It’s tough being the new guy on the block – particularly when your block is the business world, and you’re an entrepreneur trying to get your new business off the ground.
In order to get your business going and to keep it going, you will need a stable source of financing. This is one of the keys to a successful business. But too many businesses start out with a limited budget, and chances are, they won’t survive. But there are options.
Considered a traditional type of loan, a bank startup loan can be a lengthy and difficult process when compared to your other options. To apply for this type of loan, you’ll need a well-crafted business plan that not only clearly states what type of business you have, but also outlines the marketing plan and mission statement as well.
You will also need to have your license and registration “ducks” in a row – in other words, you’ll need to be thoroughly prepared. For those new to the business world, this might be a challenge.
Probably most important will be your credit report. Any bank or credit union will check your credit report, to determine if you can be trusted with a loan. Your credit score will determine not only how much money you can borrow, but the terms of the loan as well.
If you need money much quicker, then you may want to consider searching for a loan online. There you’ll find hundreds of lenders who offer both secured (loans that require collateral) and unsecured (loans that require no collateral) loans. The search online can be daunting, since there are so many lenders, but once you’ve narrowed down your choices, it pays to thoroughly review the terms and conditions of the loan offers. You’ll want to ask questions and make sure you know what you’re getting into.
Be sure to check the lenders out as well. Make sure you’re dealing with a legitimate and trusted lender.
Before you even get started, be sure you know how much money you need to borrow, keeping in mind that you should only borrow what you can afford to repay. And don’t forget to factor in interest.
The government also offers assistance for those who have been denied for startup loans through the Small Business Administration. Startup loans like the Microloan and the 7(a) Guaranty program are available through the SBA.