Entrepreneurship is exciting not only for experienced people but for young ones also. People choose becoming business owners by different reasons: some of them want to be financially independent, some have great ideas they would like to realize, others don’t want to have a boss and make decisions themselves.
There are many reasons, but getting a loan for your business is not that simple when you are young and don’t have enough experienced. On the other hand, there is good news: today young entrepreneurs really have a choice. Check out these great 5 ways to get business financing for young entrepreneurs!
Bonus: Check out our previous article to get to know about the basics of debt consolidation!
Needless to say, before getting a small business loan you should clearly know your options. There are many lending institutions that will not approve a loan application from a young person with a lack of professional experience and a low credit score. However, there are companies and lenders providing various options for people with no credit or low credit.
Personal Money Service company performs 3 types of business loans: small, unsecured and short-term business loans. For example, you can get small business loans online in a few simple steps and cover your business expenses almost with no hassle. In any case, to get a business loan on an early stage of business development, consider alternative loan providers.
Deferring Student Loans
If you can’t start a business because you need to make payments on your student loans, take advantage of the Student Startup Plan. Unfortunately, student loans create significant obstacles in a financial sense but there are ways to deal with it.
Student Startup Plan helps to lower student loan repayments and help those looking to start own business. Income-Based Repayment Plan (IBR) helps to keep your payments affordable and allows determining how much you can afford to pay on your federal student loans.
Crowdfunding is recently a new, but already a very popular way of getting money for your business. It helps to get the world acquainted with your idea and find those ready to invest in it!
There are various benefits of crowdfunding but on the other hand, there’s no guarantee that you’ll find the right people to invest in your project or you’ll not gather enough money. How to try?
Use one of the popular platforms, for example, KickStarter.com, tell people about your idea (but remember, you need a good story that would inspire others to help you) and if they like it, they will make donations.
Borrowing from Family and Friends
The most popular problem of young people is that they lack a strong credit history. Even if they know the things to include into a business loan application, they hardly can get business loans from traditional lending institutions because most of them only lend money to people with good or even excellent credit. However, you can always turn to your family or friends and ask to lend you startup funds.
In such a case, you can even avoid paying the interest, if you will agree that with your lenders. But treat such a loan like you took it in a bank, follow all the conditions you have agreed. If you’ll be irresponsible, you can ruin a good relationship and lose the trust of your friends or/and family members.
Peer-to-peer lending (P2P lending) has a lot in common with the crowdfunding. The difference is that crowdfunding means financing by a crowd and p2p lending focuses on individual financing.
With the help of P2P sites, you can determine how much you need to borrow, define the purpose of the loan and post your listing online. Make research to learn more because with p2p lending you can get a loan on reasonable terms and with quite low interest rate.
Don’t believe any myths about business loans! Getting one can be complicated when you are young, but nobody says it’s impossible! Try one of these options and make a way to your dream!