How easy is it for a start-up business to obtain adequate working capital financing

Short answer: It’s hard, but not impossible—expect higher rates, more paperwork, and personal guarantees, unless you build bankability signals first.

1. Bank reality check

• Traditional banks decline ~75 % of start-up working-capital applications because the firm has < 2 yrs tax returns, negative retained earnings, and no DSCR track-record .
• If approved, it’s usually a small SBA 7(a) line (up to $150 k) with the founder’s personal FICO > 680 and PG (personal guarantee)—process takes 45-90 days .

2. Fast-money lane

• Online lenders fund in 24 hrs, but:
  – APR 18–54 %
  – Weekly or daily ACH sweep
  – Max initial limit ≈ 50 % of last 3 mo revenue
  Still useful for 90-day bridge while you build bankability .

3. Fintech hybrid

• Revenue-based financing or invoice financing advances 70–85 % of open A/R; cost is 1–3 % per 30 days—ok if you have B2B invoices > $5 k each .

4. Free/low-cost boost

• SBA 7(a) Working-Capital Pilot (WCP) line: prime + 2.75 %, asset-based, can borrow against domestic & export orders; requires 680+ FICO and 2 yrs industry experience—best long-term rate you’ll get .

5. Practical path BusinessMoney.broker

1. Open two net-30 vendor accounts and a business credit card → pay early; this creates a PAYDEX 80+ in 90 days.
2. Layer a $10–25 k online line; draw < 30 % and repay weekly to build positive bank-flow history.
3. After six clean months, apply for SBA WCP or bank revolver; approval odds jump to ~65 % and rates fall 8–10 %.

Bottom line: expect expensive or slow money at first; treat early facilities as credit-building tools, not permanent solutions. Once PAYDEX, bank-flow, and revenue trend are documented, bankable working-capital becomes fairly easy—and cheap.