Most articles about startup business loans read like they were written for Silicon Valley unicorns. This one's for the person starting a pressure washing business, cleaning company, or mobile detailing service. The businesses that actually make money.

Here's the truth: getting a startup business loan is harder than funding an established business, but it's not impossible. Banks are nervous because half of all businesses fail within five years. They want proof you'll pay them back, and when you're just starting, that proof doesn't exist yet.

This guide covers how to get a startup business loan, what you need to qualify, and whether you should even get one. Because sometimes the best business loan is the one you don't take.

What Is a Startup Business Loan?

A startup business loan is money borrowed to launch a new business. These loans cover equipment, initial inventory, lease deposits, renovations, and working capital for those first months when revenue is spotty.

Loan amounts range from $500 microloans up to $5 million for SBA loans, but most startups realistically get between $10,000 and $100,000.

The catch: banks view startup loans as high-risk. No track record, no business credit history, no revenue. That means higher interest rates (7.31% to 7.61% APR), stricter requirements, and a personal guarantee, meaning if your business tanks, they can come after your personal assets.

Types of Startup Business Loans

SBA 7(a) Loans

The gold standard. The SBA guarantees loans from banks, reducing their risk.

• Amounts: $50,000-$350,000 for most startups
• Interest rates: 9%-12%
• Timeline: 60-90 days
• Requirements: 640+ credit score (680+ better odds), business plan, 10-20% down payment

SBA Microloans

For loans under $50,000 from nonprofit community lenders.

• Amounts: Up to $50,000
• Interest rates: 8%-13%
• Timeline: 30-45 days
• Requirements: More flexible on credit, may require business training

Equipment Financing

Loan to buy equipment that serves as its own collateral.

• Amounts: 80-100% of equipment cost
• Interest rates: 8%-30%
• Timeline: 3-10 days
• Requirements: 600+ credit score typically accepted

Works great for pressure washing equipment, cleaning machines, lawn care tools.

Online Lenders

Fast but expensive. OnDeck, Fundbox, etc.

• Amounts: $5,000-$250,000
• Interest rates: 15%-40% APR (sometimes higher)
• Timeline: 24 hours to 1 week

A $50,000 loan at 30% over 3 years costs $74,000 total. That's $24,000 in interest. Do the math first.

Avoid These

• Merchant Cash Advances: 40%-200% effective interest. Desperate times only.
• Invoice Factoring: Doesn't work for startups (no invoices yet).
• Payday-Style Business Loans: Run away.

What You Need to Qualify

Credit Score Requirements

• Traditional banks: 680+ often required, 720+ for best rates
• SBA loans: 620 on the low end, 680+ realistic, 720+ makes it easy
• Online lenders: 600-650 accepted (terrible rates), 550-600 possible
• Equipment loans: 600+ works
• Microloans: Often no hard minimum, 580+ typically fine

If you're below 640, focus on microloans, equipment financing, or fixing your credit first.

Time in Business

• Traditional banks: Want 2+ years (you won't get in)
• SBA loans: Accept startups with relevant industry experience (5+ years), detailed business plan, and strong credit
• Online lenders: Some accept 6 months
• Microloans: Often designed for startups

The workaround: operate small for 6 months, show revenue, then borrow to expand.

Documents You'll Need

Personal:

• ID and personal tax returns (2 years)
• Bank statements (3-6 months)
• Credit report
• Resume showing industry experience

Business:

• Business plan (10-25 pages)
• Financial projections (3-5 years)
• Startup cost breakdown
• Business registration documents
• Licenses and permits

The business plan doesn't need corporate jargon. Just explain what you do, who buys from you, how you'll make money, your startup costs, and how you'll repay the loan.

The Application Process

Step 1: Calculate What You Actually Need

Don't guess. Example for a pressure washing startup:

• Equipment: $6,500
• Used truck: $20,000
• Insurance/licenses: $2,500
• Working capital (3 months): $6,000
• Total: $35,000

You cover from savings: $10,000

Loan needed: $25,000

Step 2: Check Your Credit

Pull your report free at annualcreditreport.com. If you're below 640, either improve your credit for 6 months or go with microloans.

Step 3: Research and Pre-Qualify

Start with SBA Lender Match (sba.gov/lendermatch). Apply to 3-5 lenders on the same day (credit bureaus count multiple inquiries within 14-30 days as one).

