How to Get a Loan to Start a Small Business


Minyang Jiang

Launching a small business entails numerous expenses and requires copious funding to keep up with consumer demands. Between stocking the store, investing in equipment, hiring staff, and keeping your storefront in a polished state, businesses need, on average, $2,245 per month to survive. While commercial bank loans provide the most popular method of business funding, banks have become increasingly strict in recent years and deny applications for a plethora of reasons. Fortunately, there are alternative business loan options that can get your company the money it needs.

Acquiring a Business Cash Advance

The average startup cost of small businesses is $30,000, but it largely depends on the industry, location, and size of the business. Business cash advances can provide up to $500,000 in funding, enabling entrepreneurs to access all of the startup funds needed to launch their thriving enterprise. First-time business owners typically have the most difficulty when qualifying for loans, as they have yet to establish monthly revenue and have no business credit. Business cash advance lenders cater specifically to new entrepreneurs by making their financing incredibly easy to qualify for. No credit checks are conducted in the process and repayment terms are negotiated based on ability. Interest rates of business advances are considerably higher than other financing options, due to the elevated risk on behalf of the lender.

U.S. Small Business Administration (SBA) Loans

The SBA can help you attain all of the money needed to ensure the success of your new business. In addition to traditional business loans, they offer equipment and real estate loans, enabling you to access the critical funding to cover all major startup expenses. To qualify, your business needs to be based in the U.S. Collateral is needed to secure all of their loan types, so possessing considerable assets, such as a house or car, is imperative. Repayment terms are set at 5 years for business loans, 10 years for equipment loans, and 10 to 20 years for real estate loans.

How to Utilize Crowdfunding

Crowdfunding has been growing in popularity as of recently, due to providing business owners with a reliable and convenient method of raising mass startup costs. There are no eligibility requirements, and the amount of money you raise is entirely contingent on the persuasiveness of your business plan. By pitching your idea to millions of online users, you can convince people from all over the world to invest in your idea, promising them premium access to your products as soon as they are released. This provides a loan option at no interest and repayment terms that you are at liberty to determine. However, you need to ensure you can supply the products to investors within the allotted timeline, which may be challenging for brand new businesses.

Eight in ten businesses eventually close, and to ensure your new startup has the highest potential for success, sourcing ample investment capital is essential. While many first-time business owners fail to qualify for commercial bank loans, there are numerous other lenders eager to invest in your company’s future. Whether you’re in need of real estate, equipment, marketing costs, or staff, there are small business loans available to cover all of your business needs. For modern business funding solutions, contact Credibly.