How Much Do You Need?

The amount of money you need to get started in a business depends on the size and nature of your business. For example, if you’re starting a small home-based business, $10,000 might be enough. If you’re starting a small commercial operation, $50,000 is usually necessary. But if you want to start something big and ambitious like a franchise or an online store, it’s recommended that you get at least $100,000 or more.

The amount of money you need to get started in a business depends on the size and nature of your business. For example, if you’re starting a small home-based business, $10,000 might be enough. If you’re starting a small commercial operation, $50,000 is usually necessary. But if you want to start something big and ambitious like a franchise or an online store, it’s recommended that you get at least $100,000 or more.

Types Of Start-up Business Loans

SBA loans

The Small Business Administration (SBA) is a government agency providing loans to small business owners. The SBA guarantees the loans to be repaid if the business fails to pay back the loan. Loans given by SBA are used to buy equipment and other purposes that will help you start a new business.

The maximum amount you can borrow from SBA is $150,000, and you need to pay back your loan within 30 years. If you decide not to repay your loan on time, SBA may take your assets like property, vehicles, and cash as collateral. You have to provide a personal guarantee if you don’t repay your loan on time or if your business fails to pay back the loan.

Microloans

The microloan program is a government-sponsored program that provides small loan amounts to entrepreneurs interested in starting a business. There are two types of microloans: the first one is for self-employed people, and the other is for those who want to start up their businesses but don’t have enough resources to fulfill their dreams.

The criteria for getting a microloan are simple: you should be at least 18 years old, must be employed, and have an income of at least $25,000 per year. You also need to submit your business plan, financial statements, and supporting documents like tax returns. The approval process can take up to three months.

Personal business loans

If you have a business idea and want to start your own business, consider applying for a personal business loan. You can get a loan from private lenders with low-interest rates, usually above 10%. If you cannot repay the loan on time, the lender has the right to seize your assets like real estate and vehicles. However, if you have experienced financial difficulties in the past, it might be challenging to get a personal business loan.

Grants for startups

If you want to start up your own business but don’t have enough money to invest in it, then you can apply for a grant. The grants are available for small businesses and startups. The grants are usually from government or charitable organizations.

There are two types of grants: startup grants and expansion grants. Start-up grants are usually offered for new businesses, and expansion grants are for existing businesses that want to expand their operations. There is no maximum limit on the grant amount you can get (although the amount is usually less than $25,000). However, you should ensure that the business will be profitable enough to repay the loan on time. If it is not, then the grant money will be lost.

Friends and family

You can also get a small business loan from your friends and family. In most cases, the money will come from their savings. However, it is essential to ensure that you have a good relationship with your friends and family members. You should also make sure that they are willing to give you money because they might not afford it if you fail to repay the loan on time.

Business Credit cards

Credit cards are great for small business owners as they can get a significant amount of money quickly. However, you have to make sure that you repay the credit card debt on time. You should also make sure that your credit card company will not cancel the credit card on you. In most cases, this is impossible because of the nature of the business. If your credit card company cancels your card, you will have to pay a high fee for canceling it and applying for a new one.

Crowdfunding

Crowdfunding is a new way of raising funds for small businesses. You can get a small business loan from crowdfunding platforms like Kickstarter and Indiegogo. These platforms help you raise money for your business by selling your product or service to the public. The amount you get from the platform depends on how much money the platform has raised and how many people have contributed to your campaign.

What to Look for when shopping for startup business loans

Interest rates

As a small business owner, you need to make sure that the interest rate you get when you take out a loan is reasonable. You will not be able to pay back the loan if it is too high. It is essential to compare the interest rates that different companies offer you and choose the one which gives you the best deal. You should also compare the terms of your loan with those of other companies to make sure that your business can grow in the future.

Duration of your loan

It would be best to consider how long you would need to repay your loan because it depends on how much money you need for your business and how quickly it will grow for you to repay it. If you are getting a short-term loan, then this means that there are many risks associated with it, such as not being able to repay it on time or having an unexpectedly high repayment amount compared with what was expected by you.

Repayment amount

If you are getting a short-term loan, then this means that there are many risks associated with it, such as not being able to repay it on time or having an unexpectedly high repayment amount compared with what was expected by you. The repayment amount is the amount you will have to pay back every month, and it depends on what your business does. It also depends on how much profit you make each month and how long it will take for you to get enough profit to pay back the loan.

