When you are a new entrant on the business horizon, be ready to face a number of challenges. Competition is one of the challenges but the biggest challenge of all is finding a business lender.
New businesses are in their nascent stage and do not have a wide range of clients and revenues to show to the lenders. Many startups fail to survive beyond a year or two. In such a scenario lenders are too scared to part with their funds to the new businesses. One can still convince the lenders if the business owner has collateral to support the loan. In most of the cases the business owners put the business offices as collaterals.
Thus it takes a lot of effort and time finding a business lender who agrees to fund your business. Let us look at the different options available for the funding of small start up businesses.
The federal government has run special programs to fund the small businesses in the start up phase and it is referred to as SBA loans. Under these loans the business owner should be able to fund 30% of the loan requirements while the rest of the 70% can be funded under the SBA plan. One has to present a strong business plan to the creditors in order to convince them for the loan approval.
Credit card is yet another option which can be used to build the credit in the name of the company. Credit cards offer an excellent means of building credit ranking. One needs to take a credit card in the name of the company by providing the Company name and the Tax ID number to the concerned bank. This card can be a pre-paid card too. All one needs to do is to make all the company payments using the credit card. This will help to slowly build the credit history and ranking of the company. Applying a loan on the basis of the same will make it a lot easier to get the approval.
Credit unions are yet another source of business funding. However, these require collaterals in most of the cases. While using collaterals for the loans one has to be very careful as non-payments may result in loss of the collaterals to the creditors.
One needs to be careful in such arrangements. It is better to take small loans for the first time using the collateral but try and repay them as soon as possible. Early repayment will build business credit using the same one can get other loans easily even without the collaterals.
Yet another source for the business loans is to look out for a business lender online.
These are the best source of the loans as they are quick and require lesser documentation in case of small loan amounts. However, in case of the loans involving larger amounts one requires to complete certain documentation but still this is faster as compared to the others.
A business lender online looks for certain minimum criteria, to approve the loans applied for. However, with the increase in the usage of the internet the lenders are on a spree to upgrade the processes to enable faster approval.The team at easybusinessloan.net takes pride in sharing the complete information related to business loans. Visit us to have a complete understanding of the business loans, SBA Loans, equipment financing and leasing, merchant cash advance, and franchisee loan."/>