How to Find a Start-Up Business Loan

Finding a start-up business loan can be a daunting task. Start-up business loans provide financial capital used to help create a business from scratch or in its early stages. Start-up business loans are similar to personal loans because the requestor’s financial history plays a critical role in the approval process. There are variables, such as business risk, that go into being approved for a start-up business loan. Generally, these types of loans can be difficult to obtain but not impossible. However, it is wise to explore all possible resources, due to the difficulty of being approved.


When looking for a start-up business loan, it is important to understand how much it will actually cost to get the business venture off the ground. In determining the financial needs, you, as the business owner, need to look at the risk associated with the business, economic factors and what stage the business is in. These variables make a difference in estimating the needs of your business. Equally important is making sure that the business plan reflects these needs. Remember, as an entrepreneur, you are making a presentation on behalf of your business. Making up a figure will not lead to receiving the necessary financial backing. The dollar amount should match what is outlined in the business plan. By doing so, it will show an understanding of how the business will operate and how funding will help. Preparation is key to getting a start-up business loan. Other items that need to be considered are financial statements (if the business is in an early and/or transitional stage), collateral, the ability to repay, personal investment and credit history.


Once a solid plan is in place, it is time to locate financial backing. A good place to start is your local bank or credit union. Starting with your personal bank is good because there is an established history. The history may prove to be beneficial in terms of interest rates and any up-front costs associated with the loan. A second resource is the local chapter of the Small Business Association (SBA). The SBA works to provide resources for small business owners or those looking to start up a business. The SBA even has loan programs of its own for which start-up businesses may be eligible. A third resource is angel investors. Angel investors can range from family to strangers. Angel investors are persons who are willing to make a financial investment into a risky business. Locating angel investors requires researching and networking. The Internet can be a starting point in finding potential investors.

The Process

Finding a start-up business loan will require patience. It may require several tries before you obtain the financing needed to get a business started. There are several resources available to make a business happen. Being prepared by having a solid business plan, a solid working team, a personal investment and patience will go a long way in making a dream a reality.