Need Funds to Start Your Business? Get a Startup Loan
Starting a business requires a hefty amount of sum for funding. There are many ways to acquire this money and one of them is getting a startup loan. But before anything else, the first thing you need to do is find out what expenses you need to start your business. This includes office space, office furnishings, operational facilities, and production equipment, as well as legal costs.
When taking out a loan, also consider at least six months of your company’s operational costs such as insurance, salary, advertisement, office rent, and supplies. Do not forget to include the repayment of your company loans in your costs.
You may use your possessions as collateral for your loan since they are considered assets. Meanwhile, expenses are costs that you incur but do not retain.
What You Need To Applying for a Startup Loan?
Like any other loan, lenders should know if you are a responsible borrower where they will have to run a credit check. Good personal credit is at 680 and higher. Startup company loans usually have an APR of between 7.9% and 19.9%, a maximum loan amount of $750,000, and payback durations that can last for months up to years. By pledging your business assets as collateral, you can have access to more affordable loan rates. Signing up for Equipment Financing Loan is another alternative to which your assets can be used as collateral while making loan payments at the same time.
When applying for a loan, a few requirements are needed to be submitted. You need to present a business plan and disclose your assets, and an application form provided by the lender has to be filled out. If you have the latest ITRs (income tax return) of your business, you must submit them; if not, your personal income tax records for the past three years will do. Additionally, business certificates, documents, and financial statements of your company are also required by most lenders.
Where to get funds for a startup?
Best-rated lenders are the number one go-to for aspiring business owners. But aside from this, there are several more alternatives for launching your new firm. In contrast to private and/or government loans, getting accepted on a credit card application is a much quicker way to get money. However, credit rating plays a big role in this such that having bad credit results in getting a higher APR.
If you’re looking for good interest rates, you may acquire SBA loans from the government and microloans. However, these loans are very picky on borrowers and are quite challenging to qualify for. Moreover, they require payment of small sums.
On the other hand, looking for investors and receiving a grant for venture capital could save you a lot of repayment money. Crowdfunding also works or if you have family or friends that are kind enough to lend you money, it will be an easy start for your business and no interest will be paid. The drawback of this is that you face the danger of destroying your relationship with them if the venture fails.
Another option is applying for a personal loan to use for their startup which is not recommended for business owners as it greatly raises their own financial risk.
In the meantime, here are two financing companies that can lend you funds if you can’t find options that are fit for your startup needs.
OnDeck
If you’re looking for flexible loans, OnDeck is a good choice with its business loans and lines of credit plans. The minimum credit score an applicant should have is 625. You don’t have to wait long for your application approval as decisions could be made and money can be obtained within 24 hours only. The company also values its customers and this can be seen in its customer support.
Rapid Finance
Rapid Finance focuses its services on companies of any size and of several markets and industries. The financial services company has funded more than $2 billion on startup businesses in the span of almost 20 years of providing capital services. Rapid Finance is a good alternative to local banks and other lending companies with only requiring a minimum credit score of 550 which is relatively low compared to other creditors.
Conclusion
Any business ideas could just bounce out of your head and nothing compares to the excitement of imagining the success that your business could get in the future. But starting a new venture requires time, effort, and of course sizable money. Taking out a startup loan is one way of funding your business and you can now cross out “start a business” off your bucket list.
