How to get a loan for your tech startup
For many looking to launch their tech startup, funding or finding a mortgage/loan is their first and often biggest stumbling block. Even the basics- developing your product, equipment, marketing- all cost money, making funding essential from day one.
Fortunately, startups have more options than ever when getting a new business off the ground. From individual investors to crowd-funding, there is a range of possibilities for tech entrepreneurs to find the right option for them. For many people looking to launch their tech startup, who have already calculated the MVP development cost, funding or finding a mortgage/loan is their first and often biggest stumbling block.
Small Business Loan
Many lenders offer business loans specifically designed to help burgeoning businesses get off the ground. This is an especially good option if you are struggling to find investment elsewhere but careful research should be undertaken before committing.
You can always reach out to Blutin Finance for getting a mortgage or business loan to help with your business.
Every lender will have different terms including interest rates and repayment deadlines and these should be fully understood before applying for a loan. Some require that the loan is linked to your personal credit so your credit rating is at risk if you fail to make repayments on time.
You should also consider any initial payments such as administration or processing fees that might be asked for, meaning some personal capital is required.
If the bank you are going to for a loan is asking you for your pay stubs, and you had lost them, you can always use an online paystubs maker to regenerate them, but make sure the information you input on them are correct and not made up!
Investors
Finding people to invest in your business is one of the most established and popular ways to fund a new business. Investors can be found using online research and networking to find those most likely to take a financial interest in your ideas.
If choosing this route, you’ll need a solid business plan and cash flow forecast as investors will need to know you are reliable before they put any money into your startup. Show them you have a solid knowledge of where your business is going and that you have the resourcefulness to get it there.
Crowd-funding
In recent years, crowd-funding has become increasingly popular as a way of starting tech businesses.
Websites such as Kickstarter and GoFundMe allow startup entrepreneurs to publicise their business idea and attract multiple funders without committing to a long-term investment deal.
Not only does crowd-funding provide the opportunity to find financial contributors, but it also generates awareness of your product. On these websites, your business idea is seen by potentially thousands of people with an interest in tech products.
Often funders will contribute in return for a reward; maybe a free product or a discount equivalent to their input. This means you aren’t giving away equity from the business but are still receiving financial contributions.
There are however things to be aware of when looking into crowd-funding as an option for your startup. You should be clear with funders what they can expect in return for their payment and most websites require a fee to list your product. Again, some personal capital, although minimal, will be needed to launch your business in this way.
When finding funding for a tech startup, many options must be considered carefully. Startups should be prepared to do in-depth research and networking before making a decision and remain open to the possibility of some initial personal investment. With the range of options now available to startups, with research and consideration entrepreneurs can find an option that works for them and their business plan.
