Start Up Business Loans
Start up business loans are often spoke about but rarely found but don’t worry it’s nothing new. Finding start up business loans are some of the most difficult to track down. Sure they are out there but it doesn’t mean they are great deals or even fair deals in most cases.
When it comes to start up funding there are two groups basically, one of which will find it much easier to get the funding or in other words get approved for a loan and then there is everyone else.
To get financed on your start up you’ll have the best chances if you’re someone who has been employed at the same job for 20 years, have had a hefty salary all those years, has never been late on any bill in history and has a nearly perfect credit score. So if you’re in that group then just go and apply practically anywhere you want but for the other 99 percent of us it’s a bit more difficult.
If we were giving the advice we’d say to skip a start up loan all together and fund it yourself until the point you’re turning a profit for a couple of years and then your opportunities will open up much more so, in the eyes of the banks and even venture capitalists. But if you don’t want to do that or don’t see it being doable for your situation or maybe the business concept just requires too much of an investment to start out on your own then going for a small business loan may be what you need to move forward. However please don’t expect it to go too smoothly and we aren’t saying that to discourage or scare anyone, it’s just that start up lending is seen to be the riskiest investment a bank can make considering the rate of failures for most new start ups.
Is it Hard to Get Start Up Business Loans?
So when you go into to apply you’ll want to make sure you have a sound business plan, your strategy laid out and some professionally done forecasts of what you anticipate earning. Basically you’ll be in the position to sell your idea to someone who most likely doesn’t have the same passion as you do; in other words it’s an uphill battle. Banks number one objective is to make money and when it comes to loaning money that’s when they are the most conservative. Don’t go in like a deer in the headlights! Put together everything you can so that you can convince them that not only is your idea profitable but you’ll have the ability to pay them right from the get go. The bottom line is if they don’t think you can pay them every month then they aren’t going to approve the loan. Truly that’s what they care about the most.
The last forewarning about the world of start up business loans is that in most cases they are going to want everything including the kitchen sink; literally. You’ll find that lenders and even loans through the Small Business Administration (SBA) will require collateral for them to fund the loan. In real terms that means they will want your house, your car and anything else they can make a claim on if you default on their loan. That’s their way of protecting their investment; if you can’t pay then they will take your belongings and sell them off to put it bluntly. We know it’s certainly not the best thing in the world to worry about when starting up your company but we’d rather put it out there in advance because somehow they always tend to bring that up towards the end of the process like a final surprise right before the big finish.