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Finding the best loan option for your business should be easy. With us, you can get approved within hours so you can get back to running your business.
The best loan option is one based on your budget, goals, and unique needs. We help you compare all your loan options in one place, from the industry’s top lenders.
Once approved, your funds are transferred directly into your business’s bank account within 24 hours. Growing your business is just that simple.
Any finance or capital gathered to help set up a small business where the owner has little to no business history is considered a startup business loan. Even though these new business owners do not meet the requirements to be granted most small business loans, they can take benefit from a number of new financing avenues and loans such as a business line of credit, crowdfunding, and business grants.
3 months—5 years
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When your business needs additional capital, securing a business startup loan can be the best decision you make for your company.
Each business, no matter their size, experiences periods where working capital is tight. A small business loan can help shorten these stretches, without interrupting operations.
Securing a small business loan allows you to maintain control of your company. You can use your loan however you like and can keep any profits or gains your business generates, all without seeking permission from your lender.
In order to grow, you have to continually invest in your business. A small business loan can enable you to plan for the future without using any working capital from your day-to-day needs.
Trying to capitalize on a new market? With a small business loan, you can secure the location you need to widen your business’s reach. The more locations you have, the greater your chance to grow.
There are a number of ways to finance a new or young business, and each has slightly different qualification criteria. In this write-up, we cover the major startup business loan options including borrowing from friends and family, crowdfunding, business credit cards, business lines of credit, small business grants and SBA microloans.
Usually, businesses that have existed for less than six months do not have traditional business loans available to them. Hence it makes perfect sense for these businesses to opt for a startup business loan. Businesses older than six months, especially those approaching the year mark, should have more traditional business loan options available to them.
While the business is in its nascent stage, your credit score as the business owner is more important than the business credit score. Hence you should always keep your credit score as high as possible. A high personal credit score increases the chances of securing an SBA microloan, a personal loan for your business or even a business credit card. If you do not have a good credit score, you must take some corrective steps to improve it before applying for a loan.
The business model, products, business details or plans factor more when you opt to go for crowdfunding, friends and family, private investor or grants. To secure finance from these sources, it is imperative to present a solid business plan. Crowdfunding websites are more responsive to businesses with a unique product and a sustainable business plan. Your customer base, area of operation and past business history (if any) also play a pivotal role in getting finance from these alternate sources.
Depending on the type of loan, the application process varies. Following are some of the application processes you might encounter based on your financing choices:
SBA Microloans: Securing an SBA Microloan can take up to a few weeks. This type of loan requires a lot of documentation. It is absolutely mandatory to have your business registration and financials up to that point at the ready along with all other documentation that might be needed.
Business Credit Cards: These are easier to gain with much less documentation requirements. Usually, your social security number or federal tax id should be sufficient.
Small Business Grants: The application process for businesses varies widely depending on the grant you are opting for.
Other options: Loan from your family or friends and crowdfunding do not require documentation in a traditional sense. But detailed descriptions of your business plan, products, model and other pertinent information are handy.
Starting a new business can be a taxing venture, especially if you need to get a loan to get your business off ground. It is always challenging for new and small businesses as it is difficult to gain trust from investors with no history or credibility to show for. With a number of products available from many lenders for both new and existing businesses, it can be tough to decide on the correct product. And then comes the process of application. As we have mentioned earlier in this piece, there are still a number of options to take advantage of but many of them come with their own caveats.
Borrowing from Friends and Family:
There is no shame in getting a loan from the people you know and love for your business venture. There are many successful businesses in operation today that started with help from friends and relatives in someone’s garage.
However, there is a risk associated with this type of fundraising. You are mixing business, money and your relationships. If one fails, the other might fail as well. Hence it is important to only take help from the people who you trust completely. Before getting them into the deal, ensure that you explain the business and the associated risks well in advance. Try to get everything in writing including their role in the business, the timeframe to repay and what happens if your plan does not work out. Handling these matters professionally can save a lot of grief later on.
Applying for Small Business Grants:
Small business grants are amazing if you can secure one. But government or charitable trusts usually have a very thorough and difficult application process. There is also a lot of competition since a large number of businesses from across the country would be vying for that grant money. Add to all of that the fact that these grants are more often released to non-profits, businesses working on certain products, with certain communities, and in certain areas. But if you believe you tick all the boxes, please go for it as a grant is essentially free money to develop your small and young business.
In recent years, crowdfunding platforms such as Kickstarter have gained a lot in popularity in terms of their ability to help new businesses gain funding. On these platforms, you can set up your business details and set a certain amount of money as a “goal” to achieve. If the community likes your business idea or products, they can contribute towards that goal. Unlike other loan options, you do not have to pay them back or pay interest. The money contributed is more a gift or an act of generosity towards your efforts.
However, crowdfunding usually works the best for product-based businesses, especially if you have a unique and useful product that you want to manufacture. You might need a detailed description of the product you plan to manufacture, your plans on production, distribution model, etc. Sometimes showcasing one or two finished pieces can go a long way in securing the funds.
Fill the online application form provided and voilà! We will get in touch with you immediately and provide you with a number of options customized for your business, depending on the information you’ll have given us. Decide on what best suits your business and remember that you are not obliged to proceed further, and no charges apply whatsoever.