In Need of Financial Assistance For Your Startup? Look No Further
Starting a business can be very daunting but the process is highly rewarding. Of course, it is important to have an excellent business plan in place but the financing aspect is the most critical. A business needs financing to start and succeed.
Unfortunately, it can be very difficult for some startups to get financial assistance, especially if they have a below-average credit score. When you need startup financial assistance, there are some options that you can explore. This post shares some of these options
Small Business Administration Loans
For startups looking for long-term and low-rate financing options, the SBA is the best option. Small Business Administration is a United States government agency that offers support for small businesses and entrepreneurs. To be eligible for the financing offered by this agency, a business owner must have between 20-30% of the capital contribution.
Although the process may be a tad difficult, it is worth your while if you meet the eligibility criteria. Startups can access between $25,000 and $350,000 funding if they qualify. It usually takes between three to six months to complete the application process and get the fund. It is important to mention that when this loan is approved, you must use it for only approved expenses.
Business Credit Cards
This is one of the most popular business financing options that business owners consider. This is because it comes with numerous perks and many advantages. A startup can get between $5,000 and $150,000 worth of financing with this option. With impeccable payment history, a business can get more than this.
One major advantage of this type of financing is that it does not have any restrictions on utilizing the funds. Additionally, the processing is fast as you can get the funding you need within five working days.
The basic documents you need to process business credit cards include business registration documents, articles of incorporation, and federal tax identification numbers. If you have an excellent personal credit score, your time in business would not matter.
Startups that need equipment to start operations can consider equipment financing. The funding available for equipment finance ranges from $10,000 to $150,000. If you consider this option of business financing, you must know that the fund does not have any flexibility. This means that you have to use the fund for the specified equipment and nothing else.
Companies that offer equipment financing can provide funds within thirty to ninety days but your documents must be complete before the approval can be processed. Documents that are required to apply for equipment financing include bank statements, approved purchase orders, balance sheets, and financial projections. A business must be over six months old to qualify for this type of loan.
Friends and Family
This is one of the easiest, flexible, and fast ways of getting funding for a startup. As an entrepreneur, this is the most flexible and fastest way of getting funds for your business. Before you proceed to seek financial assistance for your business from friends, you must have a good business plan and a detailed financial projection.
This will enable your contact to understand what they are investing in and their capital contributions to the business. The specific amount of funds you can get with this option depends on the lender. The best part about using this finance option is that you mostly do not need to go through a rigorous documentation process.
These are four options of startup financing that you can consider as an entrepreneur. Before you explore any of these options, you should have a good and detailed business plan as well as your financial projection.