Features
Part of Startup loans: trading-record substitutes and SBA options
Startup loans comparison, tested against experience
Startup loans compared on four axes against equity, customer money and asset finance, with a way to match the instrument to what the money actually does.
A startup loans comparison usually starts in the wrong place. Most offers advertise the payment and the rate.
For a business with no history, four other things separate the options: what secures each one, whether repayment moves with revenue, how much founder security backs it, and what it does to the next application.
This page compares the instruments and the lenders a new business meets on those four axes. No product is recommended. Each fits a shape of need.
What to take away
- Compare on security, on whether repayment flexes, on personal exposure, and on what it does to future borrowing. The rate comes after.
- The instrument should match what the money doesan asset, a gap, a receivable, or a launch.
- Two of the cheapest sources of capital for a new business are not loans at all: customer prepayments and supplier terms.
- The smallest checks come from Kiva US, up to $15,000 at 0% interest, and from SBA Microloans, which average about $14,000.
The options on four axes
The table names the products a first-time borrower actually meets, and the lender that writes each one.
Secured by
- SBA 7(a) loan, made by banks such as Live Oak Bank of Wilmington, North Carolina, and Newtek
- Business assets and an unlimited guarantee from every owner of 20% or more; the SBA covers 75% to 85% of the bank's loss
- SBA Microloan, through an intermediary such as Accion Opportunity Fund or LiftFund
- Mostly the borrower's signature
- SBA 504 loan for a building or heavy equipment, arranged with a certified development company
- The property or equipment, with about 10% down
- Bank line of credit, such as the Chase Business Line of Credit or a Wells Fargo small business line
- A guarantee, sometimes receivables or inventory
- Online line of credit, such as Bluevine or Fundbox
- The business's own banking and card data
- Online term loan, such as OnDeck
- A blanket lien over business assets, plus a guarantee
- Equipment loan or lease, from specialists such as Crest Capital or Balboa Capital
- The asset itself
- Invoice financing, from factors such as altLINE, Riviera Finance or TCI Business Capital
- Your receivables
- Merchant cash advance, including Stripe Capital, Square Loans and Shopify Capital
- Future card receipts, often plus a guarantee
- Personal loan used for the business, from a marketplace such as LendingClub or from a bank
- You
- Business credit card, such as Chase Ink Business Unlimited or Amex Blue Business Plus
- Usually a personal guarantee
- Corporate card with no personal guarantee, such as Brex or Ramp
- The company's cash balance and funding
- Kiva US crowdfunded loan
- Nothing
- Venture debt, from Trinity Capital, Western Technology Investment or Silicon Valley Bank, now part of First Citizens
- Company assets, contracts and warrants
- Customer deposits and prepayments
- Nothing
- Supplier terms
- The relationship
- Equity
- Nothing
Does repayment move with revenue
- SBA 7(a) loan, made by banks such as Live Oak Bank of Wilmington, North Carolina, and Newtek
- No: fixed schedule, up to 10 years for working capital, 25 for real estate
- SBA Microloan, through an intermediary such as Accion Opportunity Fund or LiftFund
- No, but terms run to six years
- SBA 504 loan for a building or heavy equipment, arranged with a certified development company
- No
- Bank line of credit, such as the Chase Business Line of Credit or a Wells Fargo small business line
- Partly: you draw what you need
- Online line of credit, such as Bluevine or Fundbox
- Partly: revolving
- Online term loan, such as OnDeck
- No
- Equipment loan or lease, from specialists such as Crest Capital or Balboa Capital
- No
- Invoice financing, from factors such as altLINE, Riviera Finance or TCI Business Capital
- Yes: it scales with the ledger
- Merchant cash advance, including Stripe Capital, Square Loans and Shopify Capital
- Under a holdback the amount moves; the total does not
- Personal loan used for the business, from a marketplace such as LendingClub or from a bank
- No
- Business credit card, such as Chase Ink Business Unlimited or Amex Blue Business Plus
- Partly: revolving
- Corporate card with no personal guarantee, such as Brex or Ramp
- Partly: revolving
- Kiva US crowdfunded loan
- No: fixed monthly repayments
- Venture debt, from Trinity Capital, Western Technology Investment or Silicon Valley Bank, now part of First Citizens
- No
- Customer deposits and prepayments
- Entirely: it is revenue
- Supplier terms
- Somewhat
- Equity
- Entirely: there is no repayment
Personal exposure
- SBA 7(a) loan, made by banks such as Live Oak Bank of Wilmington, North Carolina, and Newtek
- High, through the guarantee
- SBA Microloan, through an intermediary such as Accion Opportunity Fund or LiftFund
- A guarantee is usual
- SBA 504 loan for a building or heavy equipment, arranged with a certified development company
- A guarantee from owners of 20% or more
- Bank line of credit, such as the Chase Business Line of Credit or a Wells Fargo small business line
- Moderate to high
- Online line of credit, such as Bluevine or Fundbox
- Bluevine asks for a personal guarantee; Fundbox commonly does not
- Online term loan, such as OnDeck
