Small business startups have access to a limited amount of funding options. In my near decade of experience in the business financing industry, I’ve noticed that small business startups are typically financed using the personal savings of the owner, microloans, and/or unsecured business lines of credit. In fact, according to a Gallup article, just about all small business startups are financed by the personal savings of the owner and/or debt financing. This likely means that there are funding options out there that are simply not available to small business startups. Here are several types of funding that you shouldn’t waste your time applying for if your company is a small business startup–
- Accounts Receivables Financing – This type of financing is for businesses that already have a steady stream of clients or customers they have invoiced and are awaiting payment. Your small business startup will not qualify for this type of financing if you have not been in business at least one year and began invoicing your clients. Don’t waste your time with this type of financing if you don’t at least meet that minimum criteria.
- Merchant Cash Advances – This type of financing is for businesses that already have a steady cash flow. Your business should be generating revenue on a daily or weekly basis to qualify for this type of financing. Additionally, you have to be in business for at least one year and generating at least $5,000 per month to qualify for this type of financing. If your small business startup isn’t there yet, don’t waste your time applying for this type of financing.
Apply for Something You Can Actually Get – Unsecured Business Lines of Credit
Besides microloans, unsecured business lines of credit is one of the top ways to fund a small business startup. This is because your business doesn’t need a track record to qualify. If you have good personal credit, you may be able to get unsecured business line of credit funding for your small business startup and LenCred can help. Contact us today for more information.