What is a Startup Business Loan?

Startup business loans are a financing option designed specifically for new businesses with goals of rapid expansion.

If you’re a startup business that needs an extra cash injection to really take-off, then a startup business loan may be right for you.

There are a number of reasons why a startup would seek finance, as well as loan options available. 

Startup Business vs Small Business

A startup business is not a regular small business and as such, is treated differently when it comes to financing options.

Startup businesses are brand new businesses that are focused on growth. Often setting rapid growth targets while developing their business from the ground up. Startups are a high-risk/high-reward business model.

Small businesses know their place in the community and are a more conservative, often locally focussed business model that focuses on steady growth over a longer period of time.

Do Banks Give Startup Business Loans?

While traditional banks do offer small business loans, they are a little more reluctant to think outside the box and take the added risk of a high growth startup.

The inability to provide evidence of cash flow and annual turnover often forces startups to have to look for alternative options when it comes to seeking a startup business loan.

Alternative funding options include:

• Online lenders
• Alternative lenders
• Angel investments
• Credit cards 

Can you get a Startup Business Loan for an Online Business?

Online startup businesses such as those in the eCommerce industry, face the exact same financial needs as their more traditional brick and mortar counterparts.

You’ll find that online and alternative lenders will usually have no problems lending to an online business, as long as they pass their initial screening process.

They can be delivered as a one off payment or as a line of credit, depending on your goals as a business.