It’s not easy for new businesses to get all the funding they need. Even if you have excellent personal credit, you may have trouble getting all the business money you need. The good news is that there are a variety of options available these days, including online banking and crowdfunding. Just take the time to research all of the new small business loans and determine which ones you should try looking for.
It might also be worth considering microloans. There are SBA microloans, which are typically available for up to $50,000, as well as nonprofits that offer microloan options for up to $35,000.
Before applying for any type of loan, there are a few factors to consider about your own finances. In addition to your own credit report, you need proof that you’ll be able to repay the loan. Be sure to communicate any experience and knowledge you have that will directly apply to the business you are trying to establish.
You’ve probably noticed that new small business loans don’t come with the lowest interest rates. If you’ve been in business for less than two years, you’ll have a harder time qualifying for a large loan with a low interest rate. If your credit isn’t the best, you may need to put up some collateral and get a secured loan.
New Small Business Equipment Loans
If your primary need is equipment, look into an equipment finance loan. This type of loan is specifically designed to help organizations pay for the equipment and machinery they need to get started. They are similar in structure to a traditional loan, although repayment terms may be for a longer period of time. Please note that income can ONLY be used to purchase the machinery/equipment you need. The downside of an equipment loan, obviously, is that if you don’t pay, the lender is entitled to sixteen of that equipment.
While some entrepreneurs actually take out a personal loan to finance their startup, this might not be the best idea considering that if the business fails, you and you alone will be responsible for it. Not only will the business fail, but your own personal credit will also be destroyed.
Your best bet is to shop around for new small business loans with online lenders like US Business Funding. There are many options available such as vendor programs, equipment leasing and financing, working capital, etc. The approval rate is very high and you can start right away.