SEOClerks

10 Ways to Fund Your Startup: Traditional Lenders & Bridge Loans



Enter a reason for deleting this comment

10 Ways to Fund Your Startup: Traditional Lenders & Bridge Loans

Hello all. And welcome to part 3 of my series for 10 Ways to Fund Your Startup. As you may know, if you're someone that has a great startup idea for a business, it can be hard going trying to find the funds for it to get it started up. So I've been doing a series of posts that reveals 10+ ways and things you can do to raise some funds for it. To get your startup idea, started up! 10 Ways to Fund Your Startup: Traditional Lenders & Bridge Loans

And so far I've talked about using the power of the crowd and and using crowdfunding to help you, from Equity Crowdfunding to Donation Based Crowdfunding. And on Bootstrapping too. Of which, is basically just using the funding you have access to. And that will be the basis for today's guide. For when it comes to getting access to funding, we can turn to Traditional Lenders, banks etc.

10 Ways to Fund Your Startup: Traditional Lenders

Bank Loans

10 Ways to Fund Your Startup: Traditional Lenders & Bridge Loans
Your own bank might be just and only what your startup idea needs to get it started up. And most banks want to help their customers business ideas get off the ground and be successful as that means they'll make money through you. And so, going to your bank and asking them for a loan might just be the most viable option there is for you. You should schedule an appointment to speak to an adviser, bring along your business plan and model, as well as a thorough understanding of the risks involved. Not to mention, you'll likely need a good credit rating. But if your pitch is solid and you do have a good credit rating, the chances are high that your bank will loan you enough money to get your business off to a flying start!

Tips:
  • Banks are lenders and not investors, your business will need to be established enough so you can show a regular revenue income stream to them so they will lend you it in the first place.
  • Banks are like shops in that you can shop around for the best deal. It's not necessarily your own bank that can lend money to you so shop around for the best deal for one that will.
Bridge Loans
10 Ways to Fund Your Startup: Traditional Lenders & Bridge Loans
Bridge loans are a little different to a standard bank loan. It's more of a short term loan that can boost your bank account balance until you can secure enough funds to get your business up and running and earning some revenue for a set period of time. Usually this is for about 3 to 6 months but they can be for longer. The only catch is the longer time you have to pay it back, the more you usually have to pay back. Bridge loans can help you keep going until such a time when you think and believe you'll be making enough revenue to be fully self-sufficient.

Tips:
  • Bridge loans carry high fees with them so be prepared to pay back more than you borrowed to insure the high risk nature of the loan they're giving to you.
  • A bridge loan should be something you look into only if you're not able to get a traditional loan due to the high fees of them.
Conclusion
I know these current ideas in part 3 of this series are something you've already considered. And that's partly why I wanted to do another series on 25+ fun and creative fundraising ideas too! But they are very viable options and for a lot of people have been all they needed without needing to do anything else to try and raise the funds. Plus I hope that from what I've told you about them they will help you to make a better, smarter, more guided decision on whether or not it's right for you! 10 Ways to Fund Your Startup: Traditional Lenders & Bridge Loans

In the next part of this series, I'll be talking about using Angel Investors and introduce you to Incubators too (not not those things they put premature babies in), to Venture Capitalists. You'll learn about what they are and how they can help your startup idea get started up! 10 Ways to Fund Your Startup: Traditional Lenders & Bridge Loans

Question Time.

Have you ever used a bank loan or bridge loan to fund your start up idea?

Was it all you ever needed to get it off the ground and off to a flying start? 10 Ways to Fund Your Startup: Traditional Lenders & Bridge Loans

Comments

Please login or sign up to leave a comment

Join
vinaya

I funded my brick and mortar business from bank loan. I also have online business however funding online business through traditional bank loan is not possible in my home country. I used my reserve to cut funds to start online business. sadly, both of my business are not doing well. Every months I pay repayments to the bank, however, in order to payback easy monthly installments, I have to cut my earning.
If you want a bank to fund your business, always choose a bank that has lowest interest rate. You also need to check, whether bank has low interest rate during he introductory stage and high interest later.




Are you sure you want to delete this post?

idealmike

Interesting. Thanks for your input and tips! I'm sorry to hear about your businesses not doing that well. I hope you find out the main reasons for that and are able to make amends and turn them around. But you're not alone! Only a third of new businesses survive ten years or more. A far cry from the previous long-held belief that 50% of businesses fail in the first year and 95 percent fail within five years. Better success rates notwithstanding, a significant percentage of new businesses do fail within the first year or so. But even though their businesses failed for them. I can still respect them! Why? Because unlike most people that walk this earth, at least those people tried and that I tip my hat to! 10 Ways to Fund Your Startup: Traditional Lenders & Bridge Loans




Are you sure you want to delete this post?

Makefort

Ah, that surely is a bad thing, sorry to hear that you are having issues. But this might also help people know about bank loans and online businesses. Thanks for sharing. If I ever end up start online business I will do a good research on bank loans if I choose them over other ways.




Are you sure you want to delete this post?

Harrysung

Very nice post from OP as usual. But one should be careful of the interest bank loans carry, I have seen big businesses collapsing because of the huge loan interest it accumulated over the years. In borrowing from financial institutions one should consult with experienced financial advisers first.




Are you sure you want to delete this post?

coolavender

I used my credit card to fund my offline business which, fortunately, has been doing well. The loan is a few months away from being settled in full. The interest rate of .68% per month might be slightly higher than what I would have paid for regular banking loans. However, I would have lost the business opportunity had I chosen to borrow the traditional way because all the paper works would have taken a month or so. I got the loan from the credit card within 48 hours. The earnings more than covered the principal and interest payments for the loan. Before deciding on getting a loan, I had to take into consideration my capacity to pay the loan if the business fails. When I felt sure that I can pay it comfortably, I decided right away to take the loan.




Are you sure you want to delete this post?

Corzhens

I think that bridge loan is a trap because you will borrow money just to make a good impression. And if you fail to return or repay back the loan, you will get another loan to cover it up. For all you know, it will be a vicious cycle of borrowing and repaying that you have been losing much in the loan interests. There are many businessmen who fall into that trap especially here that we have the so called micro lenders who lend you money with no collateral but with a 20% interest every month. That’s like killing your business with that heavy interest rate.




Are you sure you want to delete this post?