There are a number of ways to fund your business ventures, and certainly not just getting a business loan. You could seek venture capital or plead your case to angel investor firms. You could also borrow money from friends and family. Today, we will be discussing some of the ways to get a loan to give you an idea of where to start.
Before you even begin looking for a business loan, you should assess your worthiness. To do this, you’ll want to gather the following documents: your personal credit reports, your business credit reports, your current income statement, and your company’s profit & loss statement. Once you have all this information, you’ll want to review your credit reports for errors. If you find errors, you should deal with those first. This will save you a great deal of trouble and money in the long run, as well as in the short term.
Once you’ve gone over all your documents, you’ll want to see what options are available to you. If you have less than perfect credit, it may be difficult getting funding from a traditional lender. One way to get a bank loan, even with less than perfect credit, is to reach out to the Small Business Administration to see if you qualify for any of their loan programs.
The 7a program is the all-purpose program for small businesses. However, you may also qualify for one of their specialty programs, as well. Without perfect credit, and without using the SBA, your options are somewhat limited.
You can seek out a business loan from a non-traditional lender, but those will typically be very expensive. Another option that many new business owners opt for instead is to get a home equity line of credit. Although this option is likely much less expensive, you are also taking a great deal more risk. Thus, you should weigh your options carefully before deciding to go with that option.