For those entrepreneurs that are thinking about starting a business and realize that they can greatly benefit from start up financing, you should know that there are many programs today along with many public and private lenders that can help you reach your business goals. Business startup loans are one of the most popular types of loans in the small business lending industry and the good news is that many small businesses are able to launch and grow their business due to the availability of business startup loans.
One of the first questions most entrepreneurs ask when they realize they require a business startup loan is how and where can I go to start the lending process. For those entrepreneurs seeking financing, there are several options to consider, they include SBA (Small Business Association) loans, government grants and private lenders.
SBA Business Startup Loans
SBA loans are a viable option for many small businesses that are seeking business startup loans. SBA loans are available to certain types of small businesses in practically all areas and industries. While there are restrictions, many businesses do qualify for SBA business startup loans. SBA loan categories include loans that are secured and unsecured. For secured loans, you the entrepreneur will usually need to put up a certain amount of collateral and immediately invest some amount of the loan into the business. If you are unable to put up collateral, there are other options including an unsecured loan. Usually unsecured business startup loans are for far less capital, but well worth the time and effort if you require a business startup loan. You can find out more information regarding SBA loans at SBA.gov.
Grants as Business Startup Loans
Grants are another option for acquiring a business startup loan, however it should be noted that the US federal government does not directly lend money to small businesses. Most grants come in the form of non-profit or not for profit organizations and through state or local governments. Grants are usually extremely difficult to secure and most grants require the lender to fill out lengthy forms and paperwork and meet very specific requirements. While grants can be difficult to acquire the upside is that they generally do not need to be repaid and are considered free money.
Private Funding for Business Startup Loans
There are plenty of private and commercial entities that offer business startup loans, most are either large banks, lending institutions or private investors. Usually most entrepreneurs receive financing through private funding options. For the most part, expect to put down some type of collateral; however property is usually the most commonly asked for collateral. While most loans are secured with some type of collateral, for small amounts, secured collateral may not be required. If you are interested in acquiring private funding, you should definitely visit commercial bank and lending institution web sites to find out more information about are the requirements and the process on how to apply for a small business startup loan.