Payment schedule

The payment schedule is when your loan will be paid off after the borrower has paid back only a portion of their debt. The length of this period will determine how quickly your business can grow for you to repay it. If you are getting a short-term loan, then this means that there are many risks associated with it, such as not being able to repay it on time or having an unexpectedly high repayment amount compared with what was expected by you.

Repayment period

The repayment period is when your loan will be paid off after the borrower has paid back only a portion of their debt. The length of this period will determine how quickly your business can grow for you to repay it. If you are getting a short-term loan, then this means that there are many risks associated with it, such as not being able to repay it on time or having an unexpectedly high repayment amount compared with what was expected by you.

Find and Compare Small-Business Loans in Your Area

Startup business loan options are available in various areas so that you can find the best deal for your business. You’ll want to compare the rates and terms of different loans, as well as the types of companies that are eligible for them. When you’re looking for a startup business loan, be sure to consult with an experienced lender to get the best deal for your business.

CONCLUSION

Small-business loans are an excellent option for entrepreneurs. They are available in various sizes and can provide the money you need to start your business. However, finding the right loan for your business can be challenging. Compare different loan options and find the best one for your business.

The post How to Get a Loan to Start a Business appeared first on Fund Small Business.

All About SBA Loans

What Is an SBA Loan?

Lack of funding is a major barrier to the start and expansion of a business. This is more so in small businesses because they have access to a narrow pool of lenders. The government appreciates this as much and has offered viable and concrete solution to the problem, the availability of SBA loans for instance.

Jared Hecht, writing for Forbes, states that an SBA loan is a loan which has partially been guaranteed by the Small Business Administration. Because this loan option is a guarantee by the government, the issuer of the loan carries fewer risks, and therefore, lenders are more willing to offer such loans.

The Top SBA Lenders

As a business owner, you cannot make a direct application to SBA. Rather, you are going to work hand in hand with approved lenders, who will evaluate your individual case, and make a decision on whether to extend a loan to you or not.

There is no shortage of SBA lenders, however, there are some which have been observed to be the most active. These include the following:

–Live Oak Bank

–Bank of the West

-Funding Circle

–Fundera

–JP Morgan Chase

The type of lender you choose should depend on the specific needs and preferences of your business. For instance, if you want a quick and an easy small loan, then the lender to choose is Funding Circle. Similarly, if you want a big loan, then, the best lender in a big loan is Bank of the West.

SBA Loan Types

There are various loan programs under the SBA. The SBA (7) a standard Loan is the most common type of loan extended by SBA. This is the loan applied for when businesses are seeking financial help in both the short term and the long term. In this loan, both the borrower and the lender can negotiate a favorable interest rate, however, it must meet the interest rate requirements by SBA. For the loans that are less than $25,000, then, one may not be asked to present collateral.

The SBA (a) Small Loan is the type of loan that is given to an applicant seeking over $350,000. With this amount, one is required to present collateral that has a reasonable price. Again, the maximum amount of interest required by SBA applies.

The SBA 7 (A) Express Loan attracts an amount worth $350,000. With this application, one can access the loan in a record 36 hours. Because this loan has a quick turnaround, the amount of collateral required is 50 %.

The SBA Caplines Loans are loan applications for the short term needs of the business. There are divided into four main categories: seasonal, contract, builder, and working capital. When applying for this loan, be sure to look at your business needs in order to choose the best category.

The SBA 504 Loan is a loan for businesses’ economic development, and therefore, it cannot be used for inventory or working capital. Benefits for this loan include lower cost of interest, lower loan fees, and a lower down payment.

Pros and Cons of SBA Loans

There are a plethora of benefits with applying for SBA loans. To start with, the SBA loan is more lenient to qualify. This is because the government backs as much as 80 % of the loan. The government works to empower its citizens, and in this case, it provides financial options which are not available in commercial lines. Unlike the commercial loans payment which gives a shorter time, the SBA loans can be paid over a longer period of time. This gives the borrower flexibility when it comes to loan re-payments.

The Harvard Business School notes that SBA offers critical financial services to areas which are neglected. As a matter of fact, the program directly touches on the lives of the American people.

