Fund a brand-new business with your own money plus an SBA Microloan or SBA 7(a) loan. Both SBA programs can be used to start a business, while grants and investors help some founders but are the exception, not the plan.
General information, not legal or financial advice.
When you're brand new, you have no revenue history, no business credit and no tax returns for the business. That shuts out a lot of lenders, and it puts you in the sights of anyone selling expensive money to people with no other options. I used to work that side. Here's what actually works when you're starting from zero.
For every option by situation, see Where to get funding for your small business.
Why startups have fewer options
Most online lenders and nearly every merchant cash advance want months of bank deposits or card sales, because that's how they get paid back. A startup has none yet. That leaves lenders that underwrite you, your plan and your own investment, rather than a sales history.
Your options, in the order to try them
- Your own money. Lenders and SBA want to see that you have something in the deal. Savings, a partner's investment, or money from family (in writing, with clear terms) also make the next steps easier.
- SBA Microloans. SBA Microloans go up to $50,000 to help small businesses "start up and expand." They're made by nonprofit community lenders, which make the credit decisions, set the terms, and often add free coaching. (SBA: Microloans)
- An SBA 7(a) loan. SBA lists "start a business" as an eligible use of 7(a) money, along with buying a business. You must be an operating, for-profit U.S. small business that's creditworthy and can't get reasonable credit elsewhere. (SBA: 7(a) terms and eligibility) Expect the lender to want your own money in the deal too. The SBA 7(a) Playbook explains how underwriters size that, including on buying an existing business, which is often easier to finance than a true startup.
- Equipment financing. If your startup needs a truck, oven or machine, the equipment can secure the loan.
- Grants and pitch competitions. Some exist for new founders, but many grants want a year or more in business. Check our Grant Finder and small business grants open now. Never pay a fee to get a grant (how grant fee scams work).
- Investors. If you're building something that could grow fast, Small Business Investment Companies (SBICs) are private firms licensed and regulated by SBA that invest through loans, equity or both. Equity means giving up a share of ownership. SBA notes that SBICs typically target mature, profitable businesses, so for a brand-new company they're a long shot. (SBA: Investment capital)
A worked example
Here are example numbers for a $60,000 startup, labeled as an illustration, not a quote:
- $15,000 Of your own money (25% of the total).
- A $45,000 SBA Microloan. Microloans can run up to six years. At an example rate of 12% over 72 months, the payment is about $880 a month.
- Rates are capped. On a microloan over $10,000, the lender can charge at most the rate SBA charges that lender, plus 7.75%. (SBA: terms and eligibility)
Compare that to a $45,000 merchant cash advance at a 1.35 factor rate: $60,750 paid back by daily debit in months, if you could even get one with no sales history. Run any offer through our cost of capital calculator.
How to get ready before you apply
- Write a real plan. SBA's guide covers what lenders and investors expect, and the financial section is where most new owners are thin. (SBA: Write your business plan)
- Know your startup costs line by line. Equipment, deposits, inventory, licenses and three to six months of operating cash.
- Pull your personal credit reports. With no business history, lenders lean on your personal credit. They're free at AnnualCreditReport.com. (FTC: free credit reports)
- Get free help. SBA's resource partners help with plans and loan packages. SCORE mentors are free, and Small Business Development Centers offer free or low-cost counseling. (SBA: resource partners)
- Use Lender Match. It connects you with SBA lenders, and you always work directly with the lender, not SBA. (SBA: Lender Match · SBA: 7(a) loans)
- Check any company before you share documents. See our Lender Reviews.
Red flags for new owners
- "Startup funding, no revenue needed, guaranteed." Real lenders can't promise approval before they see your file.
- An upfront fee before funding. That's the classic advance-fee scam. Report it at ReportFraud.FTC.gov.
- Someone who pitches a merchant cash advance the minute you open a bank account. Read why brokers call you, and if the calls start, see how to stop MCA broker calls.
Want help mapping it out?
If you'd like help working out which startup funding fits your plan, apply at MCAFax.
The worked example uses assumed numbers to illustrate, not a quote. The microloan payment assumes a fixed 12% rate with equal monthly payments over 72 months. Verify rates and terms with the lender in writing.
Last updated: October 8, 2026. Rules and agency pages in this area change. If something here is out of date, tell us at info@mcafax.com and we will fix it. MCAFax is not a law firm or a lender, and this is not legal or financial advice.
Sources:
- SBA: 7(a) terms, conditions and eligibility (eligible uses including starting a business; microloan rate caps and terms)
- SBA: Microloans
- SBA: 7(a) loans
- SBA: Investment capital (SBICs)
- SBA: Write your business plan
- SBA: Resource partners (SCORE, SBDCs)
- SBA: Lender Match
- SBA: Grants
- FTC: Free credit reports
- FTC: Report fraud