Business Loans For Startup Companies

Let’s talk about business loans for startups and how to get one.

You have the end in mind, but where do you start to get the funding you need to get the business off the ground?

A good place to start is with your personal credit scores and business credit scores, which are a measure of the creditworthiness of your business.

A good credit score can put you in a much better spot than a bad credit score, so be prepared to put in the work if you want to improve your business credit score. 

Investing in a good business credit repair or establishment program can be worth it’s weight in gold in the long run because of the opportunities it opens up.

It’s also important to look at it your business from the lender’s perspective:

• How risky is the type of business you’re starting? 
• What is your experience or expertise? Your credit history?
• How quickly will the business become profitable? 
• If the business were to fail, is there equipment or assets that can be liquidated? 

A well-designed business plan can answer many of these questions. 

Determining How Much Funding You Need

Start by asking yourself, “What do I need the money for?”

Calculate what it will cost to meet your loan purpose and that is the amount to look for.

If you can clearly articulate your loan purpose to a lender, your crowd funding campaign, the SBA, etc., you are more likely to get the money you need as opposed to simply looking for, “As much as I can get.”

Probably even more important, you’ll avoid the financial stress and repercussions of borrowing more than you really need.

What is Required to Get a Small Business Loan?

Requirements vary significantly by lender, but you should be prepared with the following:

• Personal credit reports and scores from all three major credit bureaus.
• Tax returns and supporting IRS documents for both your business (if available) and personal tax accounts
• All financial documents that would be deemed relevant (including bank statements, credit card sales, unpaid invoices, and accounts receivable due to you, if available).

As a startup business, you may not have business credit reports or even business tax returns. In that case, the lender may rely on personal credit, tax returns and/or a personal financial statement.

How Do I Get a Startup Business Loan with Bad Credit?

Without at least two years time in business and strong revenues, lenders will have to rely on your credit scores to help determine their level of risk.

A business owner with bad credit will find it tough to qualify for almost any loan. However, there are alternative lenders that have more flexible terms when it comes to credit that are worth exploring.

That’s why investing in a credit repair and/or establishment program is very important if you have bad credit right now.

The sooner you start working on it, the faster your credit will improve and will unlock more funding opportunities.

Conclusion

Starting a business is very exciting but also quite difficult to get going.

Having access to capital during the initial growth phase is crucial and cannot be understated.

Get qualified for business funding today by visiting our funding platform ROK Financial here.