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The average cost of the CPA exam, including required fees, is about $1,330, but the exact cost varies for each candidate. The biggest reason for this is that every state has its own board of accountancy, each of which sets its own costs for additional fees that are needed to sit for the exam.

There are also necessary costs that aren’t tied to the exam itself, such as licensing fees and continuing education costs. If you have to retake or reschedule the exam, you may have to repay registration and examination fees. Plus, the single most expensive part of the process tends to be the review course, the price of which can vary widely.

Taking the CPA exam can be expensive. Fortunately, there are many ways to cover the costs, and the price can be well worth it if you pass the exam.

How Much Does It Cost to Take the CPA Exam?

As noted, the cost to take the CPA exam, including all required fees, is about $1,330, but your final cost will depend on where you live and the review course you choose. As a result, you could end up paying much more or less than this amount. However, while the total cost can vary significantly, there are certain items that are common expenses for all exam candidates.

This is a wide range, but that is expected given that the costs can vary from one state to another. The fees shown above are approximate, and your state’s fees may be higher or lower.

In addition, the CPA review courses sometimes have tiered pricing, so two people taking the same course and living in the same state may have different costs. There can be several differences between various tiers of review courses, such as 24-month access versus lifetime access.

Do You Need a Finance Degree to Take the CPA Exam?

Each of the 55 licensing jurisdictions, which include all 50 states, plus Washington DC, Guam, Puerto Rico, the Virgin Islands, and the Mariana Islands, maintains its own licensing requirements. Consequently, each state may have slightly different requirements to sit for the exam.

All 50 states require a bachelor’s degree as well as 150 credit hours in order to become a licensed CPA. However, rather than requiring a finance or accounting degree, states may instead require 120 hours of college credit plus 30 additional, accounting-specific hours to sit for the exam.

It is important to review your state’s requirements before you begin preparing for the exam. While some states require 30 hours of accounting courses, others may require upper-level accounting courses. Your state or territory’s board of accounting website will list the specific requirements needed to sit for the exam.

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Other CPA Exam Costs

There isn’t just one fee to sit for the CPA exam. Candidates must cover several costs, all of which vary depending on where you live. This is one of the reasons the cost can be quite different from one state to the next.

Ethics Exam

Your state may require you to take and pass an ethics exam in order to practice there. Some states have their own ethics exams, while others administer the American Institute of Certified Public Accountants (AICPA) exam. Currently, the AICPA exam costs $250-$320 depending on the course option you select.

Registration Fees

Most states require a registration fee for each of the four exam sections. Fees vary but are generally $10-$100 per section. Some states also have tiered pricing for registration, allowing you to save money if you register for multiple sections at once. If you choose to register for multiple sections at once, keep in mind that each section is estimated to take four hours, with a total of 16 hours for the entire exam.

Application Fees

Application fees are due when you apply to take the CPA exam. These vary since each state sets its own fees, but they are usually between $50 and $400. The fee is nonrefundable, but you usually don’t have to pay the application fee again if you have to retake the exam. However, if your application is rejected, you may have to pay the fee more than once.

CPA Licensure

The CPA licensure fee is only necessary after you pass the exam. This is the fee you pay to your state accountancy board to be a licensed accountant. These fees also vary by state and can run anywhere from $50-$400. This is an annual cost, so you should expect to pay the fee every year to maintain your license.

Keep in mind that each state has its own licensing requirements and accountancy board. If you move out of state, you will have to be licensed in the new state to be recognized as a CPA there.

Background Check

Your state may require you to pass a background check as part of the licensing process. These fees can range anywhere from $30 to $100. In the case of California, there is an additional “rolling” fee of $15 for fingerprinting.

Travel and Accommodations

Currently, the CPA exam cannot be taken online and can only be administered at Prometric Testing Centers. You can find a testing center with Prometric’s Pro Scheduler. These centers are located only in select cities, so you may end up with additional expenses for transportation and accommodations, depending on how close you are to a testing site.

International Candidate Credential

If you want to take the exam outside the United States, you may be required to pay additional fees for international candidate credentialing. Also, most states allow international applicants to sit for the exam, but several states and territories do not. In addition to any domestic fees, you may also have to pay fees of $356 for each of the following: Auditing and Attestation (AUD), Financial Accounting and Reporting (FAR), Taxation and Regulation (REG), and one discipline, such as Business Analysis and Reporting (BAR).

Covering CPA Exam Costs

Although the exact cost of the CPA exam can vary significantly, one thing is certain: The exam and licensing process is expensive. Fortunately, there are many ways to cover the costs.

Private Student Loan

A private student loan can help you cover some or all of the costs of the CPA exam. For example, SoFi private student loans have no fees, come with multiple repayment options, and have low fixed and variable rates. Everything is handled online, and the application process is simple.

Private student loans are different from federal student loans. Federal student loans are available only to currently enrolled undergrad or grad students whose school includes the exam expenses in the official cost of attendance. Federal student loans may have more consumer protection, but private student loans may offer more competitive interest rates. Consider both private and federal student loans if you need to finance your CPA exam costs.

Credit Card

You may be able to pay for some or all of your costs with a credit card. In fact, if paying online, payment by credit card may be required for examination fees. The same may be true for application and registration fees.

Since exam prep courses are offered by third parties, using a credit card is a standard payment method for your review.

Personal Savings

If possible, you should avoid using emergency funds, but personal savings can help cover exam costs. If you aren’t able to pay for the entire expense using your savings, scholarships, grants, and both federal and private student loans can help you cover what is left. Personal savings can be useful, though, particularly if you still owe money after considering other options.

Scholarships

There are several scholarships available that can help you cover much of the cost of the CPA exam. For instance, the AICPA offers a scholarship of up to $1,000 to exam candidates. Another example is the Newt D. Becker scholarship, which is worth up to $2,499.

Your state board may also offer scholarships. For example, Wisconsin offers several $3,000 college scholarships as you work toward your 150 hours required to sit for the exam. Check with your state board to see if your state offers any additional scholarships.

