What Is the Best Way to Borrow Money to Start a Business?
The best way to borrow money to start a business depends on what you already have: assets to finance, investors behind you, or early revenue. Each opens a different door, and pretending one path fits everyone is how founders end up in expensive debt.
Last updated · Reviewed by Cody Dreis
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The Full Answer
If the money buys equipment, start with equipment financing. The asset secures the loan, approval leans on your personal credit rather than business history, and rates stay reasonable. If you need smaller working capital, SBA microloans exist specifically for early-stage businesses. If you have raised equity funding, venture debt extends your runway without further dilution. And if you can possibly launch lean first, do it: a business with even 3–6 months of consistent deposits qualifies for dramatically better options than a pre-revenue idea, because lenders fund evidence, not plans.
The worst way to borrow for a launch is grabbing whatever approves fastest without pricing it. High-cost capital plus zero revenue is the combination that sinks new businesses.
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Written by
Cody Dreis
Founder, Quordx Capital
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