It’s not the easiest thing in the world for a new business to get the money it needs to get started. New business loans can be difficult to obtain unless you have excellent credit and a good plan. If you can get approved, you’ll get the income you need for working capital, equipment, supplies, machinery, inventory, advertising, or maybe even for real estate construction or commercial building rentals.
One thing that many lenders expect you to do is determine your personal wealth. How much of that will you be able to bring to the table? Lenders tend to require that you contribute between 20% and 40% of the total amount of the loan you are applying for.
In the 21st century, there are many more options available for business start-ups than the traditional loan from a bank. However, before applying for any type of financing, you must demonstrate that your business qualifies as a small business. Small businesses are generally measured by factors such as number of employees, number of years (less than 2) in operation, number of employees, revenue generated, types of assets and their value, revenue, etc. Most traditional lenders require you to put up collateral and a guarantee that you will pay.
Your credit score and new business loans
If your personal credit score is very high, you may want to get a credit card to use for your business. The line of credit may not be enough to cover everything you need, but it’s a good start. There is no rule that says you must get all your funds from one source. There are a variety of microloans you may qualify for, such as those offered by the SBA and other non-profit organizations. These types of new business loans can be used to purchase inventory/supplies, furniture, working capital, etc.
When it comes to alternative start-up financing options, like grants and crowdfunding, you’ll want to focus more on our business model than your credit score. These types of financing are worth considering if you have bad credit. However, to impress crowdfunders, grantmaking organizations, angel investors, etc., you’ll really need to come up with a great message and marketing campaign.
Once you get all your documentation, files, financial records, financial plan, etc. together, you can start looking for new business loans at US Business Funding. This organization has 95% approval rates and offers flexible payment terms and options.