A Quick Guide to Start Up Business Loans

What is a Start Up Business Loan?

As the name suggests, a start up business loan is type of loan used to help a business get started. Provided in a lump sum, the cash can be used for a variety of expenses needed to start a new business, such a buying stock and equipment, renting a business premises, or wages to hire staff.

Where can I get a start-up business loan?

Start up loans arenbt the easiest line of credit to secure. Traditional lenders such as banks often view a new business as too much of a risk, so a business looking to start up may need to look elsewhere for a loan.

However, it is possible to get a start up loan from a business lender. These loans are much the same as other business loans, where you agree a loan amount to be repaid, the cost of interest, and the fixed period in which the loan is to be repaid.

There are other options to secure a loan for a new business too, with local councils often providing small loans for new business start-ups – check your local government to see what you could apply for.

What do I need to get a start-up business loan?

Due to the risky nature of a new business, anyone seeking a start-up loan must prove to a lender they have viable business, which is typically demonstrated through an in-depth business plan.

A forecast for cash flow and revenue are some of the more important components of a business plan, so be sure to have this ready whenever applying for a business start-up loan.B Most start up business loans are only available to newly established organisations, usually set up within the last two years.