Guid To Small Business Start Up Loans

Business is the leading industry and has been there for many years.  It is one of the main options of those people who would like to stop their jobs and build their own businesses and for those who would like to retire and just manage a business or company instead.  Having a business is also a good option if you want to gain more profit and to have a more productive income as compared to being employed.  You will now become the employer and not the employee and that can certainly boost the self-esteem of an individual.

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However, there are some people who would like to put up their small business but they don’t have a capital so they find some options for start up loans.  There are now business start-up loans that can be easily applied by individuals who would like to establish their small business.  They need not to worry about their capital anymore because they can now achieve their dreams by simple submitting their applications.  Listed below is some of the start up loans that small business industries can avail.

1. Putting Some Money For Your Start Up By Making Use Of Your Account For Retirement

Buying stocks to have a retirement fund is the most common thing that employees do soon as they land into their job. This is certainly very practical since you don’t have any idea about the things that might happen in the near future. Also, you can have your job forever, so it is then important to always have a back-up plan, and that is to have a retirement plan.  You may withdraw your retirement fund at any time that you feel like you have invested and gained a lot of money that is quite enough to be able to put up a business.

If you have a huge amount of money for your capital because of your retirement fund then this amount would be more than enough to have your business.

2. Borrow Some Money From Your Friends And Family

Before seeking another option, you can try to ask some help from your family and friends first before going to banks or having some loans for your small business. Your family and friends are the best source for your start up loan for you business. You can ask to borrow some money from them and in return, you will loan this money to them or you can sell the share of your small business to them.  Though you can choose from this two options, it is sometimes more advisable to just loan the money that you will borrow rather than selling them some of the shares of your business to gain more profit.

In order to avoid miscommunications with the shares of stocks from the business between families and friends, it is then more advisable to just loan the money that you have borrowed from them.

3. Avail A Microloan From Non-Profit Lender

There are companies like Accion that are always there freely to give microloans for start-ups of business. Every microloan companies differ with the amount of money that you can borrow. There are some that you can borrow at least $30,000 from them.  There are also some companies that will provide some money to small business that will be established on their own homes.  While there are also some companies that will only provide some loans once they have assessed that the small business can gain a good cash flow in order to pay for loans.

Hence, there are some cases that the companies will have to ask for a copy of your bank account or other source of income to make sure that you can pay for the start up loan that they will provide.  In this case, you may also provide the source of income of your spouse, parents or family in order to show that you can really pay the amount of money that they will provide for you.

4. Gaining A Loan From Peer-To-Peer Sites

There are various peer-to-peer sites that can provide start up loans for businesses in a span of 3 to 5 years for business or personal loans. If you would want to have your start up loan by using the peer-to-peer sites, you have to take note that you should have a credit rating that is reasonable and the score should at least be 620 so as to have a good credibility on the company. Since you will be having a loan from this company, then you have to maintain the good credit rating that you have in order to gain the trust of the company.

Once you have the money from them, you will then be obliged to pay for the interest as well.  Usually, the interest depends on your credit rating and the time duration that you will pay the loan.  There are some companies that offer about 12 to 25 percent annually or even lower depending on the borrower and the company.  You may want to try to research on some of the peer-to-peer sites or companies that are offering low interest rates and check on the benefits or advantages that each company are giving in order to weight the different circumstances.

5. Utilizing Your Credit Card For Your Start Up

There are some cases that people are warning business owners not to use their credit cards for start up. However, there have been some studies that are saying that this can give a huge percentage of success to give some funds for the small business. Credit cards are considered as one of the best ways for start up because it is cheaper and have lesser interests depending on the bank and you can even avail some promos to get inexpensive deals.  You just have to be cautious and responsible enough when using credit cards as a start up for your small business because overspending might happen.

These are just some of the common ways on how to avail the start up loan for small businesses.  You can try to gauge on the benefits of each and check the perfect deal for your small business.  You just have to be responsible enough when trying to go on these deals in order to avoid expensive payments in the future.

 

 

 

 

 

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