Employer Reimbursement

Some employers will reimburse you for the cost of the exam itself, review materials, or both. If you work for an accounting firm, and the exam is relevant to your job, it’s a good idea to ask whether your employer reimburses these costs.

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The Takeaway

There are many costs associated with the CPA exam, from prerequisite coursework to maintaining your license every year. Each of the 55 licensing jurisdictions has its own requirements and fees, so where you live can affect not only licensing requirements but also the cost of the whole process.

Without a doubt, becoming a licensed CPA isn’t cheap. The price tag is likely to be four figures, which is high, especially before you are certified. However, you have options, including private student loans, to help cover the cost of the exam and related requirements.

If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.

FAQ

How much does the CPA exam cost to take?

The cost for the exam and required fees is about $1,330, but the exact amount depends on where you live. Each state sets its own fees, so they may vary significantly from one to the other. Exam prep courses can also add to the overall cost.

Are there any hidden costs to take the CPA exam?

If you have considered all of the costs mentioned here, there should not be additional hidden fees for the CPA exam. However, there may be some fees you don’t anticipate. For example, if you have to retake or reschedule the exam, you may have to repay the registration fee in addition to repaying fees per exam section.

Is the CPA ethics exam required in all states?

Most states require candidates to take an ethics exam. Many require only the AICPA ethics exam, while some require a state-specific course and exam. A few states, including Pennsylvania and Michigan, do not require an ethics exam as part of the CPA licensing process. Check the specific requirements for your state.

What happens if you don’t pass the CPA exam?

If you fail a section of the CPA exam, you must wait 24 hours after receiving your score to reschedule the test. It is important to check your state’s requirements for retaking the exam. You will also need to pay retake fees, which include a reapplication fee.

Photo credit: iStock/ridvan_celik

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SOISL-Q126-015

The median annual salary for delivery drivers in 2024 was $42,770, according to the Bureau of Labor Statistics. However, data from Zippia published in 2026 suggests drivers can earn up to $62,000 depending on location and experience. What’s more, the United Parcel Service (UPS) reports that the average overall compensation package for a full-time UPS package delivery driver is $145,000.

For those who like working independently and being behind the wheel, a career as a UPS driver could be a good fit. Keep reading for a breakdown of how much UPS drivers can earn and what this role entails.

What Are UPS Drivers?

UPS drivers pick up and deliver packages on a designated driving route for UPS, a global package delivery and logistics company. They can have local or long-haul routes that include stops at residential and business addresses. You may well be familiar with the brown UPS trucks arriving and departing from your home or workplace.

Being a UPS driver can be a good option for introverted people, since much of the day is spent solo, though there can be some social interaction when dropping off packages and getting signatures for them. Obviously, a UPS driver will need to be comfortable behind the wheel, driving in heavy traffic and unknown locations, and ensuring that parcels get from point A to point B within deadlines.

In terms of qualifications, you will likely need to be at least 21 years old, have a valid noncommercial driver’s license, a clean driving record, and be able to physically move packages of up to 70 pounds. If you have these qualifications, being a UPS driver can be a well-paying job that doesn’t require a college degree.

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How Much Do Starting UPS Drivers Make a Year?

If someone is new to working as a UPS driver, they shouldn’t expect to earn a top salary just yet. The entry-level pay for a full-time UPS delivery driver is approximately $23.00 per hour and $21.00 per hour for part-time. These figures are well above the national minimum wage.

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What Is the Average Salary for a UPS Driver?

You’re probably curious about how much a UPS driver can make annually or on a salary vs. hourly rate. The average hourly pay for UPS drivers can range from $19.56 to $30.05, depending on the state. The table below illustrates how UPS delivery drivers’ average annual and hourly pay can vary by state.

What Is the Average UPS Driver Salary by State for 2026

💡 Quick Tip: Income, expenses, and life circumstances can change. Consider reviewing your budget a few times a year and making any adjustments if needed.

UPS Driver Job Considerations and Benefits

A job as a UPS driver can appeal to those who have not earned a college degree and those who enjoy driving. However, this can be a physically demanding job given that you are behind the wheel and carrying packages all day, and it may be stressful to be in traffic or dealing with the pressures of getting packages to their destination. Many workers, however, will enjoy the independence.

Along with receiving a salary, UPS drivers also gain access to valuable employee benefits. This table highlights the current benefits for full-time UPS drivers.

Pros and Cons of a UPS Driver’s Salary

There aren’t any notable cons associated with the UPS driver salary. These roles are in high demand and often regarded as having competitive pay and great employee benefits. The main questions may be whether the job suits a particular employee’s needs and if they enjoy the challenges of the job, such as driving all day.

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The Takeaway

The average full-time delivery driver in the US makes around $42,000 a year, while UPS package delivery drivers average $40,000 to $62,000. UPS salaries vary by location and experience. In addition to pay, UPS drivers gain access to valuable employee benefits such as employer-sponsored health care, paid time off, and a pension plan. These benefits can help people balance their budget and enjoy a good quality of life, personally and financially.

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FAQ

Can you make 100K a year as a UPS driver?

Yes, it may be possible to make $100,000 or more a year as a UPS driver, depending on where you work, how long you have been on the job, and what your specific role is. UPS drivers earn good salaries, and on average, full-time drivers earn a compensation package of up to $145,000, according to UPS.

What factors influence UPS driver pay?

UPS driver pay can vary based on what state you work in, your level of seniority, and your particular role. Depending on your position, other factors may include hours worked, the route type, and your qualifications.

Do people like being UPS drivers?

Many people enjoy being a UPS driver due to the independent and consistent nature of the work. Those who prefer to spend their days on their own versus working on a team could enjoy this role.

Is it hard to get hired as a UPS driver?

Because UPS drivers earn good salaries and have robust benefits packages, these can be competitive roles to land. That said, UPS hires drivers across the country, so there are many job opportunities with this company.

Is it worth becoming a UPS delivery driver?

Being a delivery driver sometimes involves lifting heavy packages. This, together with sitting in the same position while driving all day, can make it a physically demanding job. However, UPS benefits can make it worthwhile.

