Can you get a business loan in your first year?
Sometimes, and the product matters more than it does later. In their first year, our applicants borrow for equipment first, at 37.1%, well ahead of expansion at 22.9%. That matters: a purchase that secures its own financing is one of the few routes that does not depend on a trading history you do not have yet.
Part of our guide to Small Business Loans: Types, Costs and What It Takes to Qualify.
What applicants in their first year report
Based on more than 1,000 funding applications to TopFunders.ai, here is the profile of applicants who have been in business under a year:
| Applicants in business under a year | Share |
|---|---|
| Borrowing to buy equipment | 37.1% |
| Borrowing to expand the business | 22.9% |
| Report monthly revenue under $10,000 | 63.1% |
| Place their credit under 600 | 47.9% |
| Ask for more than $50,000 | 49.3% |
Across all applicants, expansion is the top purpose and equipment is second. In the first year the order flips. New owners are buying the truck, the oven or the machine that the business runs on, and that is a different kind of borrowing from topping up cash flow.
Why equipment changes the answer
Most business lending leans on history: how long you have traded, what your deposits show, how you have handled credit. A young business has little of the first two. Equipment financing works differently, because the equipment secures the loan. If the business does not pay, the lender takes the asset back, so the asset carries part of the risk your history cannot.
That is why a first-year business buying a specific, resellable piece of equipment is often a more realistic applicant than one asking for general working capital, even with the same revenue.
For payroll, inventory and other everyday costs, read What is a working capital loan, and which kind fits your business?
What you will likely qualify for, and what you will not
On time in business. Six months is a common minimum across online lenders, and a year or more widens the options considerably. Two or more years typically opens bank and SBA lending. Many online business lenders look for at least 6 months in business, $10,000 or more in monthly revenue, and a personal credit score of 550 or higher. Each lender's published minimums are in Business Loan Requirements by Lender (2026).
Likely within reach if you are past six months, report $10,000 a month or more, and are buying equipment. Equipment financing is the strongest fit. How does equipment financing work, and what does it really cost? shows what it costs and who qualifies.
Possible but narrower if you are past six months with steady revenue but no specific asset. Online term loans and revenue-based products are the usual routes, and revenue-based products are the expensive end: they can work out equivalent to 40% to 350% APR.
Below what most of our partners consider if you have been trading under six months. At that stage the SBA microloan program, which sets no minimum time in business, is the main exception.
Hard to reach if you report under $10,000 a month. That describes most of this group: 63.1% report under $10,000 a month. Most online lenders look for $10,000 a month or more before they will consider an application.
Not realistic in most cases: bank term loans and SBA 7(a) loans, which typically want two or more years of trading.
One exception worth knowing. The SBA's microloan program, per the SBA, lends up to $50,000 and sets no minimum time in business. It runs through nonprofit intermediaries and is slower. Our microloan guide covers how it works. For all four SBA programs side by side, see SBA Loans: Which Program Fits Your Business?.
What startup funding is there beyond loans?
Beyond a standard loan, a new business can look at SBA microloans, community lenders such as CDFIs, state startup programs and free counseling. Most are loans, not gifts.
CDFIs and nonprofit loan funds. A CDFI (Community Development Financial Institution) is certified by the Treasury's CDFI Fund to serve low-income communities and people who lack access to financing. Some CDFIs and nonprofit loan funds work with startups. The CDFI Fund's certification page links its list of certified CDFIs.
SBA microloans. Up to $50,000 to start up or expand, averaging about $13,000, per the SBA. Nonprofit intermediaries make credit decisions. See SBA Microloans: Who They Actually Suit, and Who They Don't.
State programs. Treasury's State Small Business Credit Initiative (SSBCI) funds state programs. You apply to the state program or its partner lenders, not to Treasury. Check your state in Treasury's List of SSBCI Capital Programs and Contacts.
Colorado's Startup Loan Fund is one example. It accepts applications through partner lenders from for-profit Colorado businesses with $2 million or less in revenue that cannot get traditional financing and meet the lender's credit rules. Loan sizes run $500 to $150,000, depending on the lender. A business with under 24 months of revenue completes technical assistance first.
Grants. The SBA says it "does not provide grants for starting and expanding a business." SBA Loans: Which Program Fits Your Business? explains the $10,000 SBA grant question.
Free help. SBA resource partners, which are Small Business Development Centers, SCORE and Women's Business Centers, offer counseling and training, often free or low cost.
