When you’re starting a business you need all the help you can get to take it off the ground, and the best way to do this is by getting the capital to reach your goals.

You know your startup has all the potential to grow and become a successful business, but many expenses can get in your way and create cash flow problems.

There are many ways to get money for your business, and one of those is the startup business loans that have many advantages over the other types of financing.

One of the main aspects of getting funding is to know exactly where to look for, as well as the several options available so you can choose the right one for your business.

Types of loans

Before applying for a business loan, you need to know all the options available so you can decide wisely what’s best for your startup.
Since there are many options you should evaluate the stage of your company so you can decide which one is the best for you. Also, you should consider the use that you’re going to give to the money because this will help you make a better decision.

As a startup, your options are limited, but this doesn’t mean that you can’t get a great loan; you just have to continue looking until you find the perfect one for you.


These are best for new businesses since it’s a great help getting everything you need to start. Most microloans go up to $10.000 but if you’re getting started this might be more than enough for your business.

Personal loans

This is a good option for you if you see that the other forms of financing are good for you, and the best part is that this type of loan doesn’t require collateral.

This is money borrowed from an online lender, a bank or credit union, but you have to make sure that the lender allows you to use the money for your business.

Peer-to-peer lending (P2P)

One of the most popular ways to get funding for your business nowadays is by peer-to-peer lending, which consists of receiving money from other individuals without the need for an intermediary. This is also known as “crowdlending” or “social lending”.

Supplier credit

Another great option is the supplier credit, which is an agreement that you make with a supplier or vendor of products or good, to defer payments. This can help you manage better your cash flow and it’s also known as supplier financing.

Invoice financing

With this type of financing, you can borrow money to a third party by offering the invoices you’ve billed to your customers for a percentage of their value as collateral. It can increase cash flow and help your business grow faster.


Even though it’s difficult for a startup to get money from an investor or a venture capitalist firm, it’s an option for businesses that have a good track record or a solid business plan that can attract people to back it.

Special loans

Since applying for a loan requires the business owner to fulfill certain aspects, there are special loans oriented to help those who comply with specifics characteristics.

For the business owner who has no credit history or poor credit, some lenders don’t seem this as a problem, so if this is your case then you should consider looking up for these options first.

Some lenders have specific programs for women business owners, minority-owned business, and veteran entrepreneurs that are a great way to help them grow in their startup by getting the money they need.

The unsecured business loans are available for those startups that only have few business assets to their name, which are a great option if you’re just getting started, but they are rare to get.

What you need to know before applying for a loan

If you’re considering applying for a startup business loan then you should know that you have to comply with certain requirements to make your startup more eligible and get the funding easier.

You need to have good personal credit, especially if you don’t have any business credit history. Although this is not completely mandatory, it’s easier to get a loan if you have good credit. But, there are also some loans for startups with bad credit such as Fundbox, so don’t be discouraged about this.

Regarding the loan option you going to apply, you should consider first if it’ll help you build business credit since this is very important for the later financing options you’re going to request in the future.

How to find loans?

Finding a business loan is tough since many investors decide not to give their money to startups because it’s risky, so they prefer to invest in later stages of any business that will guarantee a benefit for them.

But the good thing is that there are many companies and non-profit organizations that offer loans for small business owners to get started, so you’ll have to look carefully to know where to apply.

One of the most popular for getting loans is Lendio, which is a marketplace that connects business owners with lenders, so it’s the first choice for any startup. The advantage is that you’ll need to fill out only one application and they’ll give you the best match for your business.

If you’re looking for microloans, then the best one is Kiva, which offers 0% interest so it’s perfect for getting started. You can get as little as $25 and as much as $10.000 so you have to consider how much money you need to run your business for the next few months.

When it comes to peer-to-peer lending there are many options. StreetShares is the perfect one for startups since it offers great deals on loans. You can also try the Kickstarter or Indiegogo websites that will allow you to connect with potential customers. The advantage of these platforms is that you’ll get the money directly from people who are interested in buying your product and essentially doesn’t involve any type of credit relationship.


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