Most businesses of varying sizes will need to borrow money at some point in their history. This is sometimes because of a lack of cash flow, a bad trading quarter, or simply because they need to invest money back into their business. When your business is well-established, you shouldn’t have trouble accessing financing, as long as you have a suitable business plan. But what if you are just starting out? Are there still ways to get financing without a long trading history?
Unsecured loans are an option
Small, new businesses don’t tend to have many assets, especially not expensive things like property or land. So, getting secured loans might not be an option for them. However, there are unsecured business loans available that aren’t tied to assets, so even new and small businesses may be eligible to take them out. It’s worth going to a broker, as you have the best possible chance of getting accepted by a lender, and can get the lowest possible APR.
Consider using savings
Another option is to essentially ‘lend’ yourself the money from your savings. In some ways, this can work, as it means you don’t pay interest, but there are a lot of drawbacks:
- You can end up without a financial cushion, so any emergency can put you in debt
- You may not make your money back, there’s always a risk attached
- You risk losing sight of the line between personal ad business
However, some business owners have funded projects successfully, so if you think it’ll work for you, it might be worth a try. You should make sure you have a plan to pay yourself back. Just because you aren’t paying interest, doesn’t mean your payments should take forever, so make sure you put a plan in place.
Grants are sometimes available
Depending on where you live, you may find that there’s financing or even grants available for small businesses. Some countries tend to really encourage small business enterprises, and if you’re lucky enough to live somewhere where entrepreneurs are encouraged, then it’s worth looking into the grants or other support available. Like if you’re planning to start a business in Singapore then you should also try to ask if there are current business grants in Singapore so that you can start your business in no time. You usually have to fill in an application, but this usually isn’t a long process.
When you first start out, it may feel like there’s not much available in the way of help or support for you. However, even the smallest businesses can access financial support such as loans, you simply need to look in the right place for them.