Start Up Loans | Government-backed borrowing | Tide Business (2024)

FAQs

Start Up Loans | Government-backed borrowing | Tide Business? ›

How Start Up Loans work. Start Up Loans are unsecured, personal loans. They're designed to provide finance and support to owners of new businesses who often struggle to access other forms of finance. Additional eligibility checks might be run when applying for partner products through Tide

Most startup business loans are available from online lenders that offer capital to borrowers with one year or less in operation. Although it may be more difficult for new businesses to qualify for traditional small-business loans, some bank and SBA lenders provide startup-friendly options.

Lenders want reassurance that you will repay what you borrow, and there's no way to gauge the risk of default if you haven't yet launched your business. Because of this, it can be difficult to obtain funding from a lender as a startup business, though it's not impossible.

Backed by the US Small Business Administration, SBA loans for startups are designed to help business owners grow their companies and cover expenses like equipment. There are several types of SBA loans with maximum amounts ranging from $50,000 to $5 million. SBA loans are backed by the US Small Business Administration.

There's no industry-wide credit score requirement for small business loans. Still, a higher credit score of 700 or above generally means you'll be eligible for funding with more attractive terms.

Yes, some lenders offer business loans for bad credit to startups with limited revenue. You'll likely need at least six months in business and a credit score of 600 to qualify. These options, however, may have higher interest rates and shorter repayment terms.

Some large, national banks like Bank of America, U.S. Bank and Wells Fargo offer certain loan options for companies with less than two years in business. In general, however, online and nonprofit lenders are more likely to offer startup business loans.

If you want your business to be one of the success stories, it's important to start your business strong. That can include ensuring you have enough funding and a steady source of cash flow to pay for costs like equipment, payroll, supplies and real estate. That's where applying for a startup business loan helps.

Is it easier to get business loan with LLC? ›

Yes, it can be easier to get an LLC loan. Some lenders won't lend to sole proprietors.

While you can get a fast business loan in as little as 24 hours, traditional business loans take longer. You can expect most business loans to take at least a week or longer to process and fund. If you're going for an SBA loan, you can expect the SBA loan process to take 30 to 90 days.

Because they're backed by the U.S. government, they're less risky for banks than issuing their own loans. But SBA loans are usually harder to get than online business loans, which may require less time in business and lend to borrowers with lower credit scores.

Loan amount

SBA 7(a) loans are available up to $5 million and SBA Express loans are available up to $500,000. SBA 504 loans are available up to $5.5 million.

Any member of an LLC can borrow money from it. However, if the LLC has other members, they must approve the loan and report their authorization in the LLC's minutes. An advance of funds to a member can only be considered a loan if the LLC creates a legally enforceable promissory note for the repayment of the loan.