A Question about Business Loans

Business Loans

Today, we’ll be addressing Bill’s question about business loans. Hopefully, reading this will help answer some of your own questions, as well.

Dear Kimberly,
I’ve been trying to decide how to fund my new company, and I’m not sure if business loans are still a viable option. I hear banks are clamping down on funding. As such, it has become nearly impossible to start up this way. Is that true?

Thank you for your question. You are certainly not alone in wondering this. The short answer is that it is definitely more difficult to get funding from a major financial institution these days. In fact, many banks are not giving out loans to startups at all. The reason for this is because too many startup companies are going under and defaulting on these loans.

One exception to this are the banks that choose to participate in the Small Business Administration (SBA) loan program. The SBA loan program provides a federally backed guarantee of up to 90% for each loan, in the case the loan happens to default. These loan programs have strong stipulations on maximum interest and fees, so not all banks are involved with the program.

If you are a highly qualified borrower, you may still be in good condition to borrow from the major banks. Of course, this means you should have near perfect credit and a solid history of income. I’d say before you discount the possibility completely, you should do the legwork to find some good candidates to be your lender. Ask what their terms and conditions are.

The other option you could certainly use (and many have) is to seek venture capital instead of business loans. Obviously, that comes with a list of its own problems, so weigh your options carefully.

For more information, go to Business Loans at http://www.unsecuredbizloan.com/business-loans/

A Question about Business Loans was last modified: November 12th, 2013 by Amit Kraidman
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