If you are looking for business loans for startup companies, you will benefit greatly from learning more about the options that you have with these funding vehicles. Before you apply for these loans, there are some things that you should be aware of, factors that can help you improve your odds of getting approved from the start.
Bear in mind that there are two types of business loans for startup companies that you will want to consider: conventional loans, which can be more difficult to get approved for, and business lines of credit, which tend to be more lucrative and usually have an easier approval process.
So how do you know which one is right for you? We’ll take a look at four things that you should consider before you send in your formal application.
Your Business History
The one thing that you will want to bear in mind when considering any business loan is your business history. Since a startup won’t have an established history, many banks will be reluctant to lend you funds based upon your business credit or transaction history, as you won’t have any to show. This does not mean that you can’t get approved. What it does mean is that you will have to use your personal credit rating, which means that your good credit could be on the hook if your business fails.
Your FICO Score
For new businesses, your FICO score is one of the most important factors to your approval odds. Since your business is new, and since it does not have an established history (banks usually want to see at least a six-month history), you’ll have to use your established personal credit instead. As a good rule of thumb, a bank wants to see a FICO score of 700 or better to consider you. If you have bad marks on your credit, you should consider using a credit restoration service first so you can improve your odds of approval.
Conventional Startup Loans
Conventional startup loans for businesses can be difficult to get because banks like to see at least six months of history. If you do get approved for them, you’ll want to have a business plan prepared, a profit and loss prediction readied and established business credit. Usually, interest rates are higher on these types of loans because the risk to the lender is increased.
Business Lines Of Credit
At New Business Funders, we know that your new business is your brainchild. That’s why we’ve partnered with a growing network of lenders that say yes when other banks say no. With just a FICO of 700 or better, we can get you approved for low interest business lines of credit that you can use as you see fit. Got damaged credit? Our experts can help you restore your credit rating in just 30 days. Ask us how.
Get approved for the loan and line of credit you need today, from $10k to $250k the easy way. Call us at: 1-855-680-FICO (3426).