Where Can You Find a Business Start Up Loan?

• Experienced People

  Whether you plan to make a go of it alone or have a partner, surrounding yourself with a number of experienced individuals is key to making any potential loan provider feel confident that there is already a history of success behind your company. Hire trusted colleagues in your field as advisers or even bring them in as a major component of your operational team. Most loan providers or investors want to see your financial history from your last three years' of tax returns, both personal and business. If you don't have any business financial history, it might be better to find people who believe in your idea and have those numbers to show.

• Start-Up Loan Sources

  1. Banks are the largest supplier of loans but also the most difficult to get a loan from if you are just starting out as a business. Try community banks first or the bank with which you have an established relationship. They will look at your personal credit history, business history, ability to repay the loan and the feasibility of your business, according to Onlinemerchantnetwork.com, a site operated by Paypal for business merchants. You will need to personally guarantee the payback of the loan and most likely be required to put up some kind of collateral, such as personal assets. 2. The Small Business Administration (SBA) is an independent agency of the Executive Branch of the Federal Government. It administers three separate loan programs administered through their SBA partners. They back loans with a guaranty that eliminates some of the risk to the lending partners, thereby increasing the likelihood that you will be approved. To find out how their various programs work, visit SBA.gov. 3. If you need less than $35,000, you might want to consider a micro-loan. The members of Association for Enterprise Opportunity make micro-credit available to local business owners, including loans specifically targeted at low-income, women, minority, young and rural entrepreneurs. 4. Venture capital is a type of investment typically reserved for companies that have an expectation of high-growth with the potential of developing into a large enterprise. It is not so much a loan as it is a cash investment given in return for significant shares in a company. If your business is oriented towards high technology with expectations of exponential growth at some point in the future, you might want to consider browsing through the list of venture capital firms of the National Venture Capital Association. 5. Angel investors are similar to venture capitalists except they invest their own money instead of that of the VC firm. Angel Capital Association is a professional alliance of angel groups. Gobignetwork.com is a leading company that connects angel investors with individuals seeking start-up capital. 6. ] If you are just starting out and have limited financial resources, your only option might be to convince your friends and family to give you a personal loan. This is obviously treading in dangerous waters so make sure your business idea is near fail proof. Consider making them part owners or shareholders in your company so they feel like they are more than passive investors. But if total loss of their loan would serious damage your personal relationship with them, you might want to consider just getting a second job to save up the capital yourself.

References & Resources

• U.S. Small Business Administration
• Association for Enterprise Opportunity
• National Venture Capital Association
• Palo Alto Software
• Angel Capital Association
• Go Big network