Sourcing for funds to finance a startup is one of the toughest tasks a new business owner can face. Even with a solid business plan and excellent business ideas, you may not qualify for a traditional loan. Many conventional financial institutions will only lend money to businesses with a credible credit history, a proven track record of at least two or three years, and an owner’s equity stake in the business. Lending money to a small start-up business is considered risky because there is no evidence of a company’s ability to succeed, meaning there is a lower chance the business will be able to repay the loan.
Whether you have excellent credit, fair credit, or somewhere in between, obtaining funds to start your business shouldn’t be complicated or time-consuming. Small business financing with NWT Capital can enable you to get solid loan terms making it possible for you to grow your business and establish better credit even if you are just starting out.
Today’s entrepreneurs have a wide range of options when it comes to financing start-ups. However, a key challenge is determining the type of start-up financing that is most appropriate for your company’s future needs. Failure to fully understand the rate and terms offered for each loan can slow your business’s growth and start you off on a very wrong note.
Here are some loan options to consider:
Small Business Administration (SBA) is an excellent source of small business funding that offers a number of loan programs to small businesses. The micro-loans can reach up to $50,000 and are much easier to get than conventional financing.
This is a loan given for the purchase of equipment, machinery, or inventory. A lump-sum loan is given based on the equipment value, which you’ll pay back with interest over time.
If your business struggles with gaps between invoices and payment, invoice financing can be a good option for smoother cash flow. It lets start-ups with unpaid invoices convert those invoices into actual capital.
Business line of credit
A business line of credit is a short-term loan that can be used to refinance debt or finance working capital, payroll and other types of expenses covered by credit card financing. As a borrower, you only pay interest on the money used and not on the maximum amount you can borrow.
Businesses that are pre-revenue and still at their initial stages will usually have the best chances of getting a loan by seeking a personal loan. They typically have a max size of $50k and an average APR of 14-20%.
Merchant cash advances
Start-ups can get money in exchange for a portion of their daily credit card sales. When your business does well, you pay more, and on slow days you pay less.
To qualify for start-up financing, requirements for each will loan will vary significantly. You will typically require a good business plan to show lenders how you plan to manage and grow the business.
Fill out our online form and browse through our loan options today. Our friendly and knowledgeable staff will get in touch to discuss further. We know what is right for your specific situation and can help increase your likelihood of getting the appropriate loan product. Contact us today!