How to Get a Start-up Loan to Launch Your Business

Updated: March 30, 2022 | By: LendVer Staff –

Congratulations on starting your business or choosing to start a business, it can be a rewarding and exciting adventure but it is not for the faint of heart. Don’t despair, there are over 31 million small business owners in America so although the road ahead may seem difficult, you are not alone.

The Problem

Anytime you have a demographic as large as 31 million people, there will be a plethora of lenders with loan programs to accommodate it. The problem start-up (aka startup or start up) business owners run into is that most business lenders won’t lend to a brand new company. But you have a great idea right? Maybe you even bootstrapped your business’s launch already by using personal funds, borrowing a few dollars from friends and family or maxing out your credit cards; isn’t that worth something? Sure it is! This article will give you two solid options to help finance your business start-up, so read on.

Show Me the Money

You’re reading this article so you’ve likely discovered that the options to finance a business start-up are few and far between. Some lenders will advertise business start-up loans but the fine print reads a minimum time in business of two years (doesn’t sound much like a start-up loan). So where can you find a real business start-up loan?

The best method to fund a business start-up is with SBA 7(a) financing (we won’t bore you with all the details since you can read about SBA loans here). Although the SBA will guarantee business start-up loans made by SBA lenders, you will have a tough time finding a lender on your own that will provide one. However, South End Capital is a preferred nationwide SBA lender providing start-up financing from $500,000 to $5 million.

South End Capital is also a $2.4B balance-sheet lender and technology-enabled loan marketplace offering equipment financing to start-ups (businesses in operation less than 2 years) from $5,000 to $150,000.

Who Can Qualify?

Although South End Capital provides SBA and equipment start-up financing, not every new venture will be eligible. After all, the fate of a new business is uncertain and many businesses fail very soon after starting, so lenders like South End Capital will do their due diligence.

Start-up SBA Financing terms may include…

  • Funding from $500,000 to $5 million (businesses must be SBA eligible)
  • Rates can range from Prime + 1.75% to Prime + 2.75%
  • Terms will usually be amortized over 10 to 25 years
  • There will be often no prepayment penalty
  • Funding can occur in as fast as 45 days

Start-up Equipment Financing terms may include…

  • Funding from $5,000 to $150,000
  • Rates can range from 4% to 12%+
  • Terms will be fixed up to 5 years
  • Funding can occur in as fast as 1 day

When evaluating business start-up loan applications, SBA and equipment lenders will be looking for a few very important things:

  • Collateral: This can come in the form of commercial real estate, investment residential real estate, your home, equipment or heavy machinery. The more collateral you have, the better your chances of approval (tip: have available collateral equity equal to your requested financing amount).
  • Strong Credit: A high personal credit score will put you on the best footing for approval. Although many lenders may have a lower minimum credit score for seasoned businesses, borrowers with credit over 700 are preferred for start-up financing.
  • Solid Business Plan: Be sure to have a well articulated and detailed business plan written up, and 2 years of revenue projections prepared (tip: projected income will still have to meet the lenders minimum debt-service coverage requirement).
  • Experience: No matter what type of business you are starting, having direct or related industry experience is a must. Being able to demonstrate a track-record of success owning, or working for a business similar to the one you are starting, will go a long way to help getting your start-up financing.

Isn’t There an Easier Way?

The fastest way to get financing for your start-up is to get the ball rolling on your own if you are able. The reason you’ve probably read a lot about getting your business going by using your own funds, personal credit cards or borrowing from friends and family, is because they are all viable options. However, If these are not options available to you, then South End Capital may still be a great fit.

If you can just get your hands on enough capital to get your business operational and generating revenue for at least 3 to 6 months, then you may have more options available to you. South End Capital also offers alternative financing through its loan marketplace for businesses showing 3 months of positive revenue on business bank statements. Such options may include a business line of credit, a merchant cash advance, a business term loan, invoice factoring, and other options.


It would be great if anyone with a neat idea could go online and get a big loan to start a business, but that just isn’t reality. If you have a solid plan and the collateral, experience, and credit score to back it up, then SBA or equipment financing may be a great option to help you get your business off the ground. For everyone else, utilizing personal funds and credit cards to get your business cash-flow positive for 3 to 6 months so alternative business financing becomes an option, may be your best bet.

Interested in getting start-up financing to launch your business? Contact our recommended best business lender South End Capital.