The Bad News About Start Up Business LoansFirst thing you need to know is it is extremely hard to find a start-up Loan for a business, because the banks do not want to lose their money. A start up business loan is considered a personal loan by most banks. Therefore they need to know your pay back plan. It is said that 80 percent of all businesses fail within the first two years. Therefore the bank would not want to risk their investment on failing projects, so it is advisable to personally fund yourself.

Start Up Business Loan Sources

The bank is a primary source to acquire a loan. Depending with what type of loan you want; you should be able to choose the type of bank suited for it. Usually building societies offer loans to people who want to start businesses, however if you want to get a different type of loan it is better to use your local bank.

Common sources

They are three common sources for a loan which are more advisable. These are the three “F’s; namely friends, family and fools. The first two are very common however the last one (fools) requires some bit of effort. These people are not really fools; they are just people who are more willing than the banks to take risks on start-up business loans.

Small business administrative

Later you can approach your local small business administrative. This is basically any organisation in your area tasked to help small businesses and other companies succeed. They can help you with non-finance related service. They are a good start in order to launch your business successfully.

Writing a business proposal

This is usually the tricky part when acquiring a loan. A business proposal is an important document if you want to get a loan. It should be motivating and moving. One mistake people make in a business plan is to include a lot of errors. You should never miscalculate figures in a business plan. This enables you to impress the bank.

Writing an application for your loan

Writing an application for a loan is quite a challenge if you really want to impress the bank. You should firstly make sure all of the required documents are included in your application. This should be documents such as bank statements, previous credit history, identity documents, police clearance and proof of assets owned.

Choosing a bank for your business

All businesses should work in relations with banks. So it is of immense importance to know which bank to work with. Firstly it is preferable to work with banks that do not have a high commission rate. You may choose the bank which offered you the loan to start your business.

Paying back loan plan.

You should remember that you started your business using a loan so remember to devise a plan to pay the bank its money back. As soon as your business starts working properly then it is time to start paying back.

Beware 

Always be cautious of loan barons who pretend to be good and offer you loans in order to rob you of your property. Keep a keen eye also for scams which are on the internet that will pretend to offer you loans online. Never try and acquire a loan online!