In today’s ARTICLE, we’ll discuss “How to start a Business Without Money” as well as three loan choices for folks who want to start a business.
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The good news is that none of these choices require a business plan, and you may apply for all three at the same time to secure the maximum loan amount.
First and foremost, you must ensure that you have a strong credit score before applying for any form of financing as a startup. Unless you’re ready to use the equity in your house as collateral, your credit score is the most important factor for any company looking for a loan. You must have a credit score of at least 680.
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- The number 1 option is the Term Loan
You don’t even need a business to apply for this option. Your credit score and salary are the most important criteria. A credit score of at least 680 is required. You must also submit proof of income. W2s, tax returns, and pay stubs are examples of documents that can be used as proof of income. You may be eligible for up to $300,000 in funding.
If you don’t have a decent credit score, you can use a co-signer using this option. A co-signer is a friend or relative who has a 680 or higher credit score and agrees to sign your application.
- The second loan option will be the Business Line of credit
This is a wonderful choice for those who do not have any proof of income. When applying for a business line of credit, you must have a registered business. In addition, you must have a decent credit score. At least 680+ You may be eligible for a company line of credit of up to $150,000.
Applying for Equipment Financing is another possibility. Equipment finance loans are one of the most popular loan options for business owners that need to purchase equipment. It may be a truck if you want to start a trucking business, a printer if you want to establish a publishing business, or an excavator if you want to start a construction business. In most cases, this form of loan comes with borrowers-friendly repayment conditions.
External collateral is not required for these loans because the equipment itself serves as collateral. This means that if you default on your loan, the bank can seize your property; as a result, these types of loans are often easier to secure because the lender has a safety net in place.
A startup can acquire up to $50000 in funding, whereas established enterprises can get much more. The majority of equipment finance loans need a down payment of 10% to 20% of the equipment cost.
So there you have it, the three financing choices you can employ to fund any new business initiative. The good news is that you can apply for all three alternatives at the same time to acquire the largest loan available.