Product Selection
What loans can a startup get to cover startup costs?
Startups without revenue history have the hardest time qualifying for traditional loans, so the realistic options are SBA microloans (up to $50,000 via mission-based lenders), equipment financing (the asset secures the loan), and business credit cards — plus personal-credit-based options. Conventional term loans and lines of credit generally require 1-2 years in business and steady revenue.
The full picture
Why Startups Are Hard to Finance — and What Actually Works
Most business loans underwrite on time-in-business and revenue history, which a startup doesn't have yet. That's why conventional term loans and bank lines of credit usually require 1-2 years of operations and consistent revenue. Realistic startup options instead rely on something other than business track record: SBA microloans (delivered through mission-based community lenders that weigh the business plan and character), equipment financing (where the equipment itself secures the loan), and the owner's personal credit. Be wary of any product promising easy approval for a brand-new business — the honest reality is that startup financing is limited and underwriting-intensive.
SBA Microloans and Equipment Financing
The SBA microloan program provides loans up to $50,000 through nonprofit, mission-based intermediary lenders that serve newer and underserved businesses — often pairing the loan with business mentoring. Equipment financing works for startups because the loan is secured by the asset being purchased, so the lender's risk is collateralized even without a revenue history. Both are more accessible to a startup than an unsecured term loan.
Personal Credit and Realistic Planning
For very early startups, financing often depends on the owner's personal credit — through business credit cards for startups or personal-guarantee-backed products. Strong personal credit (and a clear, documented business plan) materially expands the options. Plan conservatively: borrow only what a realistic revenue ramp can service, and avoid high-cost fast-cash products that can strain a business before it finds its footing.
- SBA microloan: up to $50,000 via mission-based lenders; weighs plan + character, not just revenue history
- Equipment financing: the asset secures the loan — accessible to startups buying equipment
- Business credit cards / personal-credit options: common earliest-stage tools
- Conventional term loans & bank lines: generally need 1-2 years in business + steady revenue
- Borrow only what a realistic revenue ramp can service; avoid easy-approval high-cost traps
Example: New Café Funding Build-Out Equipment
A first-year café needs $45,000 for espresso machines and kitchen equipment but has no revenue history for a term loan. Equipment financing matched through ClearValue Lending secures the loan with the equipment itself, making approval feasible at the startup stage. The owner applies once at ClearValue Lending and is routed to the funding partners best matched to it.
Sources
- The SBA microloan program provides loans up to $50,000 to small businesses and certain not-for-profit childcare centers through nonprofit, community-based intermediary lenders that also offer business-based training and technical assistance. — SBA — Microloan Program
- The Federal Reserve's Small Business Credit Survey reports that newer firms (under five years) are approved for financing at lower rates than mature firms, reflecting the difficulty startups face accessing traditional credit. — Federal Reserve — Small Business Credit Survey
- Equipment financing is typically secured by the equipment being purchased, allowing lenders to extend credit based on the asset's value rather than solely on the borrower's operating history. — SBA — Loan Programs
Key takeaways
- Startups can't underwrite on revenue history — lean on asset-secured (equipment) and mission-based (SBA microloan) options.
- SBA microloans up to $50,000 weigh your plan and character, not just financials.
- Equipment financing is one of the most startup-accessible products because the asset is the collateral.
- Strong personal credit + a documented plan widen the options; avoid easy-approval high-cost traps.
- ClearValue Lending routes startup borrowers to the funding partners best matched to their file — one application, routed to the right partners.
Related products
SBA Loans
The longest terms and lowest rates a small business can access — when you can wait for them.
Learn more →Equipment Financing
Self-collateralized financing — keep working capital where it belongs.
Learn more →Term Loan
Fixed amount, fixed term, fixed payments — predictable financing for major investments.
Learn more →Related guides
Published 2026-05-22 · Updated 2026-08-11 · https://clearvaluelending.com/answers/business-loan-for-startup-costs