Starting a new business is one of the most exciting — and risky — things you can do.
You’ve got the idea. You’ve got the passion. But what about the money?
For most startup founders, funding is the biggest hurdle. Traditional banks often require years of business history, solid credit, and, sometimes, collateral you just don’t have yet.
Good news: there are business loans out there built for startups — even with no collateral.
In this detailed guide, we’ll break down the best options available in 2025, how to qualify, and smart tips to secure the funding you need to bring your dream to life.
Why Business Loans for Startups Are Different
Traditional business loans typically expect you to have:
- 2+ years in business
- Strong revenue
- Good credit
- Business assets as collateral
Startups don’t usually check all those boxes. You might just have an idea, a plan, maybe a prototype — but no real revenue yet.
This makes startup loans riskier for lenders, so they create special loan products designed to balance that risk.
What you can expect:
- Higher Interest Rates: More risk means higher pricing.
- Personal Guarantees: You personally back the loan.
- Revenue-Based Repayment: Some lenders use expected future earnings to decide.
Types of Business Loans You Can Get Without Collateral
There’s no one-size-fits-all loan. Depending on your startup’s needs and industry, you might go for:
1. Business Lines of Credit
Think of it like a credit card for your business. You borrow what you need, when you need it, and only pay interest on what you use.
Perfect for:
- Managing cash flow
- Buying inventory
- Covering unexpected costs
Pros:
- Flexible borrowing
- Only pay interest on what you use
Cons:
- Requires good personal credit
- Limits may be low for new businesses
2. Equipment Financing
Need machinery, computers, or tools? Equipment financing lets you buy what you need by using the equipment itself as “collateral” — but no extra personal assets required.
Perfect for:
- Restaurants
- Manufacturing
- Tech startups
Pros:
- Easier approval
- Fixed interest rates
Cons:
- Tied to the specific equipment purchase
3. Merchant Cash Advances
If you’re already making some sales, a merchant cash advance (MCA) gives you a lump sum now, repaid through a percentage of future sales.
Perfect for:
- Retail stores
- E-commerce businesses
- Service providers
Pros:
- Quick access to cash
- Based on sales, not credit score
Cons:
- Very high fees (use with caution!)
4. SBA Microloans
The Small Business Administration (SBA) offers microloans up to $50,000 through nonprofit lenders.
These loans are startup-friendly and don’t always require traditional collateral.
Perfect for:
- Solopreneurs
- Early-stage startups
Pros:
- Low-interest rates
- Flexible terms
Cons:
- Lengthy application process
- May require a personal guarantee
5. Online Startup Loans
Fintech lenders like Fundbox, BlueVine, or Kabbage offer startup loans based on your banking activity, invoices, or sales — no collateral needed.
Perfect for:
- Digital businesses
- Freelancers scaling up
Pros:
- Fast applications (often under 24 hours)
- More forgiving on credit
Cons:
- Higher interest rates than banks
Top Startup Loan Providers in 2025
| Lender | Minimum Time in Business | Loan Amounts | Rates (APR) |
|---|---|---|---|
| BlueVine | 6 months | Up to $250,000 | 4.8%–45% |
| OnDeck | 1 year | $5,000–$250,000 | 29%–97% |
| Fundbox | 6 months | Up to $150,000 | 10.1%–79% |
| SBA Microloan | None | Up to $50,000 | 6%–13% |
| Accion Opportunity Fund | None | $5,000–$100,000 | 5.99%–16.99% |
Pro Tip: If you have a co-founder or business partner with great credit, applying together can strengthen your application.
How to Qualify for a Startup Loan Without Collateral
Lenders still want to see something that shows you’re not a huge risk. Here’s what helps:
1. Strong Personal Credit
Since your business has no history, lenders will look at your personal credit score.
Aim for a score of 650+ for better approval chances.
2. Solid Business Plan
Lenders love a startup that knows where it’s going. A sharp, detailed business plan with market research, growth projections, and a clear mission will impress them.
3. Steady Cash Flow (if possible)
If you’re already making sales (even small ones), show them! Early revenue is a huge trust signal.
4. Professional Online Presence
Believe it or not, lenders Google you.
Having a clean, professional website, social media pages, and even a LinkedIn profile adds credibility.
How Much Money Should You Borrow?
A huge mistake many startup owners make is borrowing too much.
It’s tempting to dream big, but only borrow what you truly need to get to the next milestone — whether it’s launching your website, buying inventory, or opening a storefront.
Too much debt early on can strangle your cash flow and kill your dream before it starts.
Things to Watch Out For
Not all lenders are friendly. Here’s what to avoid:
- Sky-high interest rates: Some “no credit check” lenders charge 100%+ APR. Insane!
- Prepayment penalties: Make sure you can pay off early without fees.
- Hidden fees: Always ask about origination fees, maintenance fees, and late payment penalties.
Alternative Funding Options for Startups
If loans aren’t the right fit, you still have other choices:
- Angel investors: Wealthy individuals who invest in startups.
- Venture capital: Big funding rounds (if you’re scaling fast and have traction).
- Crowdfunding: Sites like Kickstarter and Indiegogo let you raise money directly from fans.
- Grants: Free money! Look into local, state, and federal small business grants.
Final Thoughts: Funding Your Dream Without Risking Everything
Startup life is hard enough without the stress of heavy debt.
Thankfully, business loans for startups without collateral are more available than ever in 2025 — you just need to know where to look and how to prepare.
Build your credit.
Craft a killer business plan.
Compare multiple lenders before choosing.
With the right loan and smart financial planning, you can launch your business strong — and watch your dream turn into reality.