Startup funding options compared (typical ranges, not offers)
| Option | Typical amount | Time in business usually needed | Cost | Startup friendly? |
|---|---|---|---|---|
| SBA microloan | Up to $50,000, average about $13,000 (per the SBA) | None required (the SBA sets no minimum) | Generally 8% to 13% (per the SBA) | Yes, startups qualify (per the SBA) |
| CDFI or nonprofit loan fund | Varies by lender | Set by each lender | Varies by lender | Some work with startups, not all |
| State startup program (Colorado example only) | $500 to $150,000, depending on the lender (one example, not a typical range) | Under 24 months of revenue: technical assistance first (one example) | Ask the partner lender (one example) | Yes, it serves people starting a business (one example) |
| Equipment financing | $5,000 to $500,000 (typical range) | No single minimum published; one equipment lender publishes about 2 years under current ownership (last checked September 24, 2026) | Usually below unsecured products (typical range) | Often, when the money buys an asset (a typical pattern, not a promise) |
| Merchant cash advance | Varies widely (typical range) | About 6 months (published floor, last checked September 24, 2026) | Factor rates roughly 1.1 to 1.5, equivalent to APRs of 40% to 350% (typical range) | Limited: needs revenue and about 6 months in business (published floor) |
| Online term loan | Varies widely; generally tops out around $500,000 (typical range) | About 1 year (published floor, last checked September 24, 2026) | 15% to 45% APR (typical range) | Limited: needs revenue and about 1 year in business (published floor) |
Typical ranges, not offers. SBA figures are per the SBA. Floors are the minimums lenders publish on their own sites, last checked September 24, 2026, and they change. The state row is one example, not a range, and says nothing about any other state.
Before you apply anywhere
- Separate the equipment from the rest. If part of what you need is a specific asset, finance that part as equipment. It is usually cheaper and easier to approve than the same amount unsecured.
- Open a business bank account now, if you have not. Lenders read business deposits. Months of clean deposits in a business account are the history a young business can build fastest.
- Ask for what the business can carry. Nearly half of first-year applicants ask for more than $50,000. A smaller request tied to a specific use is easier to place.
- Do not stack applications. Several hard inquiries in a short window can lower the score the next lender reads.
How TopFunders.ai fits
TopFunders.ai is not a lender and not a loan broker. We compare what you tell us against what our vetted funding partners will consider, and introduce you to the partners ready to make your business an offer. Which partners you are put in front of is decided using real approvals from businesses like yours. Checking your options doesn't affect your credit, and we never ask for your Social Security number or Tax ID to match you.
Being matched is an introduction, not an approval. The partner reviews your application, sets any amount, rate and terms, and decides whether to fund you. A match is not guaranteed, and for a business under six months it is unlikely. How we match explains the process.
See what your business qualifies for
Frequently asked questions
Can a startup get a business loan?
Some can, usually through equipment financing, revenue-based products or the SBA microloan program. Without revenue or a trading history, most lenders will not consider the application. An asset that secures the loan is the most reliable way in.
How long do I need to be in business to get a loan?
Six months is a common minimum among online lenders, and a year or more widens your options. Two or more years typically opens bank and SBA lending.
What is the easiest loan for a new business?
Equipment financing, if you are buying a specific asset, because the asset secures it. Revenue-based financing asks less of your history but costs far more. The SBA microloan sets no minimum time in business.
Why do new businesses borrow for equipment?
In our data, 37.1% of first-year applicants are borrowing for equipment, more than for any other purpose. A new business often needs the asset before it can earn, and equipment financing is one of the few routes that does not lean on a trading history.
Will checking my options hurt my credit?
No. Checking your options doesn't affect your credit. A lender may run its own check later, but only if you choose to apply with them.
Is it hard to get a startup business loan?
Often, yes. It is harder than for an established business. Many lenders look for 6 to 12 months in business or more, and most online lenders want revenue. The more realistic routes for a startup are SBA microloans, some CDFIs and nonprofit loan funds, and equipment financing when you are buying an asset.
Can I borrow money to start a business with no revenue?
Sometimes, but most online lenders and advances need revenue. Routes that lean less on revenue are mostly SBA microloans, some CDFIs and nonprofit loan funds, and state startup programs. SBA 7(a) allows starting a business as a use, but lenders usually want owner equity and a plan, so it is rarely realistic in the first year.
How does a new LLC get a business loan?
Mostly through the owner's profile. Lenders weigh time in business, revenue and the owner's personal credit more than the LLC itself, and most ask for a personal guarantee, which makes you personally responsible if the business cannot repay. A business bank account and steady deposits help. Some online lenders publish that they lend only to corporations or LLCs.
Who qualifies for a startup business loan?
It depends on the product. Published floors run from about 6 months and a 550 score for a merchant cash advance to about a year and a 625 score at online lenders, last checked September 24, 2026. SBA microloans set no minimum time in business. A floor only means you can apply. See Business Loan Requirements by Lender (2026)
Figures in the table are shares of applicants in business under a year, from more than 1,000 funding applications to TopFunders.ai. They are self-reported and not verified, and they describe businesses that applied, not businesses that were approved or funded. The overall figures and method are in our small business funding study; this page cuts the same applications to one group. Market rates and requirements are typical ranges, not any lender's published terms. SBA microloan terms are per the SBA.