Starting a business may have been a dream for you but now you are turning it into a reality. With the economy stabilizing and lenders becoming more willing to offer start up loans it is the best time to get your business up and running. Rather than putting your entire life’s savings into your startup business, you can take out a fixed rate startup business loan.
A fixed rate startup business loan is a loan designed to help new businesses cover their begining expenses. These funds are often used to secure a property, purchase equipment, hire staff, purchase inventory, create advertisement and cover several months of operational expenses until the business starts generating revenue. This form of startup loan is desired by more new business owners as it has a fixed rate, ensuring that the interest will not skyrocket after a certain amount of time after obtaining the loan.
Since your business has not yet established a credit history you will be required to use your personal credit to receive loan approval. Before applying for a startup loan it is important to pull a copy of your credit report and review it carefully. You will want to dispute any inaccuracies and make all efforts to bump up your credit rating. If you have a low personal credit score and bad credit history it may be difficult to obtain a startup business loan.
Lenders may also require you to put up personal collateral such as your family home. This offers the lender a guarantee that the loan will be repaid, otherwise your home will be used to cover the total amount of the loan owed.
It is important to not jump on the first startup loan offer. Yes this is an exciting time but you need to think like a businessman and always look into all of your options. What seems like a great deal today could be beat by a better one tomorrow. You have been dreaming of starting your own business for years do not get too hasty and make a be financing decision. Take your time, shop around, do some research and always negotiate.
Chris Fuller went to the University of South Florida and has worked in the financial sector for over 20 years. He has extensive experience in all aspects of personal and small business lending, from personal loans, equipment finance to cash flow based solutions for small mom and pop businesses, and large corporations.
