Can I Get a Loan if I’ve Been in Business Less Than a Year?


Your first year of business is going to test you, mentally, emotionally, and financially.

You may need a bit of financial help during those first tumultuous 12 months, but you may not find a lot of options for businesses as young as yours.

Fortunately, there are options. There are organizations out there that are more interested in your business’ future than your past. So, to help you sort your options, here’s a glance at the most popular choices.

A Merchant Cash Advance

This is likely your best option if you’re in need of fast funding and you’ve only been in business under a year. A merchant cash advance isn’t a loan, it’s a form of funding. This means they’re not bound by traditional lending restrictions.

You may qualify if:

  • You’ve been in business for more than 2 months
  • You have monthly deposits over $10,000


If you meet both those criteria, you should probably go see your options at and find out what’s possible. They are very willing to work with new businesses and start-ups like yours.

Getting funding today also opens the door for future funding options. You can establish a payment history and track record with that funder. If the need for more funding arises down the line, you have data and a proven track record. Versus someone walking off the street

A Bank Loan

If you’ve been in business for less than a year, you should probably just skip going to a major bank. They may give you a small business loan if you have a long (and fruitful) history with them. Maybe you’ve successfully launched a different business with them.

However, if you’re going in with a clean slate, they will see you as a risk. This is why the major banks are currently turning away about 8/10 of all small business loan applicants.

Small Business Association Loans

Small Business Association (SBA) loans are easier to get than loans through major banks, because they’re actually provided by private lenders. However, they’re still not exactly easy to get and you’re not going to get one unless you’ve been in business for two years.

They have programs for “new businesses,” but those businesses still have to be at least 2 years old.

A Business Credit Card

If you can’t get a traditional small business loan, you might look into getting a business credit card.

These are available to business owners who have been operating for under a year. However, keep in mind that the less proven your business is, the higher your fees and cost-of-borrowing will likely be.

The other downside to a business credit card is that you will most often have to sign a personal guarantee to get one, particularly if you’re a new business.  This means that you, as the business owner (not the business entity) are personally responsible for the balance on the card in the event that you default. This means that if your business has to close for reasons beyond your control, you are still personally responsible. This can ravage your personal finances and damage your credit score.

The longer you’re in business, the easier borrowing will get. However, in your first year, you might want to consider the MCA as your best option to add some more cash to your business, as most loans are off the table and the business credit card comes with a lot of personal risk.

Choose carefully and always thoroughly research your options!