Your business will need to belong to certain fields in order to qualify for government finance. Moreover, you’ll need to present a business plan with market analysis and other provisions. Some government agencies offer loans but also grants which you won’t have to repay. You can contact the different agencies for more information or search the net to find out about the different programs.
Starting Business Loans
If you don’t fall into the categories required to obtain government funds, you will need to resort to private funding. This also has its tricks, there are different kinds of business loans and not all of them will provide a solution to your funding needs. Moreover, there are certain business’ loans not meant for starting businesses and thus, applying for such loans will only lower your credit score since you’ll get declined.
Business loans are meant for running businesses. You have to own a business with at least 3 years of credit history in order to get approved. The only kind of loans that is specially tailored for those willing to start their own business is a starting business loan. These loans are customized for certain businesses that operate in specific fields or meet certain requirements in terms of collateral. If your business lacks those requirements you’ll need to request a personal loan.
Customized Loans & Personal Loans
Starting Business loans are loans customized for those who want to start a new business. In order to get these loans, the applicant has to present a business program, a market study and plenty of documentation backing up the project. There are certain fields that have more chances of approval due to the higher profit obtained.
But getting approved for starting business loans is rather complicated. Those with small projects, less ambitious ones, should consider applying for a personal loan and using the money for starting their own business. Later on, when the business is strong they’ll be able to request a business loan for running businesses that will provide all the finance needed to make a business grow to new heights.
Interest Rate & Securities
With the exception of certain business loans that are subsidized by government agencies and non profit organizations, the interest rate charged tends to be high compared with secured personal loans. However, it is possible to secure a business loan with the business’ equity or with a particular asset, thus reducing the risk and consequently the interest rate.
When searching for a lender, one of the best options is to start on the internet. You can perform a search for business loans and contact the different lenders and request loan quotes from them. This way, you’ll know in what ground you’re stepping and what you can expect when you finally decide to apply for a business loan.