Even during times of a slow economy, it's possible to find various business funding options to start your work at home business. Commercial loans can be found at low interest rates and with many different options to suit your needs. This guide will take you through some of the options available to fund your business.
Option 1: Micro Loan
A micro loan is a type of small business loan which is allowed to be used for any business related purpose. It ranges in size from $5,000 to $35,000 and is granted only to new businesses. Individual lenders will have their own qualifications for this loan, including a business plan and special training, but in all cases, some form of collateral and the business' owner's personal guaranty is required. Micro loans may be paid back over a maximum of 6 years.
Option 2: Asset Based Loan
An asset based loan is a short term loan which is backed up by assets owned by the company as collateral. These assets may be inventory and equipment, real estate, etc. For a home business, the most likely assets would be equipment, inventory or accounts receivable. It is worth noting that asset based loans require the company to already have assets, and thus are not ideal to start a business with. However, they may be useful for expanding a business which has already been founded.
Option 3: Personal Loan
You might consider a personal loan as a way to finance a new business if you don't need the $5,000 offered as a micro loan minimum. Some personal loans can be used for any purpose - it doesn't matter to the lender, as long as the loan is repaid. Many different kinds of personal loans are available, and the requirements to qualify for one depend upon the lender and the amount of the loan you need.
How to Find Loans
Contacting local lenders, like various bank branches, is one of the easiest ways to find lenders willing to give you a loan. Once you've found lenders for the type of loan you want to procure, ask them each about their requirements as far as credit, terms and additional details. Make sure you fulfill everything necessary to get a loan before you apply for one. If you apply for a loan and are turned down, the next lender you apply to will be able to see your record of having been rejected and may reject you or give you less favorable terms based on that.
Micro loans and personal loans are both valid ways of procuring a loan to start up your at home business. Once your business is founded, an asset based loan may help you expand. By choosing one of these three loans, you can set up and improve your business with the tools it needs to succeed.
