Start Up Business Loans - How Do I Get One?

It may be the case that to make your dream of owning a company come true, you will need start up business loans. These loans can be obtained from banks and other financial institutions and are intended to help you on your way to achieving your goals. It is essential that you work out how much you are likely to need before you approach any financial institution.

The amount that will need to be borrowed will vary from business to business. Some larger companies may require more funding than smaller businesses, which only require a "shoestring budget" to get started. It is essential that you identify the start up costs that you will have during the first period of your business being developed.

Ongoing expenses that may be found during this period include liability and property insurance, utility bills and staff wages. There may also be one-time expenses such as decoration costs, sign making costs, attorney fees or the fees involved with the process of incorporating your business.

The expenses that you have should be broken down into two categories, namely overheads and variable expenses. Variable expenses usually relate to the costs associated with the direct sale of a product or service. Overhead covers things such as rent, utilities and administrative costs. It is best to make a list with the headings of the two types of expenses and work out from there how much you are likely to need.

It may be possible to "cut corners" by incorporating your company with a company formation agent. These companies can form and register your company for you and provide all the documents you need within a short space of time. This may save money as the costs are generally quite reasonable and certainly cheaper than the fees of an attorney.

Company formation agent companies are easily found via the internet. They may also offer special packages and bonuses; for example, they may provide you with a ready-to-go business bank account. In which case you may have a better chance of getting the start up business loan from the bank that has the business account the agent has provided you with.

Once you have this information you are ready to ask for start up business loans. The bank will ask you for a detailed business plan in order to decide whether they would be willing to lend you the cash. Your plan should detail how the money that they will lend you will be allocated and used in your company. If you have any experience of the trade you are about to enter, make sure that you mention this in the plan. This information will increase the chances of the bank or financial institution agreeing to the loan, as the risk of failure is diminished slightly.

Many start up business loans will have a fixed or variable rate, much like a mortgage. The institutions will assess which loan will be right for you and will discuss the repayments that you will need to make each month. With the right planning, details and figures it can be a simple process to get yourself ready to request start up business loans.