAmount:∗∗500 – $50,000
Interest Rates: 8% – 13%

Nonprofits like Accion and Kiva offer microloans to startups with minimal credit history.

Pros:

• Easier approval
• No collateral needed (sometimes)

Cons:

• Small loan amounts
• May require a personal guarantee

Best for: Early-stage startups with low funding needs.

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6. Equipment Financing

Best for: Startups needing machinery, vehicles, or tech
Loan Amount: Up to 100% of equipment cost
Interest Rates: 8% – 30%

Lenders like Balboa Capital and Triton Capital specialize in equipment loans.

Pros:

• Equipment acts as collateral
• Flexible terms

Cons:

• Limited to equipment purchases

Best for: Startups in manufacturing, construction, or tech.

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7. Invoice Financing

Best for: B2B startups with unpaid invoices
Loan Amount: 80% – 90% of invoice value
Interest Rates: 1% – 5% per month

Companies like Fundbox and BlueVine offer invoice financing.

Pros:

• Quick access to cash
• No credit check (based on invoices)

Cons:

• High fees
• Only for businesses with outstanding invoices

Best for: Startups with slow-paying clients.

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8. Crowdfunding & Peer-to-Peer (P2P) Lending

Best for: Startups with a strong community or online presence
Platforms: Kickstarter, Indiegogo, LendingClub

Pros:

• No repayment (reward-based crowdfunding)
• Builds brand awareness

Cons:

• Requires marketing effort
• No guaranteed funding

Best for: Startups with a compelling story or product.

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How to Choose the Best Startup Loan?

Consider:
✅ Loan amount needed
✅ Interest rates & fees
✅ Repayment terms
✅ Funding speed
✅ Credit requirements

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Tips to Improve Loan Approval Odds

1. Build business credit (get an EIN, open a business bank account).
2. Prepare a solid business plan (lenders want to see profitability potential).
3. Improve personal credit score (many lenders check personal credit).
4. Offer collateral (increases approval chances).
5. Explore alternative lenders if traditional banks reject you.

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Final Thoughts

The best small business loans for startups depend on your credit, funding needs, and how quickly you need cash. SBA loans are ideal for low rates, while online lenders provide fast funding. Microloans and crowdfunding work for early-stage startups with minimal capital needs.

By comparing lenders and preparing a strong application, you can secure the funding needed to launch and grow your startup successfully.

Need Help Finding a Loan?

Check out lenders like BlueVine, Fundbox, or SBA-approved banks to explore the best options for your startup today!