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Posts Tagged ‘start-up loans’

How To Get A Personal Loan For A Business Start-Up

Wednesday, March 31st, 2010

When you have that great idea for a new business, and have the plans worked out, all you need now is the financing and you can get started. Finding financing, however, especially for a new business, can be difficult because lenders have seen many businesses come and go, and may be more than a little reluctant. Another way to get the financing you need, though, would be to get a personal loan. A personal loan can be rather easily obtained and you can get them in large or small sizes.

Personal loans can be obtained for a value of more than $200,000. Of course, they will not lend this much to just anyone, but if you have a good credit rating and a regular strong income, then you could get a lot of money for your business start-up. Lenders, however, may want to see a track record of repayment, and you may need to start with a smaller loan from them and work your way up to a larger loan.

These loans come in both secured and unsecured loans. Secured loans means you need to put a house or a car onto the loan as security. For a new business, though, you may want to think this through very carefully because, if you cannot pay the lender – you may lose the house, too. A secured loan will give you better options and terms than an unsecured loan.

Unsecured personal loans do not require that you place anything as collateral for it. Because the lender is at a greater risk, though, you need to be aware that they charge more. That means you will pay a higher interest rate, get a smaller amount, and have less time to pay it back.

Personal loans are based on your credit report. This means it could really help you if you get a copy of your credit report before applying for a personal loan and verify that there are not any mistakes in reporting on it. Mistakes are common, and it can effect the terms of your loan – especially if there are some negative things involved.

Although a personal loan is one way that you could get money for your new business start-up there are also other ways available that you may want to look into. One of these could be a home equity loan that will give you the lowest interest rate, but again, your home is tied up into the transaction. Be careful. Other ways include special business start up loans, which will require a thorough business plan and a lot of financial details. If you want something quick, though, a personal loan without any security will be the fastest way to go.

Getting any loan means that you should shop around first, and then sign after you are sure it is a good deal. By using the Internet, you can easily get several online quotes for your personal loan in a very short time. Take the time to compare things like interest rates, length of time that you have to repay the loan, and how much money you can get. You will want to consider the overall costs, too, in the event you get any other kind of loan.

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How To Increase Your Chances For Getting An SBA Loan

Saturday, August 22nd, 2009

Many of our start up business clients at www.Ethos360.com come to us with basic questions on how to get financing from the SBA.  There are a few things to have in your back pocket (and on the tip of your tongue) before going to them in order to increase your chances of getting approved. 

1.        Know your business inside and out.

You will need a business plan that not only covers all of the details of your business idea, but is also devoid of unnecessary embellishment and hyper extended financial projections.  The SBA wants to know what you’re doing and how you’re going to do it.  Also, they want to see evidence that you are qualified and capable of executing the tasks outlined in your business plan.  The Management Summary of your business plan should detail your experience or at least the experience of the people you’ll have on hand to make up for any lack of qualifications you’ll have. 

2.       Show that you have invested in yourself and your business.

This seems like an obvious requirement, but a surprising number of people come up against a wall when faced with this.  The SBA is not a zero percent down financing solution. You will have to show that you have invested a good sum of your own money, time and effort into the business in order to get the SBA to put up the loan.  The SBA will not underwrite 100% of the venture so this means that you will have to not only have collateral for the loan, but will be providing evidence of having previously invested at least 25% to 50% of the asking amount in the business.

3.        Understand that the SBA will examine your asking amount and prepare.

The SBA is very concerned and interested to know where the money you’re requesting will be going.  Being prepared with a breakdown of future spending along with brief explanations as to what the money will be used for will help the SBA determine the level of your asking amount.  Approaching a loan officer and just saying, “I’ll be needing $100,000, please” will not work half as well as illustrating in detail what that $100,000 will do such as: “I’ll need $50,000 for a new truck, $20,000 tenant improvements on a new office space, $10,000 for working capital, and $30,000 on upfront rent on an office space.”  Keep in mind that a business that has been in existence for more than a year has a better chance of getting an SBA loan than a start-up. 

There are many more tips and tricks to help increase your chances at getting funding from the SBA.  It may seem a little daunting for a first timer to gather their ducks in a row, but there are many low cost ways to prepare you.  Small business coaches and mentors can help a great deal with putting together what you need to help your business get financing. Don’t be afraid of approaching the SBA, they’re there to help.

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Posted in business loans, business start-up, raising capital | 1 Comment »