Add, remove & assign phone numbers on demand
Manage, respond to, and share calls with your team
Send & receive any message you need to
Keep contact details in one place with a shared phonebook
For on-the-go teams to share messages, calls, and contacts
A great idea alone does not make a startup. Any business needs resources and crucial support in the initial stages when there’s usually very little revenue. In other words, it needs funding. For entrepreneurs, getting a startup business loan could be vital to their survival and success.
Founders who carefully write their business plans should also be aware of any requirements and eligibility for getting a startup business loan. How to start up a business is only half the story.
The more important part is how to keep it running and take it to the next level. That’s where startup business loans come in.
A startup business loan is intended to help a business start, continue or expand its operations. As the entrepreneur or founder, you would get a lump sum amount that you would have to pay back over a period of time with a fixed rate of interest.
While you can start up a business with any loan, the categorisation of startup business loans makes it easier for entrepreneurs who may find it difficult to access traditional financing options.
A startup business loan isn’t fundamentally different from the usual business loans. Both involve a financial institution or the government extending funds to businesses. But two important aspects make startup business loans different from others:
Open to those with no experience: Startups, by definition, don’t have an operational history. This would make it difficult to get traditional loans as lending institutions would prefer to deal with firms with experience getting products and services to the market.
No need for securities: Startup business loans are personal loans to support your business. So if it’s a low amount, entrepreneurs thinking about getting a startup business loan won’t have to provide any of their assets such as their house as security.
Both government-funded institutions and private banks provide startup business loans in the UK. The Start Up Loans Company is one such entity that provides loans to startups and is funded by the government.
Their loans range from £500 to £25,000. These startup business loans don’t require any collateral. The repayment period is from one to five years and you’ll have to pay an interest rate that’s fixed at 6 per cent.
The ease of getting a startup business loan would depend on the following factors:
The potential of your business idea
The strength of your business proposal
Whether you’ve invested your funds into the business
Your credit history
Your experience running a business
The work experience and expertise of your team members
Once you decide whether to go with the Start Up Loans Company or a private loan provider, you should follow these steps while applying for a startup business loan:
Write a compelling business plan. It should have details about your idea, market opportunity, competition, value proposition, your experience and details about your team members (if any).
Understand how much money you need. You shouldn’t be underfunded after you receive the loan. You also should not take a loan that’s bigger than your needs, which will increase your payments.
Get all the financial documents. These would include your operational expenses, the amount you might have invested and your credit history.
Share the repayment plan. This is the part that your lender will be most interested in. Structure your plan to pay back over the given period. Be specific and confident but also be realistic.
Mention any security. You might not need any security if it’s for a low amount. But for higher amounts, private banks would be more confident if you offer security against the loan.
A startup business loan is right for you if you’re confident about your business idea, its ability to generate revenue and know precisely what you plan to do with the funds.
It’s not a good idea if you don’t get the amount you need, are not sure how you will pay back or have run out of all other lines of credit.
Both the government and private lenders would offer loans if they have confidence in the business model and the entrepreneur behind it. While it’s never ‘easy’ to get a startup business loan, if you can convince the loan provider that both you and your business are credible and reliable, you stand every chance of receiving funding.
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