About the author

Jacqueline DeMarco

Jacqueline DeMarco is a freelance writer who specializes in financial topics. Her first job out of college was in the financial industry, and it was there she gained a passion for helping others understand tricky financial topics. Read full bio.

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SORL-Q126-003

With the cost of higher education out of reach for many, more young people are flocking to high-paying trade jobs that don’t require a bachelor’s degree. Many of these jobs pay well, but they are typically in high demand due to unpredictable job markets and economic conditions.

What Is a Trade Job?

A trade job is a profession that doesn’t require a college degree, but rather a specialized skill or skill set obtained through a trade school or on-the-job experience and training. Popular trade jobs include construction managers, technicians, dental hygienists, mechanics, commercial pilots, and real estate brokers.

Pros of a Skilled Trade Job

A skilled trade job can be an attractive career path for a couple of reasons:

Educational Requirements

Unlike careers that require a college degree — which can cost hundreds of thousands of dollars and take four years to complete — trade jobs can often be obtained with less than two years of specialized education and at a fraction of the cost. Some trade jobs do not require any supplemental education at all, allowing trade workers to earn a living without being saddled by student loan debt.

Job Security

Many trade jobs are in high demand due to the specialized knowledge and skilled physical labor needed to perform them. They can also have a lower risk of outsourcing or automation because they require a human to be physically present.

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Cons of a Skilled Trade Job

On the other hand, there are downsides to some trade jobs, including:

Physical Demands

Trade jobs involving physical labor, such as construction workers and mechanics, can take a toll over the course of a long career.

Potential Dangers

Certain trade jobs have high injury and mortality rates, particularly those involving the operation of heavy machinery or working in hazardous environments.

25 Trade Jobs That Make the Most Money

Despite the conventional wisdom that a bachelor’s or master’s degree is required to earn a good salary, trade jobs can pay very well. In fact, some of the highest-paying jobs in certain states are skilled trades.

Here are 25 of the highest-paying trade jobs in the last several years, according to data from the U.S. Bureau of Labor Statistics:

1. Transportation, Storage, and Distribution Manager

•   2024 Median Annual Salary: $102,010

•   Requirements: High school diploma or equivalent, 5+ years of work experience

•   Job Description: Supervise and coordinate the transportation, storage, testing, and shipping of materials or products in accordance with government regulations.

•   Duties:

◦   Supervising workers involved in receiving or shipping

◦   Inspecting warehouse and equipment safety

◦   Analyzing logistics and collaborating with other departments

2. Elevator/Escalator Installers and Repairer

•   2024 Median Annual Salary: $106,580

•   Requirements: High school diploma or equivalent, apprenticeship, license (most states)

•   Job Description: Assemble, install, maintain, and fix elevators, escalators, chairlifts and other moving walkways and equipment. In addition to understanding the mechanics and components of each system, they are typically involved in the physical repair or replacement of parts, as well as testing equipment to ensure it meets specifications.

•   Duties:

◦   Assembling elevators, escalators, and similar units

◦   Conducting preventative maintenance and inspections

◦   Maintaining service records

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3. Nuclear Power Reactor Operator

•   2023 Median Annual Salary: $120,350

•   Requirements: High school diploma or equivalent, long-term on-the-job training, U.S. Nuclear Regulatory Commission license

•   Job Description: Control and maintain the systems that generate and distribute power to businesses, homes, or factories. This can include monitoring and adjusting control rods to moderate the amount of electricity a plant generates, controlling cooling systems, and implementing safety procedures.

•   Duties:

◦   Monitoring voltage and electricity grids

◦   Adjusting control rods and electricity output

◦   Recording systems data

4. Radiation Therapist

•   2023 Median Annual Salary: $98,300

•   Requirements: Associate degree (preferred) or certificate, state and national license

•   Job Description: Administer radiation therapy to patients with cancer.

•   Duties:

◦   Explaining treatment plans to patients

◦   Calibrating and operating radiation machinery

◦   Monitoring patients and keeping records of treatment

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5. Subway and Streetcar Operator

•   2023 Median Annual Salary: $84,270

•   Requirements: High school diploma or equivalent, moderate on-the-job training, local transit training program (varies by location)

•   Job Description: Operate subways and aboveground street cars, ensuring passengers safely move from one location to another.

•   Duties:

◦   Operating train controls

◦   Making announcements and providing verbal directions to passengers

◦   Ensuring passenger safety

6. Nuclear Medicine Technologist

•   2024 Median Annual Salary: $97,020

•   Requirements: Associate degree from an accredited nuclear medicine technology program, state license, long-term on-the-job training

•   Job Description: Prepare and administer radioactive drugs for imaging or treatment, typically within hospitals, medical labs, and care centers.

•   Duties:

◦   Explaining medical procedures to patients

◦   Preparing and administering drugs

◦   Maintaining and operating imaging equipment

7. Gas Plant Operator

•   2023 Median Annual Salary: $82,560

•   Requirements: High school diploma or equivalent, long-term on-the-job training

•   Job Description: Oversee the day-to-day operations of industrial power plants used by utilities, oil and gas, and manufacturing companies.

•   Duties:

◦   Maintaining equipment and machinery

◦   Ensuring compliance with safety and regulatory standards

◦   Supervising employees and contractors at the plant

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8. Dental Hygienist

•   2024 Median Annual Salary: $94,260

•   Education Requirements: Associate degree, state license

•   Job Description: Examine patients for oral diseases and provide preventative care and education about oral hygiene.

•   Duties:

◦   Taking dental x-rays

◦   Assisting dentists in providing teeth cleaning and plaque removal

◦   Educating patients about oral hygiene techniques

9. Diagnostic Medical Sonographer

•   2024 Median Annual Salary: $89,340

•   Requirements: Associate degree, state license or certification (some states)

•   Job Description: Operate sonographs to produce images of the inside of a body to assess and diagnose medical conditions.

