Start up financing is essential to the success of your business.
Start up financing comes in a variety of forms for businesses. There are a variety of financing options including standard business bank loans, unsecured lines of credit like business credit cards, vendor lines of credit, account receivable factoring, venture capital, angel investors, and more. All businesses know that start up financing is vital to their present and future success.
Businesses use start up financing for a variety of options including purchasing new business hardware, paying for necessary services like Internet or phone services, buying top of the line software, buying software, or simply just to have extra working capital to use until sales are up enough where expenses equal the profits.
The most common method for obtaining this form of financing is through a bank loan. The Small Business Administration, SBA, offers a “MicroLoan” to all businesses. This loan gives businesses funds of up to $35,000 to use on initial start up or expansion expenses. You can get larger loans from a regular bank if needed. In order to obtain these loans it is so important that a business has established their business credit scores. This means that your business is not using personal credit from the owner’s social security number to obtain business loans.
A good way to start obtaining business credit scores is to establish a 1-3-5. This means 1 small bank loan, 3 business credit cards, and 5 vendor lines of credit. If all of these are reporting your payment history to the Small Business Financial Exchange, you will be well on your way to obtaining business credit scores that can help your business get financed.