Congratulations! You’re taking the steps to turn your business plan into a reality. Launching a business is a considerable undertaking, and while the idea itself is one of the most important parts, funding is another factor that plays a role in getting your business off the ground.
When it comes to funding, startup business loans are a strategic way to turn your dream into a reality. It’s important to know what lenders look at when they consider whether they jump onboard to give financially to your startup.
Here’s what influences a lender’s decision to provide a loan to your startup:
- Business Plan and Character.
Since your startup likely has no operating history, lenders will look heavily at your business plan and at you as a business owner. This includes your experience, character, skills, future vision, and of course a business plan that has a likelihood of success.
- Credit Score.
Your financial track record is important to whether lenders provide startup business loans because your startup business likely has little to no credit history.
- Ability to Repay the Loan.
Lenders, of course, want to know that they will be repaid, so they’ll look at your sources of actual income as well as the projected revenue of your startup to determine whether they’ll be able to successfully provide you with the loan.
- Collateral.
When considering repayment, lenders will look at collateral in the off chance you are unable to pay your loan. This can be business assets, vehicles, etc. The greater the value of the collateral, the lower risk for the lender.
- Skin in the Game.
While the whole point of a loan is that you’re not risking a massive amount of your own money, lenders do want to see that you’ve invested in your own business. This shows commitment and that you’re bought into the success of your startup as well.
We can help you move forward with startup business loans, so you can receive the funding you need to launch your startup business!