Start Up Business Loans – Small Business Startup Loans

Start Up Business Loans – Small Business Startup Loans

The Bad News About Securing A Start Up Business Loan

It’s important to note that start up business loans are very similar to personal loans. Banks don’t want to lose money and these types of loans in today’s economic environment come with a fairly hefty risk factor for the bank. If you or your business are deemed to be too great of a risk, you’ll definitely have your work cut out for you securing a start up business loan. A large majority of startups fail within the first few years so you need to be aware that you are viewed as a much greater risk if you want a start up business loan. Ideally, you energies are best spent building credit for your business so those loans will be there when you need them. First, you’re going to need a concise business plan.

What Will It Take?

Occasionally, you might be asked for equity in your business to secure this funding. You may even face the demand of using some or all of your personal assets as collateral. The best and most solid, tangible form of collateral is real estate. If you are a homeowner, you will very likely be required to utilize that property it to secure a loan. You cannot utilize real estate that is not located outside of the United States. Realistically, if you owned a beach house in the Bahamas, you likely would be worried about a start up business loan any way. Other assets — business assets — like vehicles, equipment and inventory can also be considered collateral and can be used to secure the loan. Even if you have no significant collateral, and depending on the nature of your start up, there are still some credit based loans under ,000 that do not require collateral. If you are looking for a larger loan and are a start up business, you will in all likelihood require some collateral of some kind. Existing businesses with positive cash flow may be eligible for a loan without collateral or co-signer. Be sure you analyze all of the options and details carefully before you sign on the dotted line.

Time To Take A Good Hard Look At Things

Have you taken a good hard look at what your start up is going to require? Generally speaking, you will need to come up with about 30% of the total cost to start your business. That means 30% of the total cost to start the business. If you require 0,000 to get your start up off of the ground, you will put up ,000 of your own money and go for additional funding, via traditional or non-traditional loan, of ,000. Your initial capital can come from your own savings, home equity or funds gifted to you by a friend or family member that you don’t have to repay. You should not be financing your initial capital through other sources. At least half of your capital should come from your own sources. The rest can be gifted or carried on a note that is on full stand by. You can also borrow against any retirement accounts, which represent personal equity. If you have credit challenges, you will want to get current on any outstanding debt that you may have and that any black marks on your credit report are at least a couple of years old. Be prepared to explain what happened that these events occurred. If you have ever filed bankruptcy, the filing must be four to six years old and there must not be any late payments or collection reports since the bankruptcy. You will need to prove that you are financially responsible.

Our last non-traditional small business start up loan source is known as peer-to-peer lending. Peer-to-peer lending brings together investors with those seeking start up funding. Prosper is the nation’s leading innovator in this manner of lending, making it an attractive alternative to the traditional loan process. Prosper works like this: Go to and choose your loan amount, how you will be applying the funding and make a listing, detailing your plan. Investors frequenting the listings review and invest in those ideas, situations and start ups that meet their particular parameters. You get accepted, your start up business loan is processed and you make a regular monthly payment. Your investor has a portion of those payments deposited into their Prosper account. It is literally a win/win for everyone involved. Check out Prosper today!

Start Up Business Loans