"And particularly because they all observe one rule which woe betides the banker who fails to heed it, Which is you must never lend any money to anybody unless they don't need it." - Ogden Nash

As a general rule, commercial banks have a low tolerance for credit risk. Accordingly, companies must have very favorable credit profiles to secure debt financing. The favorability of a company's credit profile depends on a number of factors, such its operating performance (e.g., EBITDA), the availability of collateral (e.g., accounts receivable, fixed assets), and the creditor's evaluation of other aspects of the business that may affect its ability to repay (e.g., market factors, industry trends, customer relationships). Because start-up and early-stage companies are unlikely to present more than limited or negligible revenue, and are even more unlikely to be cash flow positive, it is often difficult for such companies to obtain debt financing from banks, other than secured debt related to capital asset purchases (and even in those cases, the bank will usually require a personal guaranty).

All that said, it is not unusual for start-up and early-stage companies to receive debt from other sources. Early stage companies often obtain seed money from friends and family in the form of debt. In addition companies often borrow from their existing equity holders. Venture-stage companies have still more options, including venture debt and facilities from lenders in the business of extending credit to venture-backed companies, such as Silicon Valley Bank.