8 OPTIONS FOR SMALL BUSINESS STARTUP LOAN
It is one thing to have a business idea and it is another thing to have the appropriate business finance for it. Money and every other legal tender is what drives the business world to a large extent. Not having the capital to start discourages many business ideas.
Well, no need for new entrepreneurs to fret as there are now several loan options to pick from. Below are 8 options for small business startup loan.
Personal assets and saving
The most common type of funding for small businesses since time immemorial is personal savings. In this means you put your personal savings and assets are put into business use.
The risks involved in using personal savings are bore by the small business owner alone. Using personal savings and assets in business gives you sole control over the business.
Simply put, microloans are loans of smaller dollar amounts typically used to help small businesses grow. Microloans allows individuals with low or no credit score to be able to startup businesses.
Although most microloan programs usually have restrictions as to what you should and shouldn’t spend the money on, they are still very reliable.
Conventionally, crowd funding works by raising funds from a large number of willing people to support your business. With crowd funding, there is no limits to what can be raised as it is done out of the goodness of people’s heart. Usually, individuals that support small business through crowd funding are entitled to a reward when the business start breeding cash.
Small business administration (SBA) loan
The United States government set aside SBA loans to assist small business owners. The good thing about SBA loans is that they’re long term loans. As a small business owner, you should be able to acquire SBA loans as long as you meet the required eligible standards. Read more!
Startup loans for equipment
This kind of loans are called equipment loans or equipment financing. As the name implies, the loans are acquired solely for equipment purchase. The equipment bought is used as the collateral for the loan. So much so that in a way it becomes a secured loan. Equipment loans are available for both long term and short term.
I would personally advice that this be your last resort if any other loan isn’t available. Why? Because line of credit is a bit risky.
Line of credit can be gotten from the bank or other finance companies. It’s better you get it from the bank because of their amazing interest rates.
This loan option is beginning to gain grounds in the business world. Online invoice financing involves the use of preexisting business invoice to borrow money. The lender borrows the business owner money based on services the business owner already provided.
Traditional lenders are a good way to acquire business finance. The downside is that most require collateral and their interest rate is not as alluring as the banks.
Clearly, as seen above there are various ways your small business can get funds despite unavailability of personal capital. All the methods listed are viable ways with which your small business can be funded. Business finance should be easy to attain after going through this article. You can know more at: https://www.catwalkbars.com/business-loan-advantages-and-disadvantages/