Start Up Loans – How They Can Help You?


With the business idea set for your start-up venture, you are now stuck at how to set it all into motion with the right funding. Now, when it comes to funding your start up, you have a ton of loan options, from small business loans to start-up business loan. So, naturally the question that comes up in your mind is what makes the latter better than the former? Or, even how can the start up loan be of any help to you? Forget one reason; what we have here is a list of five ways through which the start-up loans are what you need to get your business off the ground.

  1. Offer a low rate of interest

When you opt for a start-up business loan, one of the first things that come to your mind is how much the loan will cost you in the long run. Naturally, interest rates are a big issue, and low interest rates are a major plus. Interest rates for start-up loans are essentially kept low by most of the financial institutions.

 However, it depends on your credit score and whether or not your start up meets the criterions set by them. Unlike other kinds of loans, you will not see the interest rates for the start-up loans go up to double digits, which is a major advantage for the entrepreneurs. Of course, other loans become more expensive for many reasons. For instance, they might be making the money available to you instantly, or giving you the money without paying heed to your credit score. Regardless of the reason, when it comes to a long-term loan, the capital just does not get as cheap as a start-up loan.

  1. Easy availability of capital

Getting access to a small business capital can feel as like quite an uphill battle, and ever since recession has hit hard, the banks have become more reluctant about giving out loans. After all, risk is not really the favourite word of the banks. Thus, the start-up owners are really in a tough spot when it comes to getting the necessary funding. 

You will need to have access to different ways of financing businesses, and the emergence of alternative lenders have opened up a world of opportunities for that matter. A matchless benefit of the start-up loans is that they let you have access to the capital that you need. You can actually borrow a lump sum amount through the start-up loans, which might not have been possible other ways. 

  1. Terms of repayment

A start-up loan will not be the useful tool that it is expected to be if the terms of repayment makes you even more stressed than you were to begin with. So, it is important to not just make sure that you have the right business idea where it is worth investing the money, but also need to make sure that the terms of the loan are well-suited to bring in that cash flow. In this respect, one of the ways through which start-up loans can help you is by offering long repayment terms and the payment schedule that does not put a strain on the business. 

The small business loans usually have short repayment terms. For example, these loans have to be paid back in about three months, with provisions for weekly or daily payments. Even in other kinds of loans, you get a repayment period of about five years. However, most start up loans offer a lot of cushion in this regard. It usually has repayment periods like ten years for equipment loans, twenty-five for real estate, seven years for working capital loans, and so on. Thanks to this flexibility, you have enough time to figure out the ways to fit the loan payment into the growth plans of your business venture.

  1. The down payments

Depending on the nature of the funding that you need, the lender will ask for a down payment at times. These down payments for the start-up loans usually depend on the money that you borrow, your financial profile, and the purpose and type of loan. Remember that the relation between a higher down payment and a bad credit score is always direct. 

Although start-up loans are among the kind of business loans, which usually needs a down payment, it is generally lower than other kinds of loans. One of the biggest reasons to consider start-up loans is that you will require only ten to twenty per cent down payment in most cases, and some of the financial institutions do not even ask for a down payment! That makes it super easy for you, isn’t it? Well, there are financial institutions that even ask for thirty per cent down payment. But, you will just have to avoid getting into those kinds of loans.

  1. The flexibility on offer

There are certain business loans that come with too many strings attached in terms of how you are supposed to use the money. That is not always such a bad thing, truth to be told. After all, if you are going for invoice financing or equipment financing, then you are basically looking for funds for a specific purpose. But you will not always have such a specific need, and sometimes it is just a comprehensive reason to look for funds. Of course, you will always have a plan regarding what you want to do with that money. 

But, you can never be specific about the issues that can come up while you are making the business grow, and flexibility would surely be much welcomed in that case. With some of the start-up loan options, you can basically get funds for anything and everything your business needs. There are no specific limits set on what you are expected to do with the money.

With so many ways in which the start-up loans can come to your aid, why would you even consider other small business loans, right? So, apply for the start-up loans today and start your venture on the right footing. 

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