Startup business loans
Startup business loans becoming more available
New business owners looking for startup business loans knows it’s been all but impossible to get credit since fall 2008, when Lehman Brothers crashed and burned. There are, however, signs that things are getting better, and several things would-be borrowers can do to improve their chances of getting startup business loans.
The Small Business Administration (SBA) processed 12,393 loans in the final quarter of 2009, a total of $3.8 billion; that’s a 200% increase over the number of loans processed in the same period of 2008. While the SBA only guarantees loans, the increase means lenders are again willing to make loans, including startup business loans.
That’s the good news; the bad news is that the final quarter numbers from 2009 are still only 60% of the numbers from the same period in 2007. In other words, things are better, but still very competitive, and acquiring startup business loans is going to be a lot of work and require a lot of investment.
- First off, banks will turn a cold shoulder to applications for small business startups if the owners haven’t already invested everything they have: personal real estate, savings, life insurance and credit cards.
- Scrape together money wherever possible. Young entrepreneurs have opportunities to participate in student competitions with cash prizes. Award winners impress bankers who would rather make startup business loans to winners.
- It might be painful to take on partners, but doing so brings more assets and talents to the table, while reducing risk. And remember, banks want to see a lot personal asset investment before they’ll commit to startup business loans.
- Business plans have to be magnificent and accompanied by polished and professional presentations and personal pleas.
- Start small, startup business loans aren’t awarded to businesses without track records. Wait until the revenues have accumulated to show stability and promise.