The term startup loan refers to a group of loan products available to business owners during the initial stages of growth. Whether you’re in the first year of business or you’re finally making the switch from weekend warrior to full-time startup CEO, these startup options can help you acquire the funding you need to grow.
Angel investors aren’t the only avenue to funding a startup. Women only received 2% of venture capital (VC) funding in 2019. While there are VCs who prioritize funding female-helmed startups, they require you to give up equity in exchange for capital.
Business loans provide a better alternative to both of these solutions. Through online lending marketplaces, women can be more likely to secure funding, solving problem number 1. A business loan requires no equity, so you can maintain control of your business and control its growth trajectory. Boom, problem 2 solved.
These loan options best match the needs and qualifications of a startup.
If you don’t already have a business credit card, you should probably consider one. You can qualify for a business credit card as a brand new business. They allow you to use your everyday purchases to earn rewards and build business credit. On top of their everyday uses, business credit cards can be used as a flexible form of financing for a startup. If you need to make a larger purchase, you might want to open a business credit card with 0% introductory APR. With the proper research, you can use a business credit card in the same capacity as you might use a microloan for your business.
SBA loans are the gold-standard of business loans. The Small Business Administration (SBA) guarantees a portion of the loan, which lessens the risk for lenders, and therefore, they’re open to funding more borrowers. SBA loans come with fantastic rates and terms. The flip side is that SBA loans can be more competitive than other small business loans, and they require a small-to-medium mountain of paperwork.
The bright side? We hear all the time about how women are less likely to apply for something—like a job—unless they know they have every single qualification. With an SBA loan, you can use that statistic in your favor. Use that over-qualification to your advantage and apply for an SBA loan with persistence, perseverance, and a heaping of patience (this loan type takes a while to get funded).
It’s funding when you need it with no obligation to use it when you don’t. A line of credit allows you to borrow from a predetermined amount. You can borrow as much of the total as you’d like, as often as you’d like. Because of its intense flexibility, a line of credit is ideal for a startup. Your financing can ebb and flow with the same flexibility that your business needs have, which means you’re ready no matter what comes your way.
An ACH loan, also referred to as a cash flow loan, provides just that: cash to increase your working capital. ACH loan decisions are based on the average daily balance of your bank account, rather than based on credit, so ACH loans are an option if you have less-than-stellar credit or haven’t been in business for very long. Loan amounts tend to be on the smaller side, and you’ll see higher rates with ACH loans—but a loan in the hand is worth 2 in the bush. That’s how the saying goes, right?
Apply for a loan through Lendio, and you just need to complete a single 15-minute application to gain access to every loan option from our network of 75+ lenders. No application-spreading here. Once you complete the application, we pair you with a funding manager, your personal business finance expert, who will help you weigh each loan option to decide which one is right for your startup.
Take 15 minutes to take control of your company’s financial future. Apply now.