Last updated on December 1st, 2017 at 01:29 am -
Hey guys Sean Mory here for another session of LenCred Credit Geek Q&A. Joined by once again Dustin Weitzell, our top funding advisor for the year of 2015. We are going to answer a question today on small business loans I believe. How to get a small business loan for startup? Great question, I believe it is from Jamie for Michigan. Simple put the way I can answer that best is to get a loan for your small business startup, more often then not the best option is going to be to go and get an SBA loan. With that 10 to 30 percent money down usually so if you are looking for $100,000 you will need at least 10 to 30 thousand dollars in cash. Through a 401k or money under the mattress or what ever it maybe, then they are going to want collateral. probably 100% collateral on what ever amount you are borrowing. Could be before during or after they are going to need that. But then more importantly, that process can take anywhere from 30 days to 6 months. That is how you can go about getting a small business loan.
The way I would answer that is if you can not qualify for that or you are not blessed with a bunch of cash in the bank or a bunch of assets in collateral. Or you want to keep your marriage and you do not want to pledge your house and all those things. Make sure you keep the wife or husband happy. There are other options would you not agree? I was just reviewing one of our whitepapers, 16 Best Business Financing Options for Your Small Business. Out of those only about 5 of those are really loan type products. They are rolling over your 401k, going after actual traditional loan or SBA, which like you said approves for .0002% of small businesses in America. Although it is what all banks try to get you, you are not going to qualify for those.
Which leads us to when clients ask us I see you guys do a lot of lines of credit financing for startups. Not because we do not do all those other financing options, but lines of credit is the only financing you qualify for. That is their (Banks, SBA, etc.) criteria that we are going by, so if you do not have collateral, you do not have down payment money, there are other options. It is all about figuring out do I need a loan or do I need money to get my business started? Lines of credit are revolving so if you get the right types of credit and you pay it off, like we spoke about in our other video, lines of credit are awesome. They just have a bad stigma attached to them because they can be a form of credit card financing. It is about what you need, what you can get, and when to get it. Then the SBA door opens up a little bit easier once you get your business credit established.
Well Jamie we hope that answers your question, hopes that helps everyone else out there. Keep them coming and thank you for joining us for another session of LenCred Credit Geeks Q&A.