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Starting a Business? Here's How to Get the Loan You Need

It can be tricky to secure a loan for a new business or a startup. Fortunately, there are some funding alternatives.

Starting a business can be an exciting and fulfilling venture, but it requires significant financial investment. One of the most common questions that new entrepreneurs ask is whether they can obtain a loan to fund their startup. The answer is yes, but getting approved for a loan as a new business owner may pose some challenges. According to Small Business Administration (SBA), only about 50% of small businesses survive beyond five years due to various reasons such as insufficient capital or poor credit history. These factors make lenders hesitant in approving loans for startups with no proven track record.

However, there are still several options available for aspiring entrepreneurs looking to secure financing for their startup ventures. For example, SBA offers funding programs specifically designed for small businesses that have been operating for less than two years; these include micro-loans and Community Advantage Loans which offer up to $250K in funds at reasonable interest rates.

In addition, alternative lenders like online lending platforms also provide unsecured loans based on personal credit score and other factors besides time in business or revenue generation. Crowdfunding campaigns are another popular option where individuals pool money together through online platforms like Kickstarter or Indiegogo.

To increase your chances of approval when applying for a loan as a new entrepreneur, you should prepare well by having clear goals and milestones outlined in your business plan along with accurate financial projections showing how much money you need and how soon you will repay the loan amount borrowed.

In conclusion, while being granted loans as a new business owner may seem daunting at first glance due to lack of experience or financial history, there are still viable options available if one takes the time to research them properly. With proper preparation and research into all available funding sources including traditional banks/non-bank lenders alike, entrepreneurs will find themselves better positioned towards achieving long-term success with their startups.

Sencha can help you with your business financing journey through our AI-based engine. If you’re considering another type of financing, let us help you weigh your options.

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