SBA loans are not without a fair share of challenges. The biggest barrier to the SBA loan is the amount of paperwork required. This is not only tedious but also time consuming. It should also be noted that the SBA loan takes a longer time to be approved. Therefore, if you are using this option, be sure to make an application for approval and processing.

If you default on your loan, the first thing to be liquidated is your collateral. Therefore, you have to make an informed decision prior to taking this loan. In this regards, it is not prudent to give your home as the collateral.

How to Apply for an SBA Loan

The first course of action is to evaluate if the loan is going to work for you are not. This will largely depend on the health of your business. Much as the terms may be lenient, bear in mind that this is a loan that you are going to pay back.

If you feel that this is the type of loan that you would want, contact your local SBA office with your complete application. The SBA local office will look for factors such as the business model, the amount of loan you are seeking, your credit history, and the possibility of getting collateral for your loan.

You must be armed with a concrete business plan detailing the scope of your business and its viability. You must show the willingness and ability to commit at least part of the loan to the project.

In exceptional circumstances, one can apply for two loans. However, if you are to qualify for two loans, you must have a good credit standing. At the same time, each type of loan is going to attract its own set of requirements, and therefore, you must meet them individually. In addition to that, you must give evidence of a reliable cash flow for your business.

Conclusion

Whereas SBA loans can have a tedious application process, the benefits of are equally rewarding. There is no reason why a business should stagnate due to lack of finances, when an SBA loan is just online steps away. Overall, an SBA loan stands out among the peers.

The post SBA Loans appeared first on Fund Small Business.

Here are eights ways on how to get a loan for a small enterprise:

Bank Loans

The first thing you must know before you get loan for small business is that banks are not eager to give out loans. The reasons are many and varied, but they all boil down to risk. Banks have limited resources and would rather lend money to borrowers who are most likely to pay them back. If you’re looking for a loan that can boost your small enterprise, banks can be the right source.

Grants

If you’re looking for money to start a small business, grants can be the perfect solution. Grants are free money given to businesses and organizations by government agencies and non-profit organizations. A grant is not a loan that must get repaid with interest or principal. Instead, it’s an award of money, usually from a government agency or organization, for which there is no payback requirement.

SBA Micro-Loans

Micro-loans are small loans (usually less than $35,000) that are given to individuals or businesses through a network of local and national nonprofit organizations called micro-lenders.

If you are a small business owner in the U.S., you can apply for a micro-loan directly from the U.S. Small Business Administration (SBA). The SBA 7 (a) Loan Program offers micro-loans to help small businesses get started, grow and create jobs.

Arguably, the best part of this program is that, while loans are made at the discretion of the SBA and depend on your business’s ability to repay them, they all have fixed interest rates. These rates are currently about 4% for loans with terms up to five years and around 5% for loans with over five years repayment period!

Small Business Startup Loans: Equipment Financing

Business startups need capital to get started, and many entrepreneurs opt for equipment loans to start their business. If you want to get loan for small business, equipment financing is a good way for an entrepreneur to get their business off the ground without going into debt.

There are a lot of things that go into a small business startup. Make sure you consider all the costs before diving in, and make sure that you have a plan for where to get equipment loans if needed.

Equipment financing can help your business grow by providing an easy way to purchase equipment without having to come up with a large amount of cash at once. It is ideal for businesses that have a need for expensive equipment but do not have the cash on hand to purchase it. There are a number of advantages to using an equipment loan as opposed to other forms of loans that might be more expensive.

Business Credit Cards

Most business credit cards are a blessing. They can help you start a business, work on it, and grow it to the next level. Business credit cards also have their share of effects. You will be in debt immediately, and have to repay the money you spend on these cards each month.

Business credit cards are one of the easiest ways to manage your business expenses. They also offer flexible payment options, rewards, and other benefits that can save you money on your business purchases. However, they come with high interest rates and fees, so it’s important to choose the right business credit card that can suit your small enterprise.

There are a few features you should look for in a business credit card to make sure it’s right for your business. These include reward programs that allow you to earn points or cash back on certain purchases. Rewards can get used by business people for travel to pay all the expenses during a trip. If you are a small entrepreneur doing business worldwide, consider using a business credit card to cover your expenses!

Venture Capital

When a company is just starting out, it’s important to have funding. There are many different types of funding that a company can receive from different sources. However, venture capital is very different than other forms of funding.

