In starting a business, capital is considered as the most crucial part of making it possible, especially for starting businessmen. It isn’t easy to secure the right amount enough to run your business smoothly. Good thing there are already a lot of resources available nowadays.
Borrowing or loaning
money has been the most natural solution to this situation. There are
commercial lenders, bank institutions, and online lenders that allow startup
businessmen to borrow money. These institutions offer different kinds of loan
options that may work for you.
In this article, we will site the different loan options that you can choose for you to start a business.
1- Personal Loans for Business Use
The first on the list
is filing for a personal loan. This loan is a popular option in funding a
startup business. It primarily works for personal usage, but it is also
advisable if you want to start your business. Having a good credit score is the
only key that is needed to get fast approval.
What you need to be
careful with personal loans is that they commonly have high APRs (Annual
Percentage Rate). It is considered as the best option for an individual that
has a healthy credit score and high income.
If you are interested
in filing a personal loan for your business, there are a lot of online lenders
such as CreditMadeSimple that can help you. You can check
out their website, and they can assist
you in settling your loan right away.
2- Personal Credit Cards
We have seen that credit cards are used in purchasing whether in online shopping, marketplace and on daily usage. But did you know that personal credit cards can also be used in funding your business?
A personal credit
card allows you to support your business capital. It also has an inviting
rewards points and cash back perks every time you use your card in purchases
and even staff expenses.
One thing you should
be wary of using personal credit cards is that they have a high limit of APR
percentage and low credit limit. Hence, you need to continually check in order
not to be burdened with monthly dues.
3- Installment loans
Other than the personal loan, an installment loan is one popular loan option that works and is easy to apply. An installment loan is given in a lump sum amount that is needed to be paid in a fixed period. The interest rate fee is included in the total amount payable by the borrower.
Pro-tip in managing
installment loans is to make sure you apply for a long-term loan with a
low-interest rate. Rather than engaging in a short-term loan with a
high-interest rate, the latter would surely be a burden for you and your
business.
Also, unpopular
advice, as a startup businessmen, you need all the help and resources
available. You may overlook the support from your family and friend – there is
also a great option to turn to apply for an installment loan. You can ask for a
low-interest rate and much more flexible payment terms easily.
4- Microloans
If you were just
starting to venture out in growing small businesses like food trucks, mini
stalls in the mall, or just a simple pop-up store, you might well consider
seeking and applying for a microloan. Microloan
effectively works for small and medium enterprises
as it offers a short-term loan period with a low-interest rate.
Startup businesses
that need $50,000 to run and grow their business, applying for a microloan, is
the best option. Since this loan is intended for business with no credit or has
poor credit status, ensuring collateral or a personal guarantor is needed.
Having a co-signer in
microloan is not that overwhelming since the amount is not that taunting for
them. Just make sure to convince them and ensure first that you will secure to
pay your loan on time.
5- Equipment Loans
There are different types of business, and yours might need too many equipment purchases like an expensive machine, computers, and other hardware required to run your business. The best loan option for this kind of business is an equipment loan.
This loan is much
more fluid compared to other loan options mentioned above. They usually require
no down payment and depend on the equipment you are purchasing. And frequently,
money lenders are more lenient to equipment loans. With their flexible payment
plans, all you need to secure is to pay the loan on time. Otherwise, the lender
has the right to claim the equipment and sell it to gain their money back.
If you are
uncomfortable being in that situation, you might want to be sure of your
decision to get an equipment loan.
Takeaway
Starting a business
might be a little daunting for anyone, and having a business is only for tough
ones. But getting started shouldn’t be that handful when there are available
resources that can help you. You only need to be thorough and decisive on what
loan option you will choose. Remember that making your business grow and work
is in your hands.
