Start Up Business Loans

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When starting a business you are definitely going to need some sort of start up capital.  In many cases, business owners and entrepreneurs have a little bit of money and a vision and that's about it.  The little bit of money you have however, may not be enough to do what you are looking to do with your new business.  So how are you going to go about receiving the funds you need as a start up business with no business credit history whatsoever?

Do not try to borrower too much money too fast when starting your business

There are quite a few common mistakes business owners and entrepreneurs make when they first start their business regarding their finances.  One common mistake is thinking that you can be approved for a unsecured or even a secured business loan as a brand new start up business.  Just like your personal credit score and applying for a personal credit card or car loan, your business must have credit history in order for a bank to approve you for a business loan, business credit card, or business line of credit.

You want to start building your business credit history as soon as you can so you can apply for unsecured business lending in the future

Start building your business credit history now

There are however, ways to be approved for a business loan as a start up without having any kind of business credit history.  No matter whether you are a business that has been in business for twenty years or you are a start up, before you walk into a bank and apply for a business loan you must be prepared.  As a start up business each bank is going to ask for:

- A well written business plan

- At least two years personal tax returns

- At least two years of personal financial statements

- Proof that you own your business

- All supporting documents the bank requests

Depending on your situation you might want to think about a secured CD business loan.  This is where you take the money you have and place that money into a CD account.  The bank will then give you a one to one business loan on that CD.  So if you put in $10,000 into a CD, the bank will give you a $10,000 business loan.  This isn't technically a business loan but will get you started on building good business credit scores for your company which in turn will allow you to be approved for unsecured business lending in the future. 

SBA loans are also a good source for start up business loans but take quite awhile to be approved for.

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