When you are planning to venture into new business and start-up company, you are a new entrepreneur and you need the financing to make your dream business off the ground, how will you do that? The easiest answer is to apply for an entrepreneur loan. But at times traditional banks might not grant you the loan and the private financial institutions might charge you an exorbitant interest for the loan since you do not have the credit history.
While some people often get the capital from personal savings, family, and friends, some also get angel investors or secure the money from crowdfunding. But not all can go that way and need to secure the money from traditional ways. If you are one of those who needs to get the entrepreneur loan in a traditional way but lacks the credit history, here is 3 ways in which you can qualify for the loan.
1. Equipment Financing
With equipment financing you can also receive the tax benefit, i.e. the interest fees that you will pay for the loan will get deducted from your taxes. A wide range of equipment can be purchased with this loan.
Generally, an interest rate between 8 and 30 percent is offered for equipment financing with equal monthly payments.
2. Business Credit Card
A business credit card can be a source of continued access to funding. With the lender providing you with a maximum limit that you use for purchasing your products for business. While this lowers your available credit limit once you make the payment the credit limit goes up.
A business credit card also helps you in improves credit score in the market when you make payments in the proper time and keep your outstanding balance low.
In case you are unable to get a business credit card then opt for a secured credit card. For this kind of card you have to deposit some security cash for your line of credit, generally, it is 90 percent of the total credit. Once you start using it and the repayments are on time then you can transfer it to a proper credit card.
3. Building A Credit Line
This is an unconventional way to build up a credit line but to be able to apply and secure for an entrepreneur loan soon this one of the ways to go. In this, you get in touch with a financial institute and with their help apply for multiple credit cards at once. On getting approval your business credit line is higher and you have a better chance of getting entrepreneur loan approval.
With these three tricks, you can start your business and build your credit score so that you can apply for entrepreneur loan and get approved from traditional banks.