The Paintbrush Loan is a commercial term loan, backed by Paintbrush's unique income-driven guaranty. The full amount of the loan is deposited right after acceptance, after which the startup pays back the principal and interest monthly, amortized over the course of the full term.
Commercial loans, like the Paintbrush Loan, are a tried and true method for infusing non-dilutive growth capital into startups and giant corporations. The Paintbrush Loan is a term loan, which keeps repayment amounts a predictable flat amount.
Nearly all commercial loans for early-stage companies require a personal guaranty from the startup owner. Paintbrush also requires a personal guaranty from the startup owners, however repayment from the Paintbrush Loan's personal guaranty is repaid as a percentage of personal income.
The Paintbrush Loan is available for most industries except for content creation and companies creating new health/bio/pharma products & innovations. Learn more about what industries we can and can't support and why here.
While more established businesses could use a Paintbrush Loan, the primary focus is idea-stage startups—those who haven't launched yet or haven't gotten funding anywhere else yet, so we can help them get started. If you're further along than that and you still meet the loan criteria, great!
Paintbrush can lend to startups much earlier than other lenders.
Paintbrush does not take any equity ownership.
Interest on the loan repayment is tax deductible as a business expense.
Monthly repayment is a flat, predictable amount, which makes cash flow planning simple.
The Paintbrush Loan can work alongside other debt or equity financing.
The Success Team at Paintbrush helps answer questions and connect founders with with our partners, discounts, and other resources.
The Paintbrush Loan requires full repayment on the principal and interest.
Paintbrush requires a high credit score and strong income history.
Paintbrush cannot work with some types of businesses, including life science and content creation.
What happens if the business is successful
Woohoo! Congrats! You can go in any direction you want from here. We know we’re just a starting point. That’s why you maintain full control and ownership of your business, and you decide next steps. Want to go after VC funding and grow at hyperspeed? Great! Want to maintain ownership but need a larger loan now that you’ve proven out your model? No problem—you now have a track record to make those conversations easier. Planning on slow and steady growth bootstrapping on the revenue you have coming in? Go for it!
What happens if the business fails
If your company doesn’t succeed but your loan hasn't been repaid yet, your Paintbrush Loan will transition to personal guaranty repayment. This means two things will happen:
The personal guaranty of the Paintbrush Loan requires the founder backing the loan (acting as the personal guarantor) to repay the unpaid balance. Founders have the opportunity to apply for income-driven repayment in this situation, where they pay 15% of their personal income each month to service the remaining balance of the loan (capped at $75,000 or 5 years). Repayment is paused if your personal income is less than $50,000/year. Learn more about how income-driven repayment works here.
Payments will also likely switch to coming from your personal bank account rather than your business bank account, assuming that the business account no longer has the funds to pay.
As long as you're working with us, reporting your income and uploading your documentation, you never have to worry about getting sent to collections, losing your car or house, or anything else like you would with a traditional bank loan, credit card debt, or even SBA loans.
How to get it
Applying for a Paintbrush Loan is quick and simple. First, we recommend using our self-assessment tool to check if you are a likely fit for Paintbrush: Click here (1 minute). After the self-assessment, you can register for an account, fill out the application at your leisure and get a quick reply from Paintbrush.
You will also not get a hard pull on your credit from submitting an application, so there is no downside to applying except the time it can take to gather application information (you are busy building a new company after all).