Some startups may find it difficult to qualify for an unsecured line of credit. Here are a few other options that may be available to startups.
Business Credit Cards
Business credit cards can provide new business owners with needed access to cash. They can also be an important tool to help business owners separate their personal finances from their business finances. Credit card issuers will generally review things like your personal credit score and income. Some options may require collateral or a personal guarantee.
SBA Microloans
The U.S. Small Business Administration (SBA) has a microloan program that offers loans up to $50,000 to certain eligible small businesses. These small business microloans can be used to finance things like working capital, inventory, furniture, and machinery or equipment. Other SBA loans may also provide eligible small businesses with funding to meet their needs.
Crowdfunding
There are a variety of crowdfunding platforms online that allow business owners to raise money to support their business. There are a few different types of crowdfunding, but in general, this process allows crowdfunders to raise money for their project without taking on additional debt. For a more detailed look at crowdfunding, take a look at 1800BizFund’s Comprehensive Guide.
Equipment Financing
Equipment financing may be helpful for businesses that are in need of new or used equipment. With this type of loan, the equipment generally acts as collateral, which can mean that lending requirements may be less strict than for unsecured loans.
Depending on the lender, potential borrowers may be able to finance up to 100% of the cost of the equipment. There are also options that may allow you to either lease or loan.