If you're a first-time business owner, the best options are: Merchant Fund Express once your business has a few months of deposited sales; an SBA microloan if you're starting out and need up to $50,000 with coaching; an SBA 7(a) if you're buying a business that's already operating; Lendistry if your business is a year old and you have years of industry experience; equipment financing for tools or vehicles; and group microlending if you want to start very small.
The key for a first-timer is knowing what you can show today: sales, experience, a business you're buying that has a history, or an asset that backs the debt. Every option on this list leans on one of those things.
Key takeaways
- Without a borrowing history, funders look at your sales, your experience or the asset you're buying.
- Our recommended funder reviews sales and deposits and works with FICO 500+, so it fits once you've been selling for a few months.
- SBA microloans go up to $50,000 through community lenders and usually include coaching.
- An SBA 7(a) can be used to buy an existing business, but since March 2026 every owner must be a U.S. citizen or national.
- Lendistry accepts 1 year in business if you have 5 years of industry experience.
- Your first loan is also your first reference: borrow an amount you can repay without stress.
How we picked these options
We built this list around three kinds of first-time owners: someone opening a first business from scratch, someone buying a business that already exists, and someone who's been operating for a while but has never borrowed. We compared each option on fixed criteria: speed, minimum time in business, minimum credit, acceptance of ITIN or no-SSN owners, documents, amounts and collateral. No ratings or scores. Facts come from official sites, checked in October 2026. The full method is in how we rank business funding options.
If you want a step-by-step explanation of how a first loan works, start with our first-time business borrower guide. This page is the side-by-side comparison.
The best options for first-time owners, ranked
- Merchant Fund Express (recommended funder). A fit for the first-time owner who's already selling and depositing sales into a business account, even if they've never taken a loan. It reviews your sales and deposits, not just your credit; works with credit from FICO 500; handles $5,000 to $5,000,000; and often decides in 2 to 4 hours. Collateral isn't required in most cases, applying doesn't affect your credit, and it accepts applicants with an ITIN (no SSN needed). If your business has no sales yet, this isn't where to start.
- SBA microloan. The SBA funds nonprofit community lenders that lend up to $50,000 to start or grow a business; the average is around $13,000. It covers working capital, inventory, supplies, furniture or equipment. Many of these lenders provide coaching along with the loan, which is worth a lot the first time around.
- SBA 7(a) to buy an existing business. The SBA lists full or partial changes of ownership among the allowed uses of a 7(a). Buying a business with years of sales can be easier to finance than starting one from scratch, because the lender sees real numbers. Since March 1, 2026, 100% of the owners must be U.S. citizens or nationals.
- Lendistry. Its $10,000 to $350,000 term loan asks for 2 years in business, or just 1 year if you have 5 years of industry experience. That's a good route for someone who worked for years in a trade and then opened their own shop. It requires a 620 minimum FICO and a personal guarantee from owners with 20% or more.
- Equipment financing. If you need a van, a machine or tools, the equipment backs the debt. That's why it's one of the most accessible options for new businesses.
- Group microlending. Grameen America doesn't require a credit score, collateral or business revenue. The first loan is $500 to $2,500, made in a group of five with weekly meetings. It's a way to start very small and build a credit file.
Comparison table
| Option | Your ideal situation | Amounts | Credit | What matters most |
|---|---|---|---|---|
| Merchant Fund Express | You're selling and depositing | $5,000 to $5,000,000 | From FICO 500 | Sales and deposits |
| SBA microloan | You're just starting | Up to $50,000 | Set by each lender | Plan and coaching |
| SBA 7(a) | You're buying an operating business | Up to $5 million | Evaluated by the lender | The numbers of the business you're buying |
| Lendistry | 1 year operating, 5 years of experience | $10,000 to $350,000 | 620 minimum | Experience and credit |
| Equipment financing | You need a specific asset | Depends on the equipment | More flexible | The equipment |
| Group microlending | You're starting very small | $500 to $2,500 at first | No score needed | Group commitment |
What funders look at when you have no track record
A funder can't see how you repaid past business loans if you've never had one. So it looks for other signals. These carry the most weight, and here's how to strengthen each:
- Your personal credit. With no business history, your personal score stands in. Pay your cards on time and don't max them out in the months before you apply.
