New Business Start Up Loans - 5 Things To Watch Out For

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Stephen Pierce
When most people think about starting a new business, the first thing they think of, once they start trying to make it a reality, is getting the money to start it up. While some small businesses can actually be started out of their hip pocket, most of the time more money is needed from somewhere. This means finding the resources to get some kind of a loan to get started. But figuring out how new business start up loans can be acquired can be very confusing. That means you've got to watch out for several things as you're going through the process.

Here are a few things you need to watch for as you start looking into new business start up loans:

1. Make sure you're looking at getting the right kind of loan. There are micro loans up to $35,000, franchise loans for someone wanting to start a new franchise like a McDonald's, standard SBA (Small Business Administration) loans which are bank loans guaranteed by the SBA, development loans for major fixed assets like lands and buildings and import/export loan for import/export companies.

2. To cut down the hassle factor, make sure your credit scores and the credit scores of any partners that will own more than 20% of the business is good. Scores above 680 are required by most sources of funding.

3. Have a well designed business plan. Not only will this require the premise for the business, but multiple projections based on verifiable statistical sources.

4. Check with lenders to see what will be required to get the loan you need. Knowing this ahead of time means when you sit down with the lenders to get the loan you don't have to interrupt the process to take care of an issue.

5. When it comes to getting the funds you need, make sure you get enough. One main reason new businesses fail is because they are undercapitalized.

With the government pushing to have more small businesses start up, since small businesses makes up the backbone of the American economy, new business start up loans are available. Making sure you've dotted all your I's and crossed all your T's means your chances of getting the loan you need to bring your dream business into existence are actually very good. See how much you'll need to start up your business, check out the loans that are available and what's required to get them. Then go make your dream into a reality. You'll be glad you did.