Are you applying for funding of start-up? Here is what to remember

The search for funding sources is becoming increasingly challenging in today’s economic climate. You might be a young entrepreneur or at a juncture in life where you require financial assistance to initiate the next phase of your business venture. However, be it an expansion of assets, getting start-up funds or holding on to your hard-earned money, as the current state of affairs stands, it has become very tough to secure funding.

You can consider for financial aid through personal loans which are brought to you by MetaBank or FinWise bank services.  Personal loans and money lending is usually subject to a review of the criteria of loan repayment history and creditworthiness of the individual applying for loans. Entrepreneurs are starting young, and examples of individuals starting successful business ventures while still being at college are numerous. Matt Mullenwegand Mark Zuckerberg, creators of WordPress and Facebook respectively, are some of the noteworthy mentions.

If you are worried about how to get funding for your start-up venture the following are some of the critical points you need to keep in mind;

In the United States, there are around 29.6 million small businesses according to the SBA (Small Business Administration). The fact of the matter is it is the small businesses that make up around 99% of all the business in America. Any small business contributes towards strengthening of the economy as well as making the entrepreneur free to make his life’s choices and achieve personal goals.

SBA start-up funding:

The SBA usually does not allow for loan options directly. However, it can partner with various lending companies. The partner company has to abide by the guidelines laid by SBA. The stipulations are in a way that it will reduce the risk for the lender thereby making it easier for an individual to qualify for start-up funding. These usually have a low down payment option along with competitive loan rates. SBA officials are also available for counseling and providing educational information that will help a young entrepreneur in deciding the requirement and the salient features for such a funding source.

Non-profit microloans:

It is an excellent moneylending option for starting small-scale businesses. The microloans can range from $500 – $50,000 and are generally short-term with low-interest rates. Many non-profit microloan providing organizations also provide financial literacy programs and business model training along with free marketing strategy support. Microloans are an easy, beneficial method of building the business credit for a start-up.

Equity crowdfunding:

Businesses and start-ups in the early stages of development can also go for equity crowdfunding. In such a case, the loan owner agrees to part with a share in the company in exchange for the funding. As an entrepreneur, you have the right to set the terms and the investor browses through the portfolio and an agreement is reached. Equity crowdfunding usually works because investors have to take more risks since they won’t be able to realize gains if the business isn’t successful.

Business credit cards:

A report published by the states that about 80% of all business ventures apply for credit cards. Card owners can request for low or 0% APR during the introductory phase along with cash advance. The business credit cards help with the funding of office equipment, advertising, and inventory purchases.

Rollover start-up:

Retirement funds amounting to $50,000 is required to take advantage of the ROBS (Rollover Business start-up) program. This method is highly useful for individuals looking to avoid debt at the initiation of a business venture. You require an accountant and attorney since the ROBS program involves a lot of paperwork and government approvals.

Personal loans:

If as an entrepreneur or an individual your credit score is higher or equal to 580 then you can get yourself approved for personal loans. The funding is made available within 24 hours of approval. However, you must keep in mind that through the personal loan option it becomes increasingly difficult to separate personal finances from expenditure for the venture.


Grants are probably the most favored method of funding for an entrepreneur because they do not have to pay it back. Grants though might come with regulations and stipulations that the loan owner needs to abide by and follow.

Home equity:

It is another type of loan where one can get the financing through their assets, namely the home. It is easier to obtain for an individual with low credit scores as compared to a small business or personal loan. The only downside of this method is that if your venture does not succeed you will end up with the foreclosure of your property.

Equipment financing:

Various companies and organizations help an entrepreneur with the funding for the logistics and equipment required in case of a start-up. You can borrow amounts of up to $250,000 for a period of up to 6 years. The loan amount is usually approved and credited within 24 hours.

How to apply for the financing?

Having a business plan:

The first step is always about having a business plan and model that will work. A detailed business plan will help the lender decide on the chance of success for the venture. You as an entrepreneur also need to carefully consider the risks associated and the expenses that might be incurred during the venture. Careful planning leads to the better pitching of the plan to the lender and increases the chance of getting that loan approved. Besides, you must also consider a proposal for repayment of the loan within the stipulated time with respect to the expected growth.

Credit score:

Having an excellent credit score always helps. The credit score is a marker of the entrepreneurs’ or individual’s integrity, character and willingness to meet deadlines and stipulated regulations. An excellent credit score will also lower the rates of interest for you. There are various online credit score rating agencies, and it is advisable that you get yours checked and in case of any inaccuracies get them corrected before applying for personal loans.


Banks, financial institutions and third-party money lenders tend to gauge your assets before approval of a personal loan. You need to establish the fact that a portion of the start-up cost can and is being funded by you. It saves you the loan repayment cost and the model will be appealing to the lender. According to the SBA, an individual needs to list around 30% start-up equity from the personal funds.

If you are thinking about starting your own company or turning that nurtured idea into a successful business, you are talented. Do not waste your talent. Combine the traditional modes of obtaining funds with some of the alternative methods and watch your dream take flight.

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