•   Duties:

◦   Prepping and administering sonograph exams

◦   Reviewing images and test results for quality

◦   Analyzing diagnostic information and providing summaries for physicians

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10. Electrical Line Installer and Repairer

•   2024 Median Annual Salary: $92,560

•   Requirements: High school diploma or equivalent, long-term on-the-job training

•   Job Description: Install and repair cables or wires used in electrical power systems and telecommunications systems.

•   Duties:

◦   Installing, inspecting, and testing power lines and equipment

◦   Identifying defective devices, transformers, and switches

◦   Installing power lines between buildings and structures

11. Construction Manager

•   2024 Median Annual Salary: $106,980

•   Requirements: High school diploma or equivalent, 5+ years of experience

•   Job Description: Supervise and coordinate the activities of construction workers.

•   Duties:

◦   Overseeing construction projects

◦   Scheduling and supervising on-site contractors

◦   Preparing and monitoring budgets

12. Aircraft and Avionics Equipment Mechanic and Technician

•   2024 Median Annual Salary: $79,140

•   Requirements: Certificate from a Federal Aviation Administration-approved program

•   Job Description: Repair and perform maintenance on aircraft.

•   Duties:

◦   Diagnosing mechanical and electrical issues

◦   Repairing aircraft components

◦   Testing aircraft parts with diagnostic equipment

13. Boilermaker

•   2024 Median Annual Salary: $73,340

•   Requirements: High school diploma or equivalent, apprenticeship

•   Job Description: Assemble, maintain, and repair boilers, vats, and other containers used to hold liquids and gas.

•   Duties:

◦   Reading blueprints to determine where to position boiler parts

◦   Assembling boiler tankers using welding machines

◦   Cleaning boiling vats and replacing broken valves and pipes

14. Wellhead Pumper

•   2023 Median Annual Salary: $71,830

•   Requirements: High school diploma or equivalent, moderate on-the-job training

•   Job Description: Operate power pumps and equipment used to extract oil or gas from an oil field well.

•   Duties:

◦   Assembling pumps and attaching hoses to wellheads

◦   Operating pumps and monitoring flow

◦   Transferring oil to storage tanks or trucks

15. Electrical and Electronic Engineering Technologist and Technician

•   2024 Median Annual Salary: $77,180

•   Requirements: Associate degree (preferred), certificate from accredited program

•   Job Description: Assist electrical engineers with the design and development of communications equipment, computers, medical devices, and other electrical equipment.

•   Duties:

◦   Designing and assembling electrical systems

◦   Observing onsite systems placement and performance

◦   Performing quality control and identifying issues

16. Real Estate Broker and Sales Agent

•   2024 Median Annual Salary: $58,960

•   Requirements: High school diploma or equivalent, licensing exam

•   Job Description: Help clients buy, sell, or rent their properties.

•   Duties:

◦   Generating lists of properties for sale or rent and showing them to clients

◦   Advising clients on prices, mortgages, and market conditions

◦   Facilitating buyer/seller negotiations and final purchase or rental agreements

17. Respiratory Therapist

•   2024 Median Annual Salary: $80,450

•   Requirements: Associate degree

•   Job Description: Provide care for patients with respiratory issues.

•   Duties:

◦   Examining patients and recording symptoms and conditions

◦   Consulting with physicians on treatment

◦   Performing diagnostic tests

18. Construction and Building Inspector

•   2024 Median Annual Salary: $72,120

•   Requirements: High school diploma or equivalent

•   Job Description: Review building plans to ensure construction meets local and national regulations and ordinances.

•   Duties:

◦   Monitoring construction to ensure compliance

◦   Inspecting electrical and plumbing systems to ensure they are up to code

◦   Issuing violations for noncompliant work

19. Millwright

•   2023 Median Annual Salary: $62,980

•   Requirements: High school diploma or equivalent

•   Job Description: Install, dismantle, repair, reassemble, and move machinery in factories, power plants, and construction sites.

•   Duties:

◦   Repairing and replacing malfunctioning equipment

◦   Cleaning, adjusting, and calibrating new machinery

◦   Moving machinery and equipment

20. Electrician

•   2024 Median Annual Salary: $62,350

•   Requirements: High school diploma or equivalent, apprenticeship, license (most states)

•   Job Description: Install, maintain, and repair electrical power, communications, lighting, and control systems.

•   Duties:

◦   Identifying and repairing electrical problems

◦   Installing wiring and equipment for electrical systems

◦   Ensuring compliance with national and local codes

21. Plumber, Pipefitter, and Steamfitter

•   2024 Median Annual Salary: $62,970

•   Requirements: High school diploma or equivalent, apprenticeship

•   Job Description: Install and repair gas and water piping systems in homes, factories, and businesses.

•   Duties:

◦   Identifying and repairing plumbing problems

◦   Installing pipes and plumbing fixtures

◦   Cleaning drains, removing obstructions, and repairing or replacing broken pipes and fixtures

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22. Mining Roof Bolter

•   2023 Median Annual Salary: $66,660

•   Requirements: High school diploma or equivalent, moderate on-the-job training

•   Job Description: Operate machinery to install roof supporting bolts in underground mines.

•   Duties:

◦   Drilling bolt holes into roofs

◦   Performing safety checks on bolting equipment

◦   Extracting loose rock from bolting supports

23. Broadcast, Sound, and Video Technician

•   2024 Median Annual Salary: $56,600

•   Requirements: High school diploma or equivalent, moderate on-the-job training

•   Job Description: Operate and maintain electrical equipment used for television broadcasts, radio programs, live concerts, and films.

•   Duties:

◦   Setting up and operating equipment

◦   Monitoring and adjusting audio and video quality

◦   Repairing equipment and fixing recording issues

24. Heating, Air Conditioning, and Refrigeration Mechanic and Installer

•   2024 Median Annual Salary: $59,810

•   Requirements: Postsecondary nondegree award, lengthy on-the-job training

•   Job Description: Install and perform maintenance on heating, air conditioning, and refrigeration (HVACR) systems for buildings and private residences.

