First Time Business Loans

Financing For a New Business

Secured Financing

Secured financing is a good option for startup business financing simply because of the requirements of starting a business and the loan requirements of banks and lending institutions.

Starting a business takes money. It is just that simple and there is nothing unusual about it. There are scores of things that have to be bought, rented or produced in the beginning phase of any business. Bankers and other lending institutions understand this, so don't be concerned about discussing all the details, if asked.

Setting up a new business is somewhat similar to setting up housekeeping for a newly married couple. Since you're starting from scratch with no accumulated posessions, you have to buy everything for your new life.

When You Have a Startup Business:

Business startups are expensive and since you have no business history, the bank is going to want something to secure their loan to this new entity. For that requirement, you can use personal assets, real estate or anything of value that fits the lender’s requirements. They will tell you what they want. I remember starting my first computer software business by using my car as collateral for a loan to buy a computer and rent office space. The car title and a rudimentary business plan was all it took for our banker to say OK. Well, not quite all; the banker also wanted a personal guarantee, which you will find is standard procedure for almost any type of loan.

Why Choose The Secured Loan:

It is not surprising that most entrepreneurs prefer to apply for a secured loan rather than an unsecured one. Even large company owners take advantage of the lower rates by submitting their commercial assets as collateral for the loan. If you are a home based business owner or small business entrepreneur, you can certainly save more with a secured business loan.

Loans for Poor Credit

If Your Credit Needs Rebuilding:

A secured business loan can be an excellent way to bolster the credit rating of the business as well as that of the principal owner(s). Since there is very little risk on the part of the bank or lending institution, the loan should not be difficult to obtain. Once obtained, be very attentive to making the loan payments on time and it will turn out to be a win-win situation. The business will have the use of the borrowed funds for whatever the need is, plus the perfect opportunity to establish an on-time payment record. Never under estimate the value of a good credit rating. It makes all future financial dealings so much easier.

Loans for Good Credit

If Your Credit is Excellent:

If your credit is already established, you are in a great position to negotiate the best rate and terms. In that situation, you should take advantage of the fact that lenders will compete for your business by offering you their most competitive rates. Remember that this is the business they are in and you are the primary target of all their marketing efforts. Take your time and do not agree to any situation until you are comfortable and satisfied with the terms and conditions.

Money to Loan:

There are enough sources for funding that you should find one that is a good fit for your purposes and one that treats you like you want to be treated. You are the customer and the lending institution is in the business of providing a service. If you are qualified and have assets to use as collateral, they absolutely want your business. If that is not their attitude when dealing with you, then walk out the door and find another lender.