- High
- Equipment loan or lease, from specialists such as Crest Capital or Balboa Capital
- Can be lower, because the asset carries part of the risk
- Invoice financing, from factors such as altLINE, Riviera Finance or TCI Business Capital
- Lower on customer default; a validity guarantee is common
- Merchant cash advance, including Stripe Capital, Square Loans and Shopify Capital
- High through guarantee and default triggers
- Personal loan used for the business, from a marketplace such as LendingClub or from a bank
- Total: there is no business in the paperwork
- Business credit card, such as Chase Ink Business Unlimited or Amex Blue Business Plus
- High for the balance carried
- Corporate card with no personal guarantee, such as Brex or Ramp
- None, where the company qualifies
- Kiva US crowdfunded loan
- No guarantee is advertised
- Venture debt, from Trinity Capital, Western Technology Investment or Silicon Valley Bank, now part of First Citizens
- Often none for a funded company
- Customer deposits and prepayments
- None
- Supplier terms
- None
- Equity
- Ownership, not assets
Effect on the next application
- SBA 7(a) loan, made by banks such as Live Oak Bank of Wilmington, North Carolina, and Newtek
- A fixed monthly obligation on the file; a clean repayment history helps and banks read an SBA loan well
- SBA Microloan, through an intermediary such as Accion Opportunity Fund or LiftFund
- Small marks: the program caps at $50,000 and the average loan is about $14,000
- SBA 504 loan for a building or heavy equipment, arranged with a certified development company
- A long-dated real estate obligation; caps at $5 million, or $5.5 million for manufacturers
- Bank line of credit, such as the Chase Business Line of Credit or a Wells Fargo small business line
- A revolving limit later lenders read as debt you could already have drawn; most banks want two years of filed returns
- Online line of credit, such as Bluevine or Fundbox
- Bluevine runs to $250,000 and quotes from 6.2% APR; Fundbox reaches $150,000
- Online term loan, such as OnDeck
- $5,000 to $250,000, commonly priced in the high teens to low forties; daily or weekly debits show on statements
- Equipment loan or lease, from specialists such as Crest Capital or Balboa Capital
- A specific filing that leaves other assets free
- Invoice financing, from factors such as altLINE, Riviera Finance or TCI Business Capital
- A filing over receivables a later lender must work around; fees commonly 1% to 4% of the invoice for a 30-day wait
- Merchant cash advance, including Stripe Capital, Square Loans and Shopify Capital
- Daily debits visible on statements; a blanket filing; some lenders decline outright; Shopify Capital advances run from $200 to $2 million
- Personal loan used for the business, from a marketplace such as LendingClub or from a bank
- Personal debt on the founder's file that every later business application is read against
- Business credit card, such as Chase Ink Business Unlimited or Amex Blue Business Plus
- The balance carried shows on the file that is being underwritten
- Corporate card with no personal guarantee, such as Brex or Ramp
- Brex and Ramp generally want venture funding or a substantial cash balance
- Kiva US crowdfunded loan
- Up to $15,000 at 0% interest, repaid over up to three years
- Venture debt, from Trinity Capital, Western Technology Investment or Silicon Valley Bank, now part of First Citizens
- Warrants and covenants enter the story a later lender reads
- Customer deposits and prepayments
- None, and it proves demand
- Supplier terms
- None
- Equity
- Strengthens the balance sheet a lender reads
Costs as of 2026 break down like this. SBA 7(a) rates are capped at about prime plus 2.25 points for most loans above $50,000, with higher caps on smaller amounts. SBA Microloans typically cost 8% to 13%. Bank lines run near prime plus 1 to 3 points.
Online pricing sits higher. Bluevine quotes its line from 6.2% APR, OnDeck-style term loans commonly land in the high teens to low forties, and factoring costs about 1% to 4% of the invoice for a 30-day wait. Card-sales advances are the most expensive, with effective annual rates commonly quoted from 40% up.
The last three rows are not debt. They belong in the comparison because for a new business they are frequently the cheapest capital available, and a founder who prices them first often needs less of the rows above.
Startup capital compared
Term loan
- Secured by
- Guarantee, sometimes assets
- Moves with revenue
- No: fixed schedule
- Personal exposure
- Often high
- Effect on next application
- Fixed monthly obligation
Equipment loan
- Secured by
- The asset itself
- Moves with revenue
- No
- Personal exposure
- Can be lower
- Effect on next application
- Specific filing
Line of credit
- Secured by
- Guarantee, receivables
- Moves with revenue
- Partly: draw what you need
- Personal exposure
- Moderate to high
- Effect on next application
- Revolving limit read as debt
Invoice financing
- Secured by
- Your receivables
- Moves with revenue
- Yes: scales with ledger
- Personal exposure
- Lower on default
- Effect on next application
- Filing over receivables
Match the instrument to what the money does
Buying something with a working life. A term loan or an equipment structure, with the term set near the asset's earning life. The asset can carry part of the security, which lowers what else you must pledge.