•   Duties:

◦   Installing, testing, and repairing HVACR systems

◦   Replacing and repairing defective parts

◦   Conducting overall system maintenance and performance improvements

25. Masonry Worker

•   2024 Median Annual Salary: $56,600

•   Requirements: High school diploma or equivalent, apprenticeship or on-the-job training

•   Job Description: Use bricks, concrete, and natural and manmade stones to build structures, walls, and walkways.

•   Duties:

◦   Designing blueprints and calculating materials needed

◦   Breaking and resizing materials into the required shape

◦   Aligning, constructing, and polishing finished structures

The Takeaway

Many trade jobs offer competitive pay and job security, without a significant upfront educational cost. Moreover, they provide an opportunity to make a difference by solving real-world problems. Choosing the right career path is an important step toward achieving your financial goals. It’s just as important to practice smart financial habits, such as setting spending limits, staying on top of your credit score, and establishing long-term goals.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

FAQ

What is a trade job?

A trade job does not require a college degree, but it may require other qualifications or on-the-job training.

What are the pros and cons of a trade job?

The benefits of a trade job may include a higher level of job security and not needing to have a college degree. However, trade jobs can be more physically demanding and dangerous than other professions.

What skilled trades are in demand?

According to the Bureau of Labor Statistics, wind turbine service technicians, solar photovoltaic installers, and physical therapist assistants are expected to experience the greatest job growth over the next ten years.

What are some of the best trades to learn that pay well?

Transportation managers, elevator installers, nuclear power reactor operators, and radiation therapists all earn a median salary above $80,000.

What are high-paying trade jobs that require no degree?

HVACR technicians, real estate agents, subway operators, and plumbers all pay above-average salaries and require no formal degree.

Photo credit: iStock/dima_sidelnikov

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SORL-Q126-002

Looking to start your own business? You’re not alone. Some 71% of Gen Z and millennials dream of being their own boss, according to a 2024 JustWorks/Harris Poll survey.

While launching your own business allows you plenty of professional freedom, the costs of setting up a business can be expensive. As you’re creating your business plan, one question you’ll likely face early on is, how much does it cost to start a business?

The average small business owner spends around $40,000 in their first full year. But that amount can vary significantly based on a number of factors, including the size, type, and location of the business.

Let’s take a closer look at the startup costs of different types of businesses and common ways to cover the expenses.

Typical Small Business Startup Costs

The adage is true: You have to spend money to make money. And unfortunately, some of the biggest business costs can come during the startup phase, when you are defining your business goals, finding a location, purchasing domain names, and generally investing in the infrastructure of your new company.

In order to make sure your business is on firm financial footing, you’ll need more than just a business checking account and a small business credit card. What’s important is to estimate your small business startup costs in advance so that you have a good understanding of what you’ll need and why. Here are some common ones to keep in mind:

Payroll

Many small businesses start out as a company of one. But if you’re planning on having employees, salary will likely be one of the biggest costs you’ll face. After all, offering an attractive pay and benefits package can help you recruit and retain top talent.

In addition to wages, you may also want to budget for other payroll costs, such as overtime, vacation pay, bonuses, commissions, and benefits.

Office Space

No matter what your business is, you’ll need somewhere to work. Are you leasing a storefront, or will you buy a membership to a coworking space or startup incubator? Even if you’re planning to work from home, you’ll want to consider whether your new business will increase your internet bills.

And don’t forget about the supplies you’ll need to do the work. Depending on your business, this could include computers, phones, chairs and desks, paper supplies, or filing cabinets.

Recommended: Best Cities to Start a Business in the U.S.

Inventory

How much it costs to start a company varies a lot, and one major factor in that variance is inventory. If you’re starting a business that sells products, you’ll need to have some inventory ready to go. Calculating stock as part of your startup costs helps ensure that you can buy your product in advance so that you’re ready to serve customers from day one.

Licenses, Permits, and Insurance

Some businesses, especially storefronts and restaurants, require more legal legwork than others.

For example, if you’re starting a native-plants landscaping business, will you need a permit? If you’re opening a new bar, will you have to get a liquor license? Licenses and permits vary by city and state, but most require an application fee.

Likewise, your new business may need one or more insurance policies to protect you in case of future litigation, so be sure to factor in the cost of monthly premiums.

And don’t forget about the costs associated with registering your business. Whether you plan to set up shop as a corporation, limited liability corporation or other business entity, you’ll often need to pay a nominal fee. The amount will depend on the state where you operate.

And if you plan on enlisting the help of a lawyer, accountant, or tax professional to get your business up and running, add those potential costs to your budget as well.

Advertising

Getting the word out about your new business is one of the most important things you can do to ensure that your business starts off strong. Whether you want to advertise on social media or rent a billboard, your startup costs should reflect money you plan to put toward taking out ads for your business.

Technology and Software

No matter what kind of business you have, technology is likely to play a key role. If you’re creating a product, you’ll probably need equipment to make it, but also software to track inventory, payment processing tools, and possibly workforce management and payroll programs. Internet startups are reliant on the e-commerce software they’re using to sell their products and services. And retail and restaurants generally need payment processing tools, as well as software to manage scheduling and payroll, among other things.

As you’re planning, consider what tech you’ll need to manage your operation. A realistic budget will include costs for setting up and maintaining your technology systems.

If there’s a major piece of tech or manufacturing equipment you need to run your business, you may be able to use equipment financing. This kind of funding can be easier for new companies to get since the equipment itself acts as collateral for the loan.

Professional Services

As mentioned earlier, from time to time, you may need specialized professional help for various tasks associated with your business. In many of these cases, you may want to hire someone with expertise on a project basis rather than as a full-time employee.

For example, you may want to use an accountant for bookkeeping and tax preparation; a lawyer when you need to initiate or approve a contract; or an IT expert to help with maintaining computer systems and cybersecurity. Depending on your company’s growth, you may even need to hire a human resources specialist to help you with hiring.

As you look at your business plan, think about what kinds of professional services you might need at various points in your company’s progress and add those costs to your budget.

Utilities and Operational Costs

Whether your business is in your home or in a dedicated building, you’ll need to consider the additional costs of supporting your office and operations. These may include utilities such as electricity, water and sewer charges, gas, heat, trash pickup, and internet access. If you’re working solo from home, you may not be spending much extra on these, but if you’re starting up a restaurant, for instance, these costs could be significant.

