So, you’ve decided to make a go of starting your own business but aren’t sure exactly where to start, or maybe you’ve tried a few avenues and come back empty. Getting start-up loans isn’t as simple as just filling out an application and being approved. It’s a process that involves planning and execution if it is going to succeed. While they can’t guarantee that you’ll get a loan, thorough research and proper planning will make sure you have the best chance at getting the loan you want.
Step 1 – Decide Exactly the Kind of Business You Want
While this may sound like a no-brainer, it’s important to examine the type of business you want to go into before making any other plans. You may have always wanted to be a professional baker, but do you have the skills for it? Is your area already saturated with similar businesses?
Step 2 – Create a Business Plan
Perhaps the most important part of finding loans to start a business is the development of a business plan. A business plan is a well-researched and thorough document that outlines not only your business, but also the competition, and includes a comprehensive plan for your success and how you are going to pay back any loans you incur.
Step 3 – Contact the Small Business Administration
The Small Business Administration (SBA) has several federally-backed loan programs available for new businesses. You can get access to these loans through various lending institutions. SBA loans include:
- General Small Business Loans (7a) – the general SBA loan program that can be used for almost anything a business needs
- Microloans – small, short loans that can be used for equipment and other small financial needs, up to as much as $50,000 but traditionally much less
- CDC/ 504 Loan – used primarily for real estate purchases or rental costs
Step 4 – Do your Research
There are many lending institutions out there, but do your research before choosing one. Just because you have a local bank, it doesn’t mean that it’s the best one for your start-up loans.
Step 5 – Watch out for Pitfalls
Not every loan agreement is the same, and that can come back to haunt you. Watch out for end-of-term balloon payments and fluctuating interest rates that could make it difficult to pay back your start up loans.
Get started today. Call us at (713) 893-5759 or fill out our online form to begin the funding process.