
Principles of Building Business Credit
Having access to the best business funding options may rely on your business credit. Here’s how you can build good business credit.
The two main ingredients are your good idea and capital. But, if you’re new to the business world and don’t have access to capital from a trust fund or personal savings account, you’ll likely need to look to outside sources for financial assistance.
Many people may opt for a loan to start out, but for some, a loan may not be a viable choice. In this case, knowing how to fund a small business without a loan simply begins with some education about your funding options and best practices to minimize expenses.
When you’re just starting a business, there are many challenges you may face for loan approval. These are some of the most common reasons why your small business loan could be declined in the early stages:
Before we jump into all your funding options, let’s talk about some best practices to keep costs low when you’re just getting ramped up.
The Bare Necessities
Don’t go big, go home. That’s right – when you’re just getting your idea off the ground, don’t commit to expenses that aren’t necessary for the time being.
If you can, choose to work out of your home before signing an office lease or renting a co-working space. Leverage marketing tactics like social media that can begin as free and grow into a part of a larger marketing budget.
More Ways to Minimize Costs
Here’s a list of ideas to help you minimize costs when you’re building your business:
If you’re at the point where you’ve kept costs low and even reinvested your profit, but you are still in need of fast funding, then, congratulations! You’re one step closer to achieving your dream.
If your small business loan has been declined, don’t worry. 2020 is an especially precarious time for small businesses to obtain loans. On the bright side, there are many small business funding options to choose from, including:
Remember that no matter what kind of funding you receive, no money is completely free. You should evaluate your risks, especially of not being able to pay back the amount you have borrowed. It’s also important to understand the interest rates (or equity) which is your cost of borrowing from any of these sources.
Lack of funding tends to be one of the most common reasons why new businesses fail. With the various amounts of funding methods available to you, it would undoubtedly be a shame to give up for this reason.
To choose the right funding method for you, start by evaluating your needs and assessing the amount of funding you’re seeking. Be sure to consider timelines and any promises you’ve made to customers. Then, apply for the funding method that makes the most sense for your business model.
No matter what you do, do not give up! Your business has the potential to change the world.
Having access to the best business funding options may rely on your business credit. Here’s how you can build good business credit.