- Your business bank account. Separate your finances from day one. Depositing sales into a business account is what will let you qualify on revenue later.
- Your experience. If you cooked for ten years before opening your restaurant, say so. Some funders, like Lendistry, explicitly count it.
- Your plan. For microloans and SBA loans, a simple business plan with realistic numbers helps a lot. It doesn't need to be long; it needs to be clear.
- Cash you put in yourself. Putting in some of your own cash shows commitment. When you're buying a business, it's almost always required.
A practical tip: before you apply, pull your personal credit report and check it for errors. If you see an account you don't recognize or a late payment you actually made on time, dispute it. On a first loan, that detail can change the answer.
Common first-loan mistakes
- Applying before you have a business account. Without statements, most funders can't evaluate you.
- Mixing personal and business spending. It complicates your taxes and makes your real sales look smaller.
- Focusing only on speed. Fast money has its place, but always compare the total cost in writing.
- Signing a personal guarantee without reading it. On many business loans you're personally on the hook. Understand what you're signing.
- Borrowing far more than you need. Your first loan builds your history. A small one repaid well opens the door to a bigger one later.
- Not reporting all your income. If your tax returns show little, that limits what you can borrow, especially at banks and through the SBA.
If your business is under a year old, also compare the best startup business loans.
If you're buying a business that already exists
Buying a business with a track record is one of the most common ways to become an owner for the first time, and it's financed differently from starting from scratch. The funder looks at the numbers of the business you're buying: sales, profits and the current owner's tax returns. Your experience in that type of business matters too.
Before you sign a letter of intent, ask the seller for at least three years of tax returns, bank statements and a list of equipment and inventory. Check that the numbers you're being told match what was reported. If the seller says the business "makes more than it reports," the lender will only count what was reported.
The 7(a) can finance changes of ownership, but remember the citizenship rule in effect since March 2026. If any partner isn't a U.S. citizen or national, talk with the seller about seller financing or look for a non-SBA bank loan. For questions about your immigration status, talk to an immigration attorney about your situation. We cover the full process in how to buy a business with an SBA loan.
Which one fits your situation
- You're already selling and want to grow, even though you've never borrowed: Merchant Fund Express. Have your bank statements ready and apply for free; it won't affect your credit, and Spanish-speaking support is available.
- You're launching and need up to $50,000: an SBA microloan through a lender in your area.
- You're buying a business with a history and you're a U.S. citizen: SBA 7(a).
- Your business is a year old and you have years in the trade: compare Lendistry.
- You need a tool or a vehicle: equipment financing.
- You want to start very small, with community support: group microlending.
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Frequently asked questions
Can I get a loan if this is my first business?
Yes, but the right option depends on what you can show. If you already have deposited sales, you can qualify on revenue. If you're just starting, SBA microloans and group microlending are designed for you. If you're buying a business with a track record, the lender evaluates that business's numbers. Your personal credit matters in almost every case.
Can I get my first business loan with no business credit?
Yes. Most first-time owners don't have business credit yet, and funders know that. Instead they review your personal credit, your deposits, your experience and your plan. Opening a business account and depositing your sales there from day one is what helps you most down the road.
How much can I borrow on my first loan?
It depends on your sales and the option. SBA microloans go up to $50,000, with an average around $13,000. A revenue-based funder sizes the amount based on your monthly deposits. For a first loan, it's smart to start with an amount you can repay comfortably and grow from there.
Do I need a business plan for my first loan?
For microloans and SBA loans, you'll almost always be asked for one, or it will help a lot. For revenue-based funding, your bank statements are what matter. Even so, having one page that says what the money is for and how you'll repay it helps with any application.
Does my experience as an employee help me qualify?
It can. Some funders count your industry experience; Lendistry, for example, accepts 1 year in business if you have 5 years of experience in the field. At the SBA and at banks, your background is also part of the review, especially when you're buying a business.
What happens if my first loan application is denied?
Ask for the reason in writing. It's often something fixable: too little time operating, irregular deposits or high personal debt. Work on that point for a few months and reapply, or look for an option based on something else, like the equipment you're buying or your sales.