Live Oak Bank writes SBA 7(a) loans for equipment-heavy businesses, and specialists such as Crest Capital and Balboa Capital fund most of the equipment cost. The ownership questions that decide between loan and lease are in equipment financing.
Covering a gap that opens and closes. A line of credit, if a new business can obtain one, because it is drawn and repaid as the gap moves. Bluevine, Fundbox and your own bank are the first calls.
A term loan fits this badly: it is drawn once, spent, and the gap returns with a payment on top. The mechanics of the two states, drawn and undrawn, are in lines of credit.
Match instrument to money's job
What does the money do?
Buying something with a working life -> Term loan or equipment structure
Covering a gap that opens and closes -> Line of credit
Waiting for commercial customers to pay. Invoice financing, once you are billing businesses on terms, because it grows with the ledger instead of needing a history.
Factoring from altLINE, Riviera Finance or TCI Business Capital suits a business that invoices on 30- to 60-day terms. Invoice financing cannot fund work not yet delivered, and it costs by the day the customer takes to pay.
Covering losses while the model is found. The hardest case. Debt has fixed obligations and no share in the upside, which is the wrong shape for uncertainty.
Equity, customer money and a smaller start are the instruments built for this. Venture debt from Trinity Capital, Western Technology Investment or Silicon Valley Bank, now part of First Citizens, is available once a company has raised equity, typically at prime plus one to three points with warrants attached.
If debt is used, size it against the downside case, and understand that the guarantee outlives the business. Build the requirement from the ground up rather than borrowing the plan's total, and the SBA's page on calculating startup costs is a workmanlike way to do that.
Speed above everything, for a dated opportunity. A merchant cash advance is the fastest of the rows and the most expensive per year, and the total is fixed however quickly it is repaid.
Stripe Capital, Square Loans, Shopify Capital and Amazon Lending all repay themselves from a share of sales, so the seller never writes a check. That suits a specific, dated, revenue-producing opportunity, and rarely covers a general shortfall. The arithmetic and the failure pattern are in merchant cash advances.
The fourth axis, which nobody advertises
Every instrument leaves a mark that the next lender reads. A filing over receivables has to be worked around. A blanket lien blocks.
Daily debits on a bank statement are read as a sign of stress. Personal debt taken for the business sits on the founder's own file and is counted against every future application.
The mark left on the next lender
Lender-friendly mark
- Filing
- Asset-specific
- Repayment
- Clean amortising schedule
- Bank statement
- Regular payments
- Founder's file
- Business debt only
Lender-worrying mark
- Filing
- Blanket lien
- Repayment
- Stack of short-term obligations
- Bank statement
- Daily debits read as stress
- Founder's file
- Personal debt counted against
New businesses tend to borrow more than once, and the second loan is underwritten against the shape the first one left. Before choosing the first instrument, ask what it does to the second.
An asset-specific filing and a clean amortizing schedule are the marks a later lender likes to see. A repaid SBA loan reads well at any bank. A stack of daily-payment advances does not.
How to run the comparison on real offers
Request the same four numbers from Live Oak Bank, Bluevine, Fundbox and your own bank, then put them side by side.
- For each offer, fill in the four axes from the documents, not from the conversation.
- Convert the price into a total cost of capitaleverything that leaves against everything that arrives, scaled to a year. The method is in the startup loans calculator.
- Discard any offer whose personal exposure the household has not agreed to carry.
- Among the rest, prefer the instrument whose repayment shape matches the revenue shape, then the cheapest.
Where to check anything specific
Terms, criteria and pricing belong to each lender and change without notice. What stands in for history when a new business borrows, and the reckoning worth doing before signing anything, is in startup loans.
For a neutral overview of options for a new business, the SBA business guide is a reasonable starting point. The SBA's Lender Match tool puts borrowers in front of participating lenders, and CDFI intermediaries such as Accion Opportunity Fund and LiftFund publish their own criteria.
Common questions
Why is the rate not one of the four axes?
Because it is the axis every offer already advertises, and it is the one that separates the options least. Two products at the same rate can differ entirely on security, flexibility and personal exposure.
Is a personal loan for the business ever sensible?
It is the simplest to obtain and the most exposed. If used, keep it small, document that it was lent to the business, and understand that it is your debt whatever the business does.
Which instrument is best for a new business?
None in general. The one whose repayment shape matches what the money does, whose security you can afford to give, and whose mark on your file the next lender will read kindly.
Should I price customer deposits before borrowing?
Yes, before anything else. They cost nothing, carry no guarantee, and prove the demand a lender will otherwise doubt.
Which named lenders will look at a business under a year old?
Fundbox commonly wants three months of banking history and about $100,000 in annual revenue. Stripe Capital and Square Loans underwrite on your sales volume. Kiva US has no revenue minimum. Most banks and Bluevine want about a year of trading.
