Starting a business might seem so ideal. But, you’ll be surprised at how hard it actually is. From formulating a good business plan, getting a capital to marketing your products — penetrating the business is a tough process, even for the small scale of business.
So, to start you need a loan for the funds. Here’s a checklist that might help you in deciding which one you should get.
Bank loan
If the odds are in your favor, a secure bank loan can help you to start-up. This loan usually works in businesses that have good credits.
What good in a business loan is it can build up your credit history. But the bank loan is not flexible for payments. Some bank also charges a higher rate.
Personal loans
Don’t have yet a good business credit? No worries, it’s still possible to have funds with your personal loans. For start-up, this is an actually a good idea. You can save up as these loans have lower rates. Plus, the repayments are flexible.
A good thing to remember when you’re getting funds from your personal loans is to not let it damage your personal credit score. One good way to go is to apply for credit that is stable and from reputable lenders. Read here an article that will give you everything you need to know about secured credit cards.
Term Loans
If you need quick loans to cover cash shortfalls, the term loan is also a good way to go. It is secured. Some banks offer a low-interest rate. There are also alternative lenders that offer a lot of option with this. The arrangement for payment is also flexible. You can work out a favorable financing term with your lenders that can help your business funds. You can also avail small business administration loans.
Startup Loan
Good thing with this is it’s personalized option for startup businesses. These are offered by private lenders. The loan limit is also flexible, as do the loan terms.
Peer to Peer Loans
P2P or Peer to peer loans is an unusual way to get loans. But with the right lenders, P2P loans is a good deal for a startup business. Basically, a group of investors will claim a share on the interest that you need to pay. You can get large of amount with this alos in a short period of time.
This is an effective alternative to consider if you have a low credit score.
Microloan
You can also apply to alternative lenders like credit unions. A microloan is easier to get for those with low credit. The downside is this loan only will give you a small amount of money.
Merchant cash advance
While this isn’t technically a loan, merchant cash advance is a way for businesses to get access to capital quickly. Your payment will be based on future credit and debit card sales. Simply stated, this is a risky way to get funds, it has higher rates. You might need to pay more than you borrow.
Equipment Loans
This loan specializes in financing your equipment. With this, you can have your equipment at your doorstep.
These equipments you loaned automatically became the collateral. So until you don’t fulfill payment, the equipment is still not your own. This can be funded quickly, especially if you’re getting an sba equipment loan, often in as little as two business days. Some lenders too require a large down payment for this.
Friends and family
If you have a loving lot, you can ask around for funds. But just make sure that you have a good business plan. So you can repay them on time.