Unexpected Expenses and Emergency Funds

While you can’t expect the unexpected, you can prepare. Generally, it can be a good idea for small businesses to have between three and six months worth of their expenses set aside. That way, they’ll be able to cover costs if they hit a lull or experience equipment breakdowns. You may also find this fund helpful if, for instance, you need to replace a major piece of equipment, like a delivery truck.

Coming up with this reserve may be daunting, but you can build it up over time. Having a business line of credit may also help access funds you can draw on when you have an emergency.

Differences in Startup Costs Based on Industry

The actual cost of starting a small business can vary by business and industry. Here’s what you might be looking at if you want to start one of these common types of small businesses.

Online Business Startup Costs

As with brick-and-mortar stores, the cost of doing business online varies depending on the type of business you have. But in general, you’ll need to budget for things like:

•  Web hosting service and domain name

•  Web design and optimization

•  E-commerce software

•  Payment processing

•  Content creation and social media

If you’re selling products, you’ll need to invest in inventory and shipping. If you’re providing services, you may need to hire employees. All of these costs can be significant.

However, one benefit of starting your small business online is that you may be able to keep other costs low. For example, if you can conduct business from home, you may not need to rent office space, which can be a major savings. If you’re able to do the work without purchasing inventory or hiring employees, the startup costs can be even lower.

Average startup cost: $2,000 to $20,000 or more (depending on your business)

Storefront Startup Costs

If your business idea requires a physical space, your startup costs might range from $50,000 to $1 million, depending on how large a store you’re planning and what the stock will be. A medium-sized clothing store or boutique, for instance, might cost between $50,000 and $150,000.

Although $150,000 might seem like a daunting number, remember that many smaller, independently owned stores began with a much smaller budget.

Average medium-sized retail startup cost: $80,000-$150,000

Restaurant Startup Costs

If you’re planning to start earning money by selling your grandma’s famous bánh mì, you could be looking at startup costs of anywhere from $30,000 to $100,000 for a used food truck or cart to up to $2 million to buy a franchise restaurant. Typically, costs for small restaurants, including coffee shops, fall somewhere in the $275,000 to $425,000 range.

Average startup cost: $375,000

Recommended: 15 Types of Business Loans to Consider

How to Finance Your Startup Business

Many people who want to start a business are overwhelmed by the initial costs, but there are several ways to fund your passion project.

Friends and Family

Perhaps one of the most common ways to raise money for your small business is to ask friends and family to invest in you.

Friends and family loans can be ideal for financing a new small business because you can negotiate low-interest rates, set up flexible pay-back schedules, and avoid bank fees. Of course, borrowing money from friends and family can quickly become complicated by family drama, so make sure to agree on conditions before taking out a loan from a relative.

Outside Investors

When we’re discussing startup companies, we frequently hear about so-called “angel investors” sweeping in to fully fund new businesses. But there are other practical ways to fund your small business with outside investors.

Some small businesses use crowdfunding platforms to find investors who each contribute a small amount, and others use startup funding networks to find investors looking to fund their specific type of business.

Outside investors will want to know that your business is likely to succeed, so you’ll need a solid business plan to land outside funders.

Personal Savings and Investments

Most people end up covering some of their small business startup costs out of their own personal savings. Self-funding your new business venture can be the most convenient option. After all, if you’re your own funder, you don’t have to worry about family drama or picky investors. And putting your own money on the line can be an extra motivation to make sure that your business is set up to succeed.

Of course, it can seem overwhelming to save up enough money to fund your small business. Luckily, there are simple strategies to effectively manage your money.

Business Loans

If you’re looking to purchase equipment, buy inventory, or pay for other business expenses, a business loan might make sense for you.

There are various types of small business loans available, each with different rates and repayment terms.

Note that in some cases, lenders may be reluctant to give loans to a brand-new business because they want to see at least a year of revenue. You might need to put up some type of collateral to qualify for funding. Or it may sometimes be easier to qualify for startup business loans, which are designed specifically for younger companies.

When you’re considering a loan, a small business loan calculator can be useful to help you estimate what your monthly costs might be, as well as the full costs over the life of the loan.

You may be able to get a Small Business Administration (SBA) loan. SBA loans are partially backed by the government and often come with more advantageous terms than other loans, though they may require more paperwork upfront.

Using an SBA loan calculator can help you understand what the monthly costs of an SBA loan would be.

Recommended: Business Term Loans: Everything You Need to Know

Personal Loans

A personal loan can be used for just about any purpose, which can make it attractive for entrepreneurs who want to turn their passion project into a reality. These loans are usually unsecured, which means they’re not backed by collateral, such as a home, car, or bank account balance.

Personal loan amounts vary. However, some lenders offer personal loans for as much as $100,000. Most personal loans have shorter repayment terms, though the length of a loan can vary from a few months to several years.

While there’s a great deal of latitude in terms of how you use the funds, you might need to get your lender’s approval first if you intend on using the money directly for your business.

Recommended: How to Get a Small Business Loan in 6 Steps

The Takeaway

Going into business for yourself can be personally and professionally fulfilling. But it can also be expensive, especially if you’re starting from scratch. Estimating your startup costs early on can help ensure you’re on solid financial ground from the get-go. Labor, office space, and equipment are among the biggest expenses facing many entrepreneurs, but there are also smaller fees and charges you’ll likely need to consider.

Fortunately, small business owners have no shortage of options when it comes to covering startup costs. Dipping into personal savings and asking friends and family to invest are popular choices. Taking out a business loan or personal loan is another way to help finance a new business. The money can be used for a variety of purposes, and that flexibility can be especially useful when you’re just starting out.

If you’re seeking financing for your business, SoFi is here to support you. On SoFi’s marketplace, you can shop and compare financing options for your business in minutes.

FAQ

What are the average startup costs for a small business?

Startup costs can vary significantly based on factors like the company’s type, industry, and location, but on average, a typical small business owner spends around $40,000 in the first year.

