subject: Tips When Looking For A Low Cost Business Start-up Loan [print this page] If you dream of starting your own business, don't let the challenge of financing discourage you from making that dream come true. Many successful business owners today have been able to take the first step through the help of business loans.
Below is a list of the different business start-up loans you can choose fromavailable in the market. Let us also tackle the steps you can do to increase your chance of getting approved for the business financing you seek.
Secured or Unsecured Business Loan
You can choose between a secured business loan and an unsecured business loan, whichever is more practical for your situation. For business owners who own a property, a secured start-up business loan is recommended since this comes with lower rates and more flexible terms. You can also obtain a higher loan amount because your debt is secured by the property you submitted.
On the other hand, if you are in the position to provide collateral, you may opt to apply for an unsecured business. Although the available loan amount may be limited and you may have to pay higher interest rate, unsecured business financing will still give you the chance you need to start up a business.
Start Up Business Loans and Personal Credit
One important factor that you should prepare for before applying for a start-up business loan is to raise your personal credit score. Since you are about to start up the business, you have yet to build corporate credit. Needless to say, a lender would be more confident to provide financing if your personal credit history shows that you are a responsible borrower.
Are you aware of your credit standing? Order a copy of your credit report from the three major credit bureaus. Carefully check your credit report for errors which can hurt your score. Once you have found incorrect or inaccurate information, the next step is to inform the issuing credit bureau about it by writing a dispute letter and send it through registered post mail. Always submit your payments on time and avoid exceeding your personal credit lines.
Having an excellent credit standing will not only improve your chance of approval but also enable you to get lower interest rates. This is why it is recommended that you check your credit report at least six months in advance before submitting your business loan application.
Check Prerequisites of the Business Loan
As a start up business, you will also be required to submit your business plan. This important document must clearly define the structure of your business as well as your company's mission and vision. It should also contain results of the marketing studies that you have conducted including your target market and advertising strategies that you plan to implement.
Spend time creating your business plan, paying special attention to the smallest details. Of course, you must present a well-prepared business plan in order to convince your lender that you are worthy to be given the financing you seek. .
Copyright (c) 2010 Irish Taylor
by: Irish Taylor
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