Published on August 8th, 2017 | by Jose Vasquez0
How a Startup Tech Company Can Get Its First Loan
This is the best way to get your startup tech company its first loan.
All businesses need money. Most businesses will need a loan. If you’re unable to get funding, if you can’t fund the business yourself, and if you can’t get by on the bare minimum, a business loan is going to be your best option to keep the business moving forward.
But how can you get a loan if you’ve never had one before? Don’t worry—the process is simpler than you think.
Understand Your Needs
First, make an assessment of your needs. How much money do you really need, right now? What are you going to use that money for? Don’t apply for a loan in excess of what you need—not only will banks scrutinize your plans for the cash, you will also run the risk of spending the money irresponsibly if you aren’t adequately prepared. Do your research, and make accurate estimates before you even apply.
Explore Your Options
Next, consider what type of business loan you want. Installment loans are the most common, with monthly installments covering principal and interest, but balloon loans—where you only pay interest, then pay the entire principal at the end of the loan period—are a viable alternative. You’ll also need to consider terms and interest rates.
Improve Your Credit or Financial Standing
If your business doesn’t have much credit of its own, you may have to improve your personal credit to increase your chances of winning the loan. You can do this by paying down your debts, paying your bills on time, and limiting the number of open accounts you have.
Find a Lender and Negotiate
Next, you’ll need to select a lender—and for the sake of improving your chances of success, I suggest pursuing a lender where you already have some kind of account. Then, you’ll need to negotiate the terms and conditions. Fight for a lower interest rate if you can!
There’s no “right” or “wrong” business loan to pursue, but you’ll need to weigh your options carefully if you want to make the best decision for your startup. This guide should get you started on the right track.