Unsecured business credit may be the only financing for your startup for a number of reasons. While there are many ways to finance a startup, what works for one business owner may not work for another. For example, in the ebook “16 Best Financing Options for Your Small Business“, the President and CEO of LenCred outlines a number of ways to fund startup businesses, including unsecured business credit. Depending on your unique situation, you may or may not be in a position to fund your startup business using one or more of the options outlined. Here are three reasons why unsecured business credit may be the only financing option for your startup (and why you won’t qualify for the other financing options outlined in the ebook):
- Your Business Doesn’t Have a Track Record – Most startup business don’t have a track record, (i.e. sales and revenue), because they are just starting out. If you haven’t been in business for at least one year and generating at least $100k annually in revenue, unsecured business credit may be your only option. Lack of a track record eliminates you from qualifying for a majority of the financing options outlined in Tom’s ebook, “16 Best Financing Options for Your Small Business.” Unsecured business credit is available to startup and existing businesses with or without a track record. The primary way to get approved for unsecured business credit (as a startup) is having a good personal credit history that is at least 5 years old.
- You Don’t Want to Give Up Ownership – If you don’t want to give up a percentage of ownership in your startup in exchange for funding from an investor, unsecured business credit may be your only option. With unsecured business credit you are borrowing money from a bank (without the need for pledging collateral). Therefore you will be able to retain full ownership in your company and will only be responsible for paying back what you borrow, instead of having to pay an investor a percentage of company profits.
- You Don’t Have Any Personal Savings – According to Gallup, the personal savings rate in the U.S. has continued to decline since 1977. This has affected the number of startups launched between 1977 and 2011 because most people use their personal savings to fund their startup business. If you don’t have sufficient personal savings, chances are unsecured business credit will be the only option you have to finance your startup.
Learn More About Unsecured Business Credit
At LenCred we are experts in unsecured business credit. Our consultants can analyze your situation to determine if unsecured business credit is the best (and only ) financing option for your startup. If you’re interested in learning more about the financing options available to fund your startup, I suggest you download Tom’s ebook “16 Best Financing Options for Your Small Business.” After you read through the ebook, I suggest you contact us here at LenCred to discuss how unsecured business credit can work for you.
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