New Business Loans for Start ups
For most business owners getting a new business loan can be a drawn out process, however getting the money needed for projects and purchases is a good feeling. New business loans allow businesses to continue business as usual, preventing any financial tie ups. Often times an unsecured business loan is available to anyone with high personal credit. Every business has their own financing needs, before going further it is important to evaluate your businesses loan needs. All money received on the loan must be repaid, it is important to only borrow what the business truly needs.
Common uses for new business loans
- Equipment Purchases
- Property Purchases
- Meet payroll agreements
- Meet vendor payment agreements
- Working capital for the business
What is a new business loan?
A new business loan is a type of loan provided to a business by a bank or another type of lending institution. The borrowing business agrees to repay the money borrowed from the lender with a predetermined interest rate within a predetermined amount of time. On average a new business loan have an interest rate of 2.75% above prime and a loan term of 3 years, depending on the amount of the loan. The interest rate and other terms of the loan are determined by the banks credit rating. For those businesses with good credit ratings, they are most likely eligible for unsecured business loans, meaning no collateral or cosigner is needed. Businesses with less than perfect credit ratings are often required to put up some form of collateral such as real estate or equipment, or even use a cosigner to secure the loan; this protects the lenders investment in the business.
How to get a new business loan
First, you need to determine what your businesses loan needs are.
Second, you need to shop around with lenders to ensure your business is getting the best rates.
Third, you need to make sure that your business meets the lenders requirements
Fourth, you need to submit an application with any business information required
Fifth, you need to start the negotiation process to get the best terms and conditions on the loan.
Lastly, you need to sign the contract and set up a repayment schedule that works for your business.