Advertising
Advertising

7 Tips for Getting a Short-Term Loan for Your Business Startup

7 Tips for Getting a Short-Term Loan for Your Business Startup

Getting loans for small business startups is not an easy task, the reason being that startups are not eligible for loans from banks. But there are several other ways of financing your business. To find the most convenient means of funding a business, you will have to look under the rocks.

Here are some of the ways of getting good loans for startups.

1. Using retirement account (ROBS)

Rollover for Business Startups, known as ROBS, allows you to invest the funds from a retirement account without requiring you to pay any early withdrawal penalties. You do not have to pay income taxes either. With adequate professional help, you can use the retirement account for a new business. To utilize ROBS, it is essential that the company is set up as “C” corporation. If the company becomes successful and starts generating profits, then a portion of the money will go to your 401K, the amount of which is calculated according to the percentage of ownership. You can consult a ROB’s specialist to make the best of opportunity.

Advertising

2. Peer-to-Peer Loan

There are Peer-to-Peer websites which focus on offering personal loans for three to five years. The aim of the loan is to pay off the credit cards or debt consolidation. Personal loans can be used for starting a business.

The problem with this type of loan is that you will be eligible for it if you have good credit score. If your credit rating is not okay, then do not waste time trying to get this loan.

3. Conventional Bank Loans

The biggest advantage of these loans is that they have pretty low interest rates. The rates are low because there is no involvement of any federal agency. These loans can have a shorter time for payment as compared to the SBA loans. They can often include balloon payments. It can be a little difficult to get approved for the loan.

Advertising

4. Alternative lenders

For small business startups that lack strong financial history, the alternative lenders sound like a very attractive option. They mostly offer online applications. The decisions on approval are made in just hours, and the funding is provided within five days of the request.

The benefit of working with alternative lenders is that you have a chance to finance your business even without a strong financial background. There are a few limitations about the usage of the loan, but approval for the loan is instant. The drawback is that the interest rates can be higher as compared to the ones charged by banks.

5. Using credit cards for financing a startup business

It can be a cost-efficient method of paying for the startup. Several credit cards offer zero percent interest promos. During that period you can borrow money free of any interest. There are rewards and cashback programs. These programs allow you to earn money for your business by just charging the purchases of the card. Some cards allow you to make $500 by only signing up for the card and making a few purchases in the first few months.

Advertising

Business credit can be built by responsible use of the card. Credit cards are also sufficient for good debt consolidation tool. You can transfer balances and save money on interest by taking advantage of the zero percent interest.

The disadvantage of credit cards is that they are not a stable source of credit. The credit card companies have the right to lower the credit limit without any warning. The interest rates are high as compared to other sources of capital. Using personal credit cards for business can affect the individual credit card score.

6. Borrowing from acquaintances

Pitch your idea to your friends and family. If they like your idea, they will be willing to contribute some money for the startup. Remember to get the loan in writing so there is no misunderstanding later on.

Advertising

7. Use crowdfunding

You can focus on raising small amounts of money by involving a large number of people. This can be done by using a crowdfunding website. There are different ways of crowdfunding.

You can build a strong foundation of your startup by opting for any of these short-term loans. They will give your start up the boost it needs while giving your investment a security blanket as well.

Featured photo credit: reynermedia via flickr.com

More by this author

6 Reasons Why French Press Makes the Best Coffee 9 Things To Remember If You Love Someone Who Doesn’t Easily Show Affection 12 Ways To Earn More Money While You Have A Full-Time Job 7 Steps to Reduce Your Laptop’s Fan Noise & Increase Speed 7 Ideas To Decorate Your Home Using LED Strip Lights

Trending in Money

130 Fun Things You Can Do This Summer Without Spending Much 235 Real Ways to Actually Make Money Online 3How to Make Money with a Blog (According to 23 Successful Bloggers) 4This List of 50 Low-cost Hobbies Will Excite You 530 Fun Things To Do With Your Friends Without Spending Much

Read Next

Advertising
Advertising

Last Updated on August 15, 2018

30 Fun Things You Can Do This Summer Without Spending Much

30 Fun Things You Can Do This Summer Without Spending Much

Summertime can be a real strain on your wallet. The sun is out, there are people to see, places to be; it’s no wonder you might be short of funds during these sunny months. Not everything has to cost you an arm and a leg.

Take some time to go through this list of 20 cheap summer activities and make some realistic goals to complete as many as you can.

Video Summary

1. Visit a strawberry festival

Summer is prime time for tasting strawberries. More often than not, an area that grows strawberries will have a strawberry festival. Indulge yourself in strawberry pies, jams, cakes and more!

2. Have a picnic

Take your partner or your family to the local park and enjoy a relaxing picnic. Designate each person to bring one food item of their choice to add to the fun.

