What can u tell me about business loans to start up a new business?
In the process of opening a new business. How do business loans work – I know I need a business plan etc before I can apply for a loan, but what’s some other info? What’s the interest rate range, what’s the range of how many yrs u can have the loan, range of amnt they can loan, will they include the first yrs lease amnt in the loan if needed…etc, etc?
We have good credit.
July 2nd, 2010 at 4:44 am
Hi There,
You don’t specify the amount you need, however, you are on the right track when you state you need a business plan.
One of the simplest methods of obtaining business credit, especially since your personal credit is good is to set up your business as a formal legal entity. By doing so, you position your business to obtain credit much easier, in fact, once you’ve done so, you can apply for an unsecured line of credit, (a credit card), which is the simplest form of business credit to obtain. The great thing about this approach is you leverage your good personal credit, but once you obtain the loan, it does not show on your personal credit report. (You must of course keep your payments current, but you are building your business credit – A real win-win!)
By the way, the best business credit card available is offered by ADVANTA, they like new businesses and they are offering 0% interest for your first 15 months, then a fixed rate of 7.99% thereafter…You won’t beat this with any bank offer!
You can learn more about the steps to starting your business, and applying for a business credit card at the links below.
Good Luck!
July 2nd, 2010 at 5:20 am
A true business credit card is a line of credit that is taken in the name of the business, under the business’ credit. Activity, whether good or bad, is reflected on your business’ credit report through D&B and other financial institutions, and the liability for any debts incurred and bills owed is with the business.
However, some companies out there offer “business” credit cards which they require a person guarantee for. These institutions will often ask for a personal guarantee, and will almost always ask for a social security number from the person applying for the card. If this is the case, the credit card is not a business credit card, but is simply a personal credit card which is used for the business. The business is not liable for bills and debts – you are.
When applying for a credit card for your business, watch out for areas asking for your SSN (and not your TaxID or EIN) and be wary of any credit card that asks for a personal guarantee. By ensuring that your credit card is in the name of your business, you can help to build your business’ credit, while avoiding creating problems with your own.
Many companies offer a list of credit cards that are issued under the business name only. Those lists typically run $300-$900, depending on the quality of the information inquiring. I would suggest starting your search online via google or yahoo. Search for “strong business credit” (just like that in quotes) to find services that sell the information.
Good luck,
Ilya Bodner
Small Business Owner
Initial Underwriting Group
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