Start-up business financing
No trading history is the hardest file in commercial finance. It is not an impossible one, and what you put in front of an underwriter decides it.
The short version
Start-ups are considered for equipment financing from $500 and for working capital from $10,000, though working capital is materially harder without revenue to point at. With no financials to read, underwriters fall back on three things: the owner’s credit, the owner’s industry experience, and the quality of the collateral. Strengthen those and a start-up file becomes workable.
Realistic expectations
What is realistic at each stage
“Start-up” covers everything from a business plan to eighteen months of trading, and the options widen sharply as revenue appears.
| Stage | Equipment finance | Working capital | What carries the file |
|---|---|---|---|
| Pre-revenue, not yet trading | Case by case, with a down payment | Rarely available | Owner credit and industry experience |
| 0–6 months trading | Possible on good collateral | Limited | Bank statements, down payment |
| 6–12 months trading | Yes, improving terms | Possible on consistent deposits | Deposit consistency |
| 12–24 months trading | Standard programs open up | Term loans and credit lines | Revenue trend, owner credit |
| SBA route, any stage | Separate process, longer timeline | SBA loans | Business plan, projections, collateral |
Ranges reflect published program terms. Approval, approval amount and terms are determined by the provider after underwriting and are not guaranteed.
What underwriters read
Three things that stand in for financials
With no profit and loss to analyse, the file is assessed on proxies. Make each one as strong as you can before applying.
Owner credit
On a start-up, personal credit is doing most of the work. Equipment programs generally begin around a 500 FICO, and better personal credit buys materially better pricing.
Industry experience
Years of running the same equipment or the same kind of business for someone else is the closest thing to a track record you can offer. Say it explicitly; it is not assumed.
Collateral quality
Titled, liquid, easily remarketed equipment makes a start-up deal far easier to underwrite than bespoke or fast-depreciating assets.
Presenting the file
Four things that turn a maybe into a yes
Bring a real quote
An invoice for identified equipment from a named vendor is underwritable. A budget figure is not.
Bring bank statements
Even a few months of a business account showing deposits moving the right way is evidence. So is a strong personal account where the business account is new.
Offer a down payment
On a start-up it is usually the difference between a decline and an approval, and it reduces the monthly payment too.
Expect a personal guarantee
On a business with no history, the owner is the covenant. Plan for it rather than being surprised by it.
Which product
Equipment finance or working capital
Equipment finance, from $500
Easier for a start-up because the equipment secures the transaction. New and used both qualify, with $1 buyout and fair market value structures, plus seasonal and deferred payment options for businesses with uneven cash flow.
Working capital, from $10,000
Harder without revenue, because there is no collateral and nothing to lend against but the business itself. SBA loans, term loans and revolving credit lines are the products; most want to see trading history.
A realistic sequence
Most start-ups finance equipment first, trade for a year, then come back for working capital on the strength of that record. Trying it the other way round is where a lot of time gets wasted.
Questions
Common questions
Can a brand new business get financing?
For equipment, yes — start-ups are considered, with the owner’s credit, experience and the collateral carrying the file. Working capital is materially harder before there is revenue to point at.
How much do I need as a down payment?
It varies with the deal. On a start-up file a meaningful down payment is usually the single most effective way to secure an approval, and it lowers the monthly payment as well.
Will my personal credit be checked?
Yes, on a start-up it is central to the decision, and a personal guarantee is usually requested. The first step is a soft pull that does not affect your score.
How long do I need to be in business?
There is no fixed minimum for equipment finance. Terms improve noticeably at around 6 to 12 months of trading, and standard programs generally open up after 12 to 24.
Can I finance a franchise?
Equipment and fit-out costs are financed routinely. Franchise fees are treated differently and are usually a working capital or SBA question.
What about an SBA loan?
SBA loans are in the network and are a genuine option for a well-prepared start-up, but they run on a longer timeline and need a business plan, projections and documentation. Start the conversation early.
Keep reading
Related pages
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