Many start-ups don’t see their operations beyond the second year due to the high cost of starting and running their operations. In fact, only 48% of small businesses overall have their financing needs met according to Fundera.com.
Most small business owners consider loans instead of grants like an smb startup grant because of the many restrictions associated with applying and qualifying for smb startup grants. SMB startup grants and small business start-up grants are difficult to get. On the other hand, start-up loans are more easily obtained. Here are some of the advantages of receiving a start-up loan.
Money to Start Your Business
Starting a business comes with lots of initial expenses. Inventory, real estate, payroll, hiring expenses, marketing costs, and equipment are all common initial expenses for start-up businesses.
While some business owners are able to borrow money from their savings or put expenses on a credit card, sometimes this is not enough to get your business off the ground. Luckily, receiving a start-up loan will give you the money you need to start your business and cover your initial expenses.
Stay In Control of Your Business
To finance their initial expenses, some business owners consider investor financing. But, with investor financing, the investor may ask for a share of equity in your company or even have the power to make decisions about your business. To stay in control of your business without investors, start-up loans are a great option.
Build Your Business Credit
You may already have a great credit score, but that does not mean your business does. While having a high personal credit score is important to show the lender you are responsible, you’ll need to build your business’ credit.
One of the most popular ways to build your business credit is by taking out a start-up loan. Your business may eventually need much company loans in the future, so taking a smaller start-up loan and paying it back in full and on time will increase your chance of being approved for a larger business loan in the future.