If you’re looking for funding for your small business startup in New Jersey, and your personal savings isn’t enough, there are other options you may be able to take advantage of. The first step is knowing what those options are and how to qualify for them. Three funding options that tend to work well (and are highly recommended by most experts) for small business startups include unsecured business lines of credit, SBA microloans, and IRA/401K financing. Here’s what you need to know about each funding option to determine if it’s a good fit for your small business startup in New Jersey.
Unsecured Business Lines of Credit
An unsecured business line of credit is considered short-term financing that can be used for any business expense. It is a good funding option for small business startups in New Jersey where the owners have a good personal credit history. Good personal credit is needed to qualify for unsecured business lines of credit therefore a personal guarantee by the business owner (or someone affiliated with the business) is required.
In most cases the unsecured business lines of credit will not report to your personal credit history even though you are required to provide a personal guarantee. As long as you don’t make late payments or default on the unsecured business line of credit, it shouldn’t affect your personal credit history in any way. Another great thing about an unsecured business line of credit is that it is revolving debt. Therefore, as long as you make timely payments and pay off high balances in a timely manner, you could have it for the life of your business (or for as long as the lender wants to continue their relationship with you). If you’re interested in applying for unsecured business lines of credit, contact the experts here at LenCred for more information.
SBA Microloans are recommended to small business startups in New Jersey (and just about every other state) by the Small Business Administration. This type of funding option works well for small business startups in New Jersey where the owners have no personal credit history or less than perfect credit. Lenders that offer SBA microloan programs often require more information to determine whether or not you will be approved and the process typically takes longer in comparison to unsecured business lines of credit. However, it can still be a great option for small business startups in New Jersey that have no other way of obtaining funding.
Using your retirement account can be a great way to fund your small business startup in New Jersey. If you don’t want to borrow the money, using money that is already yours may be your only option (especially if you don’t want to give up equity ownership in the company in exchange for funding). The good news is there is a way you can legally use the money you’ve invested in your IRA or 401K to launch your small business startup in New Jersey. If you’re interested in learning more, contact the experts here at LenCred for more information.