Small business startup loans do exist. However, small business owners find them difficult to obtain, mainly because they don’t know what’s available. Furthermore, there is only a limited number of small business startup loan options. As a small business startup loans expert, many people contact me for assistance. Most of them have unrealistic expectations or know nothing at all about how to obtain small business startup loans. They either believe that they can get hundreds of thousands of dollars (sometimes millions) in small business startup loans or have no idea what is available to them. In this blog, I will outline what types of small business startup loans are available to startups and how to qualify for them.
Small Business Startup Loans for Excellent Credit
The best small business startup loans for people with excellent credit is unsecured business lines of credit. So, in reality, these are lines of credit, not small business startup loans. However, either way it goes, unsecured business lines of credit are very easy for small business startup owners to obtain when they have excellent credit. Having excellent credit when applying for small business startup loans makes the process much easier. Lenders are eager to lend money to people who have an established credit history that proves they can handle different types of debt and make timely payments.
To qualify for unsecured business lines of credit, you will need to have a credit history that spans over at least 5 years, no late payments, diversified account types (i.e. loans and lines of credit), no derogatory or delinquent accounts, and less than three inquiries in the last six months. You should also have personal credit cards with a combined total limit equaling $5,000.
Small Business Startup Loans for Less Than Perfect Credit
The best small business startup loans for people with less than perfect is microloans. A microloan is an alternative small business startup loan option for new businesses. What’s great about a microloan is that you can have less than perfect credit and still qualify for up to $50,000. In fact the SBA, recommends that small business startup owners with less than perfect credit apply for a microloan first before applying for any other types of small business startup loans. This is because it enables you to rebuild your credit history and build a relationship with a lender.
Building a relationship with a lender is critical when your business is a startup because you’ll likely need capital for your business for as long as it’s in existence. When you have a strong relationship with a lender, you can always go to them to apply for financing. As long as you pay your small business startup loans on time and they want to continue the relationship with you, you’ll be able to count on them for funding in the future.
To qualify for a microloan, in most cases you’ll need at least a 575 credit score. Additionally, you can’t be 60 days late on IRS debt, students loans or child support. If you have any bankruptcies, they must be discharged for at least one year. Furthermore, you can’t have any foreclosures in the last 24 months. Lastly, you can’t have charge off’s over $500 if your business is a startup. If you can meet this minimum credit criteria, you can qualify for up to $50,000 in small business startup loans for your business.
Get Help Applying for Small Business Startup Loans
The best way to get small business startup loans in the easiest and quickest way possible to get help from an expert. An expert will be able to analyze your personal credit history and tell you exactly what you will qualify for and what lenders to apply to. This will minimize the level of difficulty you may face when applying for small business startup loans because you will be doing it right the first time.
LenCred specializes in helping entrepreneurs get small business startup loans, specifically unsecured business lines of credit. If you have excellent credit, contact LenCred today to get started. If you have less than perfect credit, QT Business Solutions may be able to assist you with obtaining a microloan.
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