Can I start a business with no money?

It is possible to start a business without money, though it depends on the kind of business you have in mind. Some service-based businesses, such as pet care or being a virtual personal assistant, often don’t require money to start, and you may also not need funds to start selling hand-crafted goods. Dropshipping could be another option.

What business has the lowest startup cost?

Some of the businesses with the lowest startup costs are service-based companies that rely on skills you already have. For example, tutoring or freelance editing businesses can be relatively inexpensive to set up.

How long does it take for a business to become profitable?

You may see online that startups on average take as long as three to five years to become profitable. Bear in mind, however, that the amount of time it takes a business to achieve profitability can vary enormously, and low-overhead companies may be able to reduce that time.

What are the hidden costs of starting a business?

Costs that entrepreneurs may forget to take into account when they’re starting up a business can include utilities, office supplies, WiFi, and printing and mail charges.

Photo credit: iStock/Wavebreakmedia

SoFi's marketplace is owned and operated by SoFi Lending Corp.
Advertising Disclosures: The preliminary options presented on this site are from lenders and providers that pay SoFi compensation for marketing their products and services. This affects whether a product or service is presented on this site. SoFi does not include all products and services in the market. All rates, terms, and conditions vary by provider. See SoFi Lending Corp. licensing information below.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

SOSMB-Q425-102

Starting a new business requires a good idea, customers who want your product or service, and money to get you off the ground. A personal loan to start a business can be one option for funding your business, especially if you don’t yet qualify for a small business loan.

Let’s walk through the difference between personal loans and business loans, the advantages and disadvantages of using a personal loan for business, and some alternative options to explore.

What Is a Personal Business Loan?

Personal loans for business are offered by some banks, credit unions, and online lenders. While many loans will specify what you can spend the money on — a mortgage must be used to buy a house, for example — the sum you receive from a personal loan can be used in several ways. That said, it’s important to confirm with your lender whether its personal loans can be used for business expenses, as some lenders do not allow this.

Your personal loan interest rate is based on various financial factors, including your financial history, income, and credit score. Generally, the higher a person’s credit score, the more likely they are to receive a personal loan with favorable terms and interest rates. Applicants with lower credit scores may have more difficulty qualifying for low interest rates. Lenders tend to see them as at greater risk of defaulting on their payments. To offset that risk, they might charge a higher interest rate.

Personal Business Loans vs Small Business Loans

Borrowing money to pay for business expenses is a decision that takes some consideration. There are different reasons you might want or need a business loan, many lenders to choose from, and different lending options to compare. Some things to think about if choosing between a personal loan for business or a small business loan include:

Recommended: Business Loan vs. Personal Loan: Which Is Right for You?

Benefits of a Personal Loan for Business

Taking out personal loans for business purposes can offer several advantages over other financing options.

Ease of Qualification

If your business is brand new, it can be tricky to get a startup business loan and may be easier to qualify for a personal loan. Banks offer personal business loans based on your personal income and credit score.

By contrast, you’ll be asked for a lot of information during the business loan application process, including your personal and business credit score, annual business revenue and monthly profits, and your length of time in business. The longer your business has existed, the more likely you are to have a record of revenue and profit — and the more likely you are to qualify.

Faster Funding

The length of time it takes to get approved for a personal loan and receive funding will vary by lender. Online lenders are typically faster than traditional banks and credit unions. You are likely to receive funding within seven business days.

By contrast, the process for a business loan can be much slower. For example, it can take 30 to 90 days to receive funding from a Small Business Administration (SBA) loan.

Potential for Low Interest Rates

If you have strong credit, personal loans can have lower annual percentage rates (APRs) than other financing products — such as credit cards. While it can be useful to have a business credit card, you’ll pay a relatively high rate if you carry a balance from month to month.

Small business credit cards may also have penalties and fees that personal loans may not have. These often include penalty APRs that go into effect if you make a late payment, over-limit fees if you spend more than your credit limit, annual fees, and more.

Flexibility and Versatility

Personal loans have few restrictions on how you’re allowed to use the money you borrow. You can use them for anything from debt consolidation to home repairs to a veterinary bill.

Disadvantages of a Personal Loan for Business

Despite the potential advantages of using a personal loan to help you start your business, there are drawbacks.

Some Lenders Don’t Allow Personal Loans for Business

Some lenders place restrictions on how personal loans can be used. It’s wise to be transparent about your intention to use the personal loan for business expenses and confirm if the lender permits it.

In some cases, it may not be. However, it’s far better to be honest about how you plan to use a loan than risk breaching the loan agreement. If you end up using a loan in a prohibited way, your lender could force you to immediately repay the full amount of the loan with interest.

Lower Loan Amount Limits

Personal loans generally offer borrowing limits as low as $1,000. They can go as high as $100,000 for larger personal loans. For small businesses, this might be plenty. But if you own a larger business that needs more money, you might benefit more from a loan specifically designed to meet business financial needs. Small business loans generally have lower interest than personal loans.

Shorter Repayment Terms

Lending periods for personal loans vary. Typically, you can find loans with term lengths of 12 months to five years. Compared to some small business loans, this is a relatively short period. Consider that for SBA loans, maximum terms can be as much as 25 years for real estate, 10 years for equipment, and 10 years for working capital or inventory.

Potential to Affect Personal Credit Score and Assets

If you take out a personal loan and can’t make monthly payments, you are putting your personal credit at risk. Missed payments may harm your credit score, which can make it more difficult for you to access funding in the future.

Recommended: What Is Considered a Bad Credit Score?

Fewer Tax Deduction Opportunities

Generally, the interest you pay on a personal loan is not tax deductible, unlike the interest paid on business loans. However, there’s an exception if you use the proceeds of a personal loan for business purposes.

However, this can get a bit tricky, as you may only deduct interest on the portion of the loan used for business expenses. So if you use any of that money to remodel the primary bathroom in your home, for example, interest on that portion can’t be deducted.

How to Get a Personal Loan for Business

Securing a personal loan for business purposes involves several key steps. The process looks like this:

1.    Assess your finances: Begin by looking at your personal credit score, income, and overall financial health. This will give you insight into the likelihood of qualifying for a personal loan and the interest rates you might get.

