Starting a business can be really exciting, but it can also be incredibly expensive. No matter what type of business you start, you will need capital to get it off the ground, and the thought of securing funding can be stressful. Luckily, there are plenty of ways to fund your business.
How to Get Financing for a Business
The most common way to fund a business is to apply for a traditional loan. A traditional loan is usually offered by banks and credit unions, and it is based on your credit score and income. For those with a low credit score or an unreliable work history, a traditional loan can be hard to secure.
If you are investing in property, consolidating debt, building working capital, or refinancing, you may be interested in a stated income loan. A stated income loan is different from a traditional loan because lenders look towards the value of the property instead of your credit history. These loans have a fixed rate for up to 25 years, require work documentation, and require a credit score of at least 600.
Merchant cash advances are another way to fund your small business. If you are already making sales, some lending places, such as Aspen Commercial Lending, allow business owners to borrow against their credit card sales. The benefits of a merchant cash advance are that the money is yours to spend any way you want, you can receive funds quickly, no credit check is required, and the loan is easy to repay.
Finally, you can also apply for a business line of credit. If you are just getting started or if your business generates less than $1 million in revenue, a line of credit may be best for you. Even if your company has no established income, you can still qualify for a line of credit between $25,000 and $150,000.
Starting a business is a rewarding endeavor, but funding a business can be difficult. The most common way to fund a new business is through a traditional loan. However, if a traditional loan doesn’t fit your requirements, you can also try a stated income loan, a merchant cash advance, or a business line of credit.