How Hard Is It To Get A Startup Business Loan

Every type of business requires some sort of loan or line of credit for a wide range of reasons: start up capital, equipment, inventory, office rental, etc. Since every business and every owner is different and has unique circumstances, the easiest business loan to get for another owner might not be the easiest for you.

For start-ups or businesses that have either no credit history or a poor credit history, it will likely be difficult to obtain traditional bank loans. Also, with a low credit score, your interest rate will be high, even if you are approved for a loan.

Lenders will usually look at more than your credit history. Other factors include your time in business, industry, your personal credit score, whether you’ve had any recent bankruptcies or defaults, balance sheet, business licenses and permits, tax returns, purpose of loan, proof of collateral, and several other reasons.

If you can think that your financial situation is likely to improve, you’ll need to provide the documentation to prove it. Always have your documents and financial files ready and organized anyway, so that you’ll be able to get through the application process as smoothly as possible.

Are SBA Loans the Easiest Business Loan to Get?

Many people don’t consider SBA Loans and long-term loans to be the easiest business loan to get, as the application process is very long and complex. Only consider SBA loans and long-term traditional business loans if your credit score is high and you have all your financial statements prepared and ready to go. However, the application process still might take some time, so you’ll have to wait on approval.

If you need cash as quickly as possible, there are options such as merchant cash advances. This type of offer will help you access capital. You’ll receive a lump sum of cash, but you’ll be expected to give up a portion of future sales. You will have the responsibility for paying back the loan itself as well as fees. While there is no set fee, $15 for every $100 borrowed seems to be a pretty typical amount by many cash advance merchants.

Invoice financing and equipment financing are pretty similar with their requirements. With the former, you’ll need to show details of your unpaid invoices, as well as bank statements and other financial information. With the latter, you’ll need to explain the type of asset(s) your company needs to purchase, and provide an equipment quote, business tax returns, bank statements, etc.

There are many other options for business of all sizes thanks to the internet. Online lenders are popping up all the time, although it’s best to stick with one that has been around for at least a decade. Begin your search with US Business Funding, an accredited company with the BBB. They will help you find the easiest business loan to get for your needs.