2.    Choose a lender: Look for banks, credit unions, and online lenders that offer personal loans suitable for business purposes. Make sure they allow you to use personal loan funds for business expenses. Compare interest rates, loan terms, and fees to find the best lender for your needs.

3.    Prepare your documents: Gather documents like proof of income, tax returns, identification, and any business-related information required for your application.

4.    Submit your application: Complete the loan application process with your chosen lender. Be honest about your intention to use the loan for business expenses. This transparency helps avoid potential issues in the future.

5.    Review loan terms: Once your application is approved, carefully review the loan terms, including the interest rate, repayment schedule, and any associated fees. If everything looks good to you, accept the loan terms to move forward with the funding process.

What to Consider Before Applying for a Personal Loan for Business

When analyzing the benefits and risks of this approach, consider these factors.

•   Your personal creditworthiness: Using a personal loan for business mixes your individual finances with the company’s risk. Think about the effects this move might have on your personal credit score and future loans.

•   Your business revenues: You’ll want to be sure your business will bring in enough money to cover your monthly personal loan payments. Run the numbers to be sure that paying the costs for this loan won’t force you to skimp on other needed business expenditures.

•   The loan’s true cost: Beyond the loan’s interest rate, lenders may charge fees for loan origination, late payments, loan processing, or account maintenance.

•   Timing: Funding for a personal loan may be processed faster than for a business loan. That’s an advantage over SBA loans, which can take up to three months to come through, possibly costing you a current opportunity.

•   Usage restrictions: Some personal loan agreements forbid using funds for business, so double check that your prospective lender permits it.

•   Repayment details: If you do get the green light, you may want to have on hand a solid business plan (showing revenue model and expenses, for example) to show how the loan will be repaid.

There are funding alternatives that could cost you less or give you added flexibility. Those are detailed in the next section.

Alternatives to Personal Business Loans

Personal loans might not be ideal for everyone and aren’t the only funding option for your small business. It may be worth considering small business loans or other types of business loans as alternatives.

Small Business Loans

Small business loans are offered through online lenders, banks, and credit unions. There are various options available, each designed for specific purposes. For example, a working capital loan is designed to help you finance the day-to-day operations of your business. Equipment financing can help you replace aging technology and buy new tools and machinery.

SBA loans are guaranteed by the Small Business Administration, whose aim is to help small businesses start and grow. If you aren’t able to make your payments, the SBA will step in and cover up to 85% of the default loss. By reducing risk in this way, the organization helps businesses get easier access to capital.

Shopping around for the best small business loan rates is a good way to compare lenders and find the one that works best for your unique financial needs.

Business Lines of Credit

A business line of credit is revolving credit, similar to a credit card. You have a set credit limit and only pay interest on the amount you’re currently borrowing, making it a more economical option than a term loan for some business owners. As you repay the funds, they are available to borrow again.

Another advantage to a line of credit over a term loan is the ability to use a check to pay vendors who do not accept credit cards.

Business Credit Cards

Business credit cards can be useful for separating personal and business expenses. They also usually have higher credit limits than personal credit cards, which gives you more flexibility to make larger business purchases. Plus, they may offer rewards, perks, and bonuses. It’s important to keep in mind, however, that credit cards tend to have higher interest rates than other types of business financing.

Recommended: Can You Get a Business Credit Card Before You Open Your Business?

Merchant Cash Advance

A merchant cash advance (MCA) is an alternative form of financing for businesses that get revenue through credit card sales. With an MCA, a business can borrow a lump sum of money and repay the lender with a percentage of future credit card transactions. The repayment amount is larger than the advance, since the lender charges a fee. In some cases, MCA fees can significantly exceed interest rates on other types of business loans.

The Takeaway

Can you use a personal loan to start a business? Perhaps. Taking out a personal loan may be one way to fund your small business needs. However, some lenders do not allow a personal loan to be used for business purposes. It’s a good idea to explore alternatives, such as a small business loan or line of credit.

If you’re seeking financing for your business, SoFi is here to support you. On SoFi’s marketplace, you can shop and compare financing options for your business in minutes.

FAQ

Can a personal loan be used for business?

Yes, you can use personal loans for business if the lender allows it. It’s important to check with the lender to ensure there are no restrictions on using the loan for business expenses.

Can I write off a personal loan if used for my business?

You can typically write off the interest on a personal loan used for business purposes, but only the portion directly related to business expenses. Personal loan principal repayments are not tax-deductible.

Does the SBA offer personal loans?

No, the Small Business Administration (SBA) does not offer personal loans. The SBA provides various loan programs designed specifically to support small businesses, such as SBA 7(a) loans and SBA 504 loans.

What are the risks of using a personal loan for business purposes?

Funding your business with a personal loan can present a number of risks. The overall risk is that such a loan puts your individual creditworthiness on the line, as personal loans always require a personal guarantee. This means:

•   Any missed payments could hurt your individual credit history.

•   Even if you pay on time, you’d miss the opportunity to build your business credit score.

•   Defaulting on a personal loan could cause lenders to take legal action, meaning you’d probably have to pay for a lawyer to represent you.

•   Negative consequences from a lawsuit could include a lien on your home or garnishment of your wages.

Can startups qualify for a personal loan for business?

Generally, the answer is no. Many lenders disallow the business use of a personal loan, for one thing. For another, lenders ordinarily approve or deny loans based on the borrower’s ability to manage repayments — and given the high rate of startup failure (roughly 20% in the first year), both personal and business loans to new entrepreneurs are often seen as too risky.

Photo credit: iStock/fizkes

SoFi's marketplace is owned and operated by SoFi Lending Corp.
Advertising Disclosures: The preliminary options presented on this site are from lenders and providers that pay SoFi compensation for marketing their products and services. This affects whether a product or service is presented on this site. SoFi does not include all products and services in the market. All rates, terms, and conditions vary by provider. See SoFi Lending Corp. licensing information below.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

SOSMB-Q425-023