Starting a small business is a great experience. Many new small business owners will use their life’s savings to start on the road of entrepreneurship. This is not necessary there are small business start-up loans available to all types of businesses, many that are backed up by the SBA can get large amounts without having to put up any assets. Finding the right start-up loan for your small business can take some time, it is recommended to visit several lending institutions to ensure that your business is getting the best possible terms and conditions to the loan.
Do you need a start-up loan for your small business?
A small business start-up loan is provided by banks and other lending institutions as a loan to new businesses looking for start-up capital. Many lenders offer small business start-up loans to small businesses as a form of security that does not require an asset. However those who do not receive SBA loans are often required to use personal or business assets to secure their loan, their business has not been active long enough to generate enough income for the lenders to provide unsecured loans.
Tips for small businesses looking for start-up loans
- Be aware of both your personal and business credit history, requesting a copy of your credit report can give you the opportunity to review and have any incorrect marks removed.
- Look into SBA start-up loans for easier approval
- Have assets, personal or business, available to secure the loan
- Shop around, visit several lenders to ensure you are getting the best possible loan
- Negotiate the terms and conditions to the loan
Small business start-up loans terms and conditions
A major condition of a small business start-up loan is that even if your business fails you are still responsible for repaying the loan. The interest rate and loan term often vary by lender and borrowing business, these are often up for negotiation. With loans secured by assets if the borrowing business fails to repay the loan the assets can be seized and then sold in auction to cover the cost of the loan.
How to get a small business start-up loan
- Find a lender that offers small business start-up loans
- Make sure your business meets the lender’s requirements
- Submit an application
- Negotiate the terms and conditions of the loan
- Sign that contract and set up a repayment schedule