Finding start up financing is one of the biggest challenges in starting your own business. A great idea doesn’t always guarantee obtaining financing. Even having a lot of experience in the industry doesn’t guarantee success.
Factors For Getting Approved For A New Business Loan
There are many factors that go into getting an approval for your new business.
- Your credit rating will also come into play during this process, so you need to make sure that you are someone who has not had a lot of credit problems in the past.
- Your current financial situation
- Do you have or need collataral
- What is your experience level
As long as you have a viable idea with a solid credit score, you should be able to get a loan for your new business from a variety of different sources. In this article we will just look at the top 3 places most new small business owners look for loans.
Can Small Business Loans Still Be Obtained From The Bank?
The most obvious place that people know that they can find start up business loans is the bank. While this may have been the place to go in the past, the times are changing and banks are not what they used to be when it comes to new business loans. Loan approval has become a lot harder to obtain. Especially if you have credit problems. While obtaining a loan from the bank can be ideal. The fact is, if you don’t have great credit or have no collateral, your chances of approval are slim. A lot of small business apply at their local bank, and if you get declined. Find out why. A lot of times its simply they don’t work with new businesses. The next time you apply, make sure you verify they finance start up business and find out their requirements. If you meet them apply. If you don’t, then don’t ! You may have a great business idea, but they won’t take that into consideration during the under writing process!
Friends and Family
One of the best places, and also one of the worst places to obtain financing is to go to friends and family. Family can be very supporting and a quick source of financing. But then you have to remember how money can ruin relationships. If you accept money from your friends and family, write it up as a contract, with clear repayment terms and ownership percentages (if you are offering any). Make it clear to them that while you appreciate the fact that they believed in your business enough to invest, you are running the show! Make sure everyone knows what is expected of them.
The final place to look for your start up business loans is the Internet. It is easy to get your idea out to the masses if you know how to use various social networks and social media marketing to your advantage. Crowd funding sites have become very popular, and of course you have us, here at Startupbusinessloans.com ready, willing and able to help you!
Irish Taylor is a business loan consultant with Startup Business Loans and has been providing consumers and business owners with startup business financing since 1992. For years she has helped people with credit and loan problems especially pertaining to business start up, SBA loans and Unsecured loans.