Saturday, October 31, 2015

Tips for Finding Loans for Your Business Startup (part 1 of 2)

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You'll need to be a very creative and resourceful entrepreneur indeed if you want to start a business with no funding.  Although there are a few businesses that you can realistically put up with little or no money, most opportunities do require that you have startup funding at least.  One of the best ways to do this is through a loan.  But where to find one and how?  Here are ways you can use:

Prepare a business plan.
A loan is something that only serious entrepreneurs should look into.  Make sure you have a solid business plan ready.  Most lenders will probably ask you for one during the application process.

Decide on how much you need.
Your business plan should include an estimate of your capital needs and expense.  This should give you an idea of where to start to look for a business startup loan.

Look for possible sources of loans.
If you need money for a business startup, don't just go and jump at the very first opportunity to get a loan.  Many times, it might not even be a good opportunity for you.  Consider first how much you need, what you can offer in return (in case a collateral is required), how much the interest will be and how soon you'll be able to repay it.

Then, make a list of the sources of loans you can tap.  These can include:

Banks
Entrepreneurs have traditionally approached banks when they needed loans for their businesses.  Other than investing, offering loans at an interest is actually the bank's way of earning money.  If your small business startup needs a loan, a bank is a good place to start.

What you can expect: your banker should be able to assist you in finding the right loan for your business startup.  Ask if loans are underwritten at the local level.  It will be easier for you to obtain and negotiate for one.

Look for small business loans as well.  Not every loan type a bank offers may fit your needs and capability.  Besides, a bank that already provides loans for business startups will be more capable of and experienced in handling your unique requirements better.

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