I recently started my landscaping company, registered it and wrote out a who’s 25 page business plan. Now I’m seeking capital but most lenders are telling me 2 things, 1: my business has not been established long enough to get a loan, 2: the business hasn’t generated any revenue. And due to these reasons they can not provide me with a loan. I’m wondering if anyone knows of some lenders that lend to fresh start ups? The loan would be going towards buying equipment for the most part, small portion towards marketing/advertising. I have had no luck with finding a lender:(
The most common ways to fund a start-up business is self-funding, venture funding, or a business loan.
In your case, venture funding would involve raising money from angel investors such as family and friends.
You could raise all or some of the total project cost.
However, in exchange for the money, angels will want a portion of ownership in the company, and, therefore, a share of profits.
If you don’t want to give up ownership and share profits, you could attempt to obtain a bank loan.
Issue here is meeting lender’s criteria. This includes loan amount, collateral, net worth, ownership/management experience, and so forth.
Unless you have long standing relationship with local bank or credit union, SBA loan program may be your best bet.
Here, you might qualify for micro-loan (less than $50K). However, even a micro loan has requirements for collateral and personal guarantee.
Collateral is a borrower’s pledge of specific asset to a lender to secure repayment of a loan.