Examine the main sources of financing startups operating in the United States. Among the most common ways to raise capital are personal savings, friends and family, venture capital , startup business loans and angel investors, according to data provided by the Fundable crowdfunding platform.
Although these options are proven to grow your business, not all entrepreneurs can do that. This means that they have to access funding through more traditional means.
The problem is that startups often do not have enough business history and loans to get profitable loans from banks. If you find yourself in such a situation, do not panic. Special startup business loan can meet your needs and goals.
Here are some outstanding starter credit products and requirements that you must meet to be eligible:
- Financing equipment.
Equipment financing is a loan that allows you to buy new equipment for your business, using it as a guarantee.
There are many benefits to financing equipment, including:
In accordance with Article 179 of the IRS Code, interest and other financing charges can often be deducted from your taxes. You can also use equipment depreciation as a tax deduction.
You do not have to wait to find extra money. That means you can buy the most up-to-date equipment, from computers to industrial ovens and heavy equipment, and start using it to grow your business right now, by directing the income received from equipment to pay off the loan.
Since you use the equipment itself as collateral, lenders are more willing to provide financing for new businesses. Less documentation is needed in relation to term loans.
Currently, the financing equipment qualification generally requires a credit rating of over 600, an annual income of $ 100,000 and 11 months of activity or more. If you are a beginner, you will probably need a higher credit rating to be approved by most lenders – usually at least 680.
- Commercial credit cards.
Like a personal credit card, a business credit card gives you access to a revolving loan. That’s when the lender gives you the maximum credit limit. By using a credit card, you make purchases, which reduces the credit limit available. When you make a payment, the credit limit is reinstated. This gives you constant access to capital.
In addition to providing continuous access to funds, the use of a business credit card has many other benefits, such as:
Possibility to build a commercial loan. Make timely payments and keep the balance as low as possible. Your business loan will improve and, over time, you will be able to benefit from more profitable financial products.
Separation of personal and commercial finances. This allows you to more effectively manage your business budget and avoid confusion with Uncle Sam during the next tax season.
More efficient financial management Most corporate credit card companies offer customers powerful financial tools to track expenses, engaging in a lot of manual work in accounting. You can even control how employees spend money on their business.
Precious rewards. First, many business credit cards offer advantageous registration bonuses. In addition, by continuing to spend money with the card, you benefit even more: cash back, free airline tickets and discounts on your company’s products.
The opportunity to save. Some cards offer a 0% introductory APR for up to 12 months. This gives you the opportunity to finance your business operations without financial costs if you return the total amount at the end of the period.
The requirements for commercial credit cards vary by product and by company. The best rewards, premiums for APR subscriptions and introductory offers, of course, go to those with a high credit rating. The good news is that there are other reliable cards if your personal credit rating is lower, including those that offer cash back.
Bitx Funding 