3. Camp in your back yard

    The summer heat can sometimes make it hard to sleep. Why not enjoy the heat outside in the yard? Pitch a tent or gaze into the night sky.

    4. Take long walks

    Discover something new where you live. Take the afternoon off from your chores and go for a long walk. You may be surprised by what you discover.

    5. Break a world record

    Breaking a world record doesn’t have to be time-consuming. You could even break one on your lunch hour. Give it a go!

    Advertising

    6. Go on a bike ride

    The number of bike paths on roads in big cities has increased dramatically over the years. Take advantage, and enjoy the summer breeze.

    7. Join a gym class

      The gym is not everyone’s idea of a good time, but why not go with a friend a join a class? Spinning, yoga and step classes are always more fun with friends, and a lot of gyms allow you to pay-as-you-go.

      8. Find a new hobby

      The summer is the perfect time to find a new hobby. Serotonin (our body’s natural “happy” hormone) is produced by the sunshine and will be at a yearly high, which is great for when we want to tackle something new.

      9. Join a sports team

      Not all sports teams are competitive and require huge amounts of your time. Join in the fun with like-minded people, get fit, stay healthy and make some friends along the way.

      10. Make a slip ‘n slide

        Gather your friends, some plastic sheeting, a hose, washing up liquid if desired, and make a huge slip ‘n slide just like these guys. Granted, yours won’t be as big, but you get the idea… it’s fun!

        11. Make a treasure hunt for your kids

        Today’s digital world sees our children more often than not playing inside than outside. Why not create a sense of adventure by making a treasure hunt? Only rule? It has to be outside.

        Advertising

        12. Visit a free festival

        Towns and cities are awash with free festivals, with themes from film to science. Scout your local area and discover something new.

        13. Visit the zoo

          Let’s face it: we love animals. While browsing news websites and social media networks you’re bound to come across a few pictures of cats. Take a trip to your local zoo for a better experience.

          14. Take a road trip

          Enjoy the open road with a few friends and take a road trip somewhere–anywhere. Just go out and enjoy the sunshine!

          15. Play ultimate frisbee in the park

            Frisbee is always great fun down the park, but why not turn it into more of a competitive sport by playing ultimate frisbee?

            16. Make your own ice cream

            Ice cream is a very versatile dessert. Make a sandwich, enjoy a cone, or simply just enjoy a bowl full. Better yet, making your own ice cream allows you to create any flavor you want.

            17. Invite your neighbors over for a BBQ

            Advertising

              When was the last time you invited your neighbors over? Do you even know them? Now’s your chance. Just ask each person to bring a food item so costs don’t mount up for you.

              18. Get a summer job

              For many students, summer is the time for relaxation and fun. But who said earning money and being productive isn’t fun? You only get out what you put into a situation.

              19. Attend a charity event

              Attending a charity event is a great way to raise funds and awareness for a cause, meet new people, and generally have a good time. Search for your local charity event today.

              20. Visit a national park

              National parks are a great way to explore nature and learn something new. You could even volunteer and make a difference in helping restore natural habitats.

              21. Visit your local comedy club

                Local comedy clubs are extremely underrated. They are cheap to attend and no doubt you’ll have a barrel of laughs.

                22. Make your own hammock

                  Hammocks are very relaxing, are perfect for summer afternoons and are surprisingly easy to make.

                  Advertising

                  23. Read in your new hammock

                  Now you have your very own hammock, the only thing left to do is enjoy it. Grab your favorite book and read to your heart’s content.

                  24. Watch a movie outside

                  Movies are great. Relaxing outside in the evening is great. Put them together and you’ve got a perfect combination. In D.C, Maryland and Virginia this summer, for example, you can enjoy a huge number of movies outside.

                  25. Take a hike

                    Hikes are a great way to keep fit and see more of Mother Nature. There are countless trails available for you to explore. Why not try some this summer?

                    26. Learn how to fly a kite

                    As a child, you probably had a kite and haven’t touched it since. Why not dust it off and attempt to fly it? It’s tricky, but well worth the challenge.

                    27. Work out at the park

                    American cities are full of parks with ample space for a work out session. No doubt you’ll be happier to work out in the sun rather than a crowded gym.

                    28. Take your dog to the beach

                      One of the many joys of owning a dog is taking him or her for long walks during the summertime. This joy is enhanced when visiting the beach, for both you and your dog.

                      29. Make a summer smoothie

                      Healthy, delicious and perfect for the summer. Not only that, there are countless recipes ready for you to try.

                      30. Attend a free yoga session at the beach

                      No experience needed and all skill levels are welcome. Take yourself and a buddy down to the beach and try some yoga. You’ve got nothing to lose!

                      Read Next