Great Startup Loans All in One Spot

Yes, even brand-new businesses are eligible for loans. However, some people find applying for a traditional business loan from a bank to be a difficult process. Applying for a personal loan or a business credit card may be easier. Just be sure your personal credit is in good shape to ensure you get the best rates possible.

If you go to a bank for a business loan, you may be expected to provide a business plan, annual financial statements and collateral. That can be a tall order for a startup. Instead, consider getting a personal loan which will have fewer underwriting requirements and may be more accessible for new owners.

That depends on where you go to get your loan. Bank business loans and SBA-backed loans may have stringent requirements for applicants. Personal loans tend to have an easier application process, although the amount you can receive may be limited based on your personal income and credit score.

Yes, and generally speaking, you can deduct the interest paid on a personal loan from your business taxes. This is only true, though, if the personal loan is used for business purposes. If you take out a personal loan and use half for business and half for a vacation, only half the interest can be deducted. Talk to a tax professional for guidance on your specific situation.

As with any debt, you need to be sure you can pay back what you borrow. With a personal loan, even if the business goes under, you’ll still be obligated to pay back the outstanding balance. So carefully consider your financial situation and the chances of your business succeeding before committing to a personal loan.

It depends on the lender. Some will extend loans to borrowers with fair credit and scores around 600. Others will prefer to lend money to people with good credit scores of at least 670 or greater. However, you can expect that the higher your score, the more likely you are to not only be approved but also to receive a favorable interest rate.

Most lenders give you 30 days before payments on a personal loan begin. After that, you’ll have fixed monthly payments based on the amount you borrow, your interest rate and the repayment term.

Every lender has its own guidelines, but generally speaking, you might not be able to get a personal loan if you have the following:

• No credit history
• Late payments or delinquent accounts on your credit report
• Low income or unstable employment
• High debt balances compared to your income
• Missing documentation

Getting a personal loan for a business startup doesn’t have to be a long or difficult process. It usually requires only the following five steps.

1. Decide how much money you need: With a personal loan, you may need to request a certain loan amount. Calculate how much you need to get your business up and running until you can reasonably cover expenses with revenue. If you need help determining that amount, you may be able to meet with a free business mentor through SCORE, a program supported by the SBA.

2. Check your credit report: Since you are taking out a personal loan, your personal credit score will determine whether you are approved and how much interest you pay. Before applying, check your credit report for free using the official website AnnualCreditReport.com. If you see any incorrect information that could be reducing your credit score, dispute it before applying for a personal loan.

3. Compare lending options: Next, decide where you will apply. Many banks and credit unions offer personal loans, or you could apply online. AmONE makes it easy to apply and receive targeted loan offers that are a match for your lending profile.

4. Gather documentation: Once you know where you will apply, save time by gathering documents in advance. You should expect to provide your Social Security number, proof of identity and proof of income. Some lenders may also want to see your business plan.

Starting a business is exciting, but it can also be expensive. That doesn’t mean you can’t follow your dreams just because you have a limited budget though. There are a number of funding options for new businesses, and you just need to find the right one for your needs.

Here’s a look at some of your choices and their pros and cons.

Personal loan
If you need to borrow money to start a business, a personal loan is one of the easiest ways to do it. These loans can be used for a variety of purposes, and the application process is relatively quick and straightforward.
Personal loans typically come with fixed interest rates and a set repayment schedule that can make budgeting simple. They are ideal if you know exactly how much you need to cover your start-up costs. On the other hand, if you need a significant amount of money or aren’t sure how much you’ll spend, other lending options might be better.

Business credit card
A business credit card provides flexibility beyond what is offered by a loan. Once approved for a business credit card, you have access to a line of credit that can be used when and how you want. That makes this a good choice for those who aren’t sure how much they will need for their start-up costs.
The downside to a business credit card is that the interest rate will likely be more than what you would pay on a loan. Plus, credit cards come with variable rates that can increase at any time. What’s more, if you think a business credit card will mean your personal credit won’t be checked, think again. Most card issuers will still pull your personal credit report when reviewing a business credit card application.

Small Business Administration loan
The federal Small Business Administration offers a variety of resources for small business owners, including SBA-backed loans. Loan amounts can range from several hundred to several million dollars, and the SBA offers them through three programs:

7(a) loans: This is the SBA’s most common loan program and often the best choice if start-up costs will include the purchase of real estate.

504 loans: These loans are designed to finance major purchases of fixed assets needed for job creation and business growth.

Microloans: Loans of up to $50,000 are available through this program, and the SBA says the average loan amount is $13,000.
SBA-backed loans can be a good option for businesses that need larger loans for property and equipment. Microloans are more accessible to small start-ups, but the application process is more involved than applying for a personal loan or credit card. Many small business start-ups may also find they aren’t eligible if they haven’t already invested some of their own equity.

Self-finance
Some small business owners choose to self-finance their startup. That means they use their own assets to pay business expenses. Even if your bank account isn’t flush with money, you may be able to self-finance by taking out a loan from your 401(k) account or permanent life insurance policy.
Self-financing is the easiest way to fund a start-up since you don’t need worry that your credit score isn’t high enough or that your application will be rejected. However, using personal assets doesn’t come without risk. For instance, pulling money from a 401(k) account could mean less money to retire on in the future.

Investor
It’s not uncommon to hear stories of start-ups, particularly those in Silicon Valley, raising millions of dollars from venture capitalists and angel investors. However, if you want to raise money this way, you need to have a truly unique idea.
Most venture capitalists are looking to put their money in businesses they think will be the next big thing – and by big thing, think Twitter or Facebook or Uber. To attract their attention, you need a compelling idea, a solid business plan and the right connections.