Venture capital is an investment that gives the investor equity in the company. This means that the investor will own part of the company, and will receive a portion of the profits if the company does well. When a venture capitalist invests in a company, they are looking for high growth potential and huge returns on their investment. In exchange for this high potential, the company must give some of the returns to the capital lenders. Small business operators can use venture capital to help their businesses grow.

P2P Lending and Crowdfunding

Crowdfunding is one of the most exciting and fastest growing online industries. There are two main types: reward crowdfunding, where you offer a product or service as a reward to your backers; and equity crowdfunding, where you give your backers shares in the company (e.g. when you go to an IPO).

Crowdfunding is a new way for businesses to raise capital for their startup, by letting people invest small amounts of money in exchange for rewards such as t-shirts, stickers, gadgets or invitations to parties or events.

P2P Lending and Crowdfunding is a new way of funding startups without going to the bank and without involving any risk. It is an alternative investment vehicle that has been more popular currently than ever before and will likely continue to grow in future.

Personal Loans for Small Businesses Startup

A lot of small business owners are finding it difficult to get the funding they need from banks and other traditional lenders. Banks have been tightening their lending criteria over the past few years, making it more difficult for small businesses to get a loan for their startup. But there is still hope for these business owners.

Personal loans for small businesses can be a great option for businesses looking to start up or expand in today’s competitive market. These loans are unsecured, so they tend to be easier to qualify for than many other types of loans. Some lenders will even consider an unsecured personal loan for their small businesses startup!

There are several advantages to financing your start-up this way, namely because you don’t have to put your personal assets on the line. You can also get funds quickly, with loans typically being approved within 1-2 weeks.

Where Are the Top Places I Can Get a Loan for Small Business?

Whether you’re expanding your business or starting a new one, getting a loan is a great way to get the funding you need to make it happen. It’s an excellent way to help make your business ideas a reality and give you the resources you need to expand. But where should you go to get that loan? Here are some of the top places to get a loan for a small business.

Kabbage – Best for Medium-Term Funding

Kabbage provides a platform for businesses to receive small business loans up to $500,000. Unlike other competitors in the industry, Kabbage does not require personal guarantees from applicants and will complete financing within 24 hours of application approval.

Kabbage’s unique funding process has made it an appealing option for entrepreneurs looking for small business loans. In fact, Kabbage has lent over $10 billion to merchants as a “turnkey solution” to help them grow their business.

Rapid Finance

Getting a loan for a small business is easy. Getting a loan for a bigger business is more complicated. However, it is still possible in the right circumstances and with the right lender. That’s where Rapid Finance comes in. They specialize in helping businesses that have larger loans. Because they know how hard it can be to get hold of the funds you need, they work with you closely to make sure you succeed in business and repay their loan.

National Funding

The National Funding is a leading equipment financing company and they’re committed to provide the best services to their customers. They have a broad range of financial solutions and are ready to help your business grow.

Their team of experienced financing agents will guide you through the application process, which takes only a few minutes. If you qualify for the loan, they can approve it quickly and wire your money the same day. They work hard to maintain strong relationships with leading lenders to get you the best rates possible!

BlueVine – Preferred for lines of credit Amounting to $250,000

Are you a small business owner who needs a line of credit to grow your business? The best place to get a line of credit is BlueVine. It’s easy, convenient, and has flexible repayment terms. Apply in minutes.

BlueVine is the fastest way to get a business loan. With one application, they can match your needs with multiple lenders, then qualify you for the best rates. They don’t charge any fees and they have no hidden costs.

Fundbox

Fundbox is a new and interesting startup that has found an interesting way to provide short-term loans to businesses. Fundbox allows online businesses to borrow money without having to wait the typical two weeks it takes traditional lenders to release funds.

This platform is ideal for small business owners who need money in the short term. You can read more about their model, and how they manage their risk, and get a loan for a small business on time.

Final Thoughts!

If you’re looking to start a small business or grow your enterprise, you can identify some of the sources of small business loans provided above. There are specific places you can get a loan, including Fundbox, BlueVine, National Fund, and more. Make sure you choose the best source of a business loan that you can repay easily.

The post How to Get a Loan for Small Business appeared first on Fund Small Business.