Step 4: Prepare Your Application

Write your business plan covering:

• What you do and who buys from you
• Market analysis (competitors, pricing)
• How you'll deliver your service
• Financial projections (startup costs, revenue, expenses)
• Your background and experience

Base projections on real numbers, not fantasies. A solo pressure washing operation won't hit $500,000 in year one. Project $60,000-$80,000 and show how that covers your loan payment.

Step 5: Wait for Approval

• SBA loans: 60-90 days total 
• Microloans: 30-45 days 
• Equipment financing: 3-10 days 
• Online lenders: 1-7 days

Respond to document requests within 24 hours or your application slows down.

Step 6: Review Terms Carefully

When approved, check:

• Total loan amount and monthly payment
• APR (includes all fees)
• Prepayment penalty?
• Personal guarantee language

Calculate total cost. A $30,000 loan at 10% over 5 years costs $38,185 total. That's $8,185 in interest.

Why Loan Applications Get Rejected

Banks reject 80% of startup applications. Here's why:

• Poor credit: Below 640 with traditional lenders means no. Fix your credit or try microloans.
• No industry experience: Starting a restaurant with no food service background? Rejected. Get experience first.
• Weak business plan: Generic templates with fantasy projections get tossed. Do real research.
• No skin in the game: Trying to borrow 100% with $0 from your pocket? Banks want 10-20% down.
• Too much existing debt: Already drowning in credit cards and car loans? They won't add more.
• Wrong loan amount: Too little means you'll fail. Too much means you don't understand costs. Calculate carefully.
• Can't show repayment ability: If projections show years of losses, no one will lend.

Better Than Loans: The Unsexy Approach

Here's what most articles skip: you probably don't need a loan at all.

The best startup funding is customer money. Start small, get customers, use revenue to grow.

Pressure Washing Example:

• Month 1: Buy basic washer ($500), use your truck, get 10 customers at $150 = $1,500
• Month 4: Buy commercial washer ($3,000) with revenue
• Month 7: Buy dedicated truck ($15,000) with saved profit
• Month 12: Hire first employee with ongoing revenue

Total borrowed: $0

This takes longer than borrowing $50,000 upfront, but you risk less and keep all profits. No interest. No personal guarantee. If it fails, you're out $500, not $50,000.

When Borrowing Makes Sense

Get a loan when:

• Equipment pays for itself in 3-6 months
• You have signed contracts ready but need equipment to fulfill them
• The alternative costs more (renting at $200/day vs. buying for $5,000)

Don't borrow when:

• You're not sure the business will work (test it first)
• You can start smaller
• The loan payment will stress cash flow
• You're terrified of the personal guarantee

Quick Alternatives

• Friends and Family: Most common startup funding. Put terms in writing, set repayment schedules, pay interest (5-8%).
• Equipment Dealers: Many offer in-house financing. Buy a $5,000 washer, pay $200/month.
• Business Credit Cards: 0% intro APR (12-18 months) can work for under $10,000. Pay it off before rates jump to 18-25%.

After You Get the Loan

• Use funds as planned. Don't use equipment loans for personal bills.
• Set up auto-pay immediately. One missed payment drops your credit 60-110 points.
• Track cash flow weekly. Revenue won't be steady. Build a 2-3 month payment buffer.
• Don't borrow again soon. Wait until your first loan is 50% paid off and you've been profitable for 6+ months.

The Bottom Line

Debt speeds up growth but adds risk. For every business that borrows $50,000 and succeeds, another borrowed, failed, and is now paying it back from their day job for five years.

You’re generally in a good position to take out a loan when you have a few years of industry experience, have already proven your business concept on a small scale, and know that the equipment you’re financing will generate revenue right away. A solid credit score, typically 680 or higher, also helps you secure better terms, and it’s important to be confident you can handle the payments even during slower months.

On the other hand, it’s usually best to avoid borrowing if you’re entering an industry you’ve never worked in, if you’re unsure whether there’s real demand, or if you could reasonably start smaller and grow through bootstrapping. A weak credit profile, generally below 640, or monthly payments that would create financial strain are also strong signs to hold off on taking a loan for now.

Most profitable service businesses start with under $5,000. Pressure washing, cleaning, lawn care, mobile detailing, handyman, all can launch for under $5,000 if you start small. Borrowing $50,000 to start pressure washing is overkill. Borrowing $10,000 for a commercial washer after you've proven the concept with a $500 model? That's smart.

That's the unsexy approach. If you’re looking to start something of your own, check out the Unsexy Businessmen Suite, or schedule a consultation for any advice you need.

Start small. Prove it works. Then borrow to scale if needed.