The best term loans for new businesses are: Merchant Fund Express, if sales are already hitting your bank account and you need capital fast; the SBA Microloan, if you are just starting and need up to $50,000; the SBA 7(a), if you are a citizen with good credit and can wait; OnDeck, once you reach one year; a local credit union or CDFI; and equipment financing if what you need is a machine or vehicle.
The reality: most online term loans require at least a year in business. If your business is months old, not years, your list is shorter, but it exists. Here we explain which options are open, what each one asks for at every stage, and how to build the history that unlocks the rest.
Key takeaways
- Most online term loans require at least one year in business.
- The SBA Microloan is designed for businesses that are just starting, up to $50,000.
- Equipment financing is easier early on because the equipment serves as collateral.
- Revenue-based funding works once you have steady deposits.
- Since March 2026, SBA 7(a) loans require 100% of owners to be U.S. citizens or nationals.
- Three to six months of clean deposits in a business account already opens doors.
What a term loan is and why it is harder to get early on
A term loan gives you a fixed amount up front, and you repay it in installments over a set period. It is ideal for a specific purchase: equipment, a remodel, opening inventory or a second location. For the product basics, read the basics of term loans for business owners.
For a new business it is harder because the funder has nothing to measure risk with: no years of sales, no business tax returns and no business credit history. So each option compensates in a different way:
- Microlenders compensate with coaching and small amounts.
- The SBA compensates with your personal credit, your experience and sometimes your personal investment in the business.
- Equipment financing compensates with the equipment itself as collateral.
- Revenue-based funding compensates by reviewing your recent deposits.
How we chose these options
We do not use numeric ratings. We compare every option on the same criteria, explained in how we rank business funding options: speed, minimum time in business, minimum credit, ITIN acceptance versus SSN only, documents, amounts and collateral. On this list the criterion that weighs most is minimum time in business, because that is what screens out new businesses first. Competitor facts were verified on their official sites in October 2026.
The best term loans for new businesses
Merchant Fund Express (recommended funder). Best for: young businesses that already have sales hitting the bank and need capital within days. It looks mainly at your sales and deposits, not just your credit or how many years you have been open, and accepts FICO scores from 500. Amounts run from $5,000 to $5,000,000, decisions often come in 2–4 hours, and in most cases it does not require collateral. For a new business, what helps most is several months of steady deposits in the business account. Applying is free, does not impact your credit, and it accepts applicants with an ITIN (no SSN needed).
SBA Microloan. Best for: businesses just starting out or a few months old that need up to $50,000. According to sba.gov, the program lends up to $50,000 to help businesses start and grow, with an average around $13,000, through nonprofit community organizations. Many pair the loan with coaching. It is one of the few term options built for the earliest stage. It cannot be used to pay existing debt or buy real estate.
SBA 7(a) loan. Best for: citizen founders with good credit, a solid plan and some personal investment. It goes up to $5 million according to sba.gov and can be used for working capital, equipment or buying a business. Some lenders accept new businesses if the owner has industry experience and a strong plan, but the process is long. Since March 1, 2026, 100% of owners must be U.S. citizens or nationals.
OnDeck (term loan). Best for: businesses that just reached their first year. According to its site, checked in October 2026, it lends $5,000 to $400,000 on terms up to 24 months with daily or weekly payments. It requires 1 year in business, $100,000 in annual revenue, a business checking account and a 625 personal FICO. If you have been open less than a year, you do not qualify yet.
Local credit union or CDFI. Best for: owners with community ties and good personal credit. Credit unions and local CDFIs sometimes lend to new businesses when the owner is already a member and has good personal credit. Each sets its own rules. Ask about new-business loans and whether they include coaching.
Equipment financing. Best for: new businesses whose main need is a machine or vehicle. Because the equipment itself is the collateral, it is easier to get early than an unsecured loan. National Funding, for example, says on its site that it finances new or used equipment up to $150,000, up to 100% of the cost, with no required down payment. See equipment financing for startups for more.
