All business owners, who look for small business loans for startups, should consider Rollover As Business Startups (ROBS). You can withdraw money from your retirement account to fund a startup without paying withdrawing penalties and income taxes. This isn’t a loan but the process will cost you $5,000 in setup fees and $1,500 per year as monitoring fees. This option is available for “C” type companies.
- Homeowners with certain equity can consider Home Equity Line of Credit (HEL, HELOC) to fund their startup. If you choose home equity loan, you can get money immediately but home equity line of credit tends to be lower (interest rates (that you pay on the balance you currently have) and upfront costs are more affordable.
- You can also apply to Personal Loan from a Peer-to-Peer Site. These websites help to match possible lenders according to the requirements and creditworthiness of the borrowers. You can expect 5-26% interest rate. There you can ask about unsecured business loans for a startup.
- You can also launch Small Business Credit Card while looking for the best small business loans for startups. They stand out because of 0% APR introductory periods and valuable cashback or rewards programs. Average interest rate is usually 16%. Credit cards can include an annual fee of $50-150.
- If you need to purchase equipment and machinery for your startup, you can apply for equipment financing. Equipment dealers, banks, and online providers offer this option. APRs are as low as 5%.
For people, who search for business loans for startups with bad credit, it would be reasonable to consider two reasonable programs from the Small Business Administration (SBA): the Community Advantage Program and the Microloan Program. They both finance startups.
P.S.: Avoid mistakes as a startup!