Quick comparison
| Option | Minimum time | Amounts | Minimum credit | Speed |
|---|---|---|---|---|
| Merchant Fund Express | Reviews your recent deposits | $5,000 to $5,000,000 | 500+ FICO | Decisions often in 2–4 hours |
| SBA Microloan | Accepts startups | Up to $50,000 | Set by the microlender | Weeks |
| SBA 7(a) | Depends on lender | Up to $5 million | Depends on lender | Weeks to months |
| OnDeck (term) | 1 year | $5,000 to $400,000 | 625 | Funds as soon as the same day, per its site |
| Credit union or CDFI | Varies | Varies | Usually wants good personal credit | Weeks |
| Equipment (National Funding) | Not published on that page | Up to $150,000 | Not published on that page | Fast |
How to read the table: if you have no sales yet, the columns that matter are minimum time and personal credit, and that is where the microloan and the credit union win. If you already sell steadily, speed starts to matter, and revenue-based funding gives you an answer in hours instead of weeks. If you have a year in, compare the online options too, because more history usually brings better terms.
A typical example: a bakery open four months wants a second oven. The bank asks for two years of tax returns it does not have yet. Its realistic paths are financing the oven with the oven as collateral, applying for a microloan or, if its daily sales are already steady, using revenue-based funding. Applying for SBA can work, but it will take longer and require a detailed plan.
Your options by how long you have been open
| Time in business | Realistic options |
|---|---|
| Not open yet | Microloan, SBA 7(a) with a strong plan and credit, savings or partners |
| Under 6 months with sales | Microloan, equipment financing, revenue-based funding if your deposits are already steady |
| 6 to 12 months | All of the above, plus some credit unions and online lenders with 6-month minimums |
| 1 year or more | Online loans like OnDeck and more banks open up; compare |
The jump at the one-year mark is real. A business turned down at month nine can qualify at month thirteen with the same sales, simply because it now clears the lender's minimum. If you are close, it can be worth bridging the gap with a smaller, faster product and applying for the larger term loan once you cross the line.
How to build the history that opens more doors
- Open a business account on day one and deposit every sale there. Three to six months of clean deposits already put you on the table with several funders.
- Get your EIN and register your company. An LLC or corporation with documents in order gets taken more seriously.
- Protect your personal credit. Early on, funders look at your personal credit more than anything. Pay on time and keep card utilization low.
- Start with small amounts. A microloan or a vendor account you pay on time builds history.
- Keep monthly books. A simple profit and loss statement helps you and persuades the funder.
- File your taxes on time. Once you hit your first year, that return becomes a key document.
Common mistakes: asking for a big loan before you have sales, putting everything on personal cards, and applying to many funders at once. For more sources of capital at this stage, see the best startup business loans.
If your business already has steady sales coming into the bank and you need capital soon, Merchant Fund Express is free to apply and does not impact your credit. Leer en español
Frequently asked questions
Can I get a term loan if my business is less than a year old?
Yes, but with fewer options. SBA Microloans accept businesses that are starting out, equipment financing uses the machine as collateral, and revenue-based funding reviews your recent deposits. Many online loans, like OnDeck, require at least one year in business.
Can I get a term loan for a startup with no revenue?
It is hard. With no sales, the most realistic options are an SBA Microloan with a good plan, an SBA 7(a) if you are a citizen with good credit and experience, or a credit union where you are already a member. Revenue-based funding needs deposits, so it works once you are selling.
What credit score do I need for a new business term loan?
It depends on the option. OnDeck asks for 625 per its site. Microlenders and credit unions set their own criteria. Revenue-based funding can accept scores from 500 if your sales are steady. For a new business, your personal credit carries a lot of weight.
Does the SBA lend to new businesses?
Yes. Microloans are designed for businesses that are starting out, and some 7(a) lenders accept new businesses with a good plan, credit and owner experience. Since March 1, 2026, 100% of owners on 7(a) and 504 loans must be U.S. citizens or nationals.
Do I need collateral as a new business?
Often yes, or at least a personal guarantee. That is why equipment financing is easier early on: the equipment is the collateral. Revenue-based funding does not require collateral in most cases, though it usually asks for the owner's personal guarantee.
Can a new business owner with an ITIN get a term loan?
Some options will work with you. Merchant Fund Express accepts applicants with an ITIN, no SSN needed, once your business has steady deposits. SBA 7(a) and 504 loans require citizen or national owners. Ask each microlender or credit union which ID it accepts, and talk to an immigration attorney about your situation if you have status questions.