Entrepreneurship is both a dream and a career. It takes time, devotion, passion, and hard work. But, it also takes money. It takes initial financing and ongoing support. Once you start your own business in a passion you love, your dreams really do become a reality.

It doesn’t take much to know when you need money. Finding the most prudent financing option is another matter. Borrowing can be confusing and time-consuming. But, the internet now empowers lenders and borrowers. It can match business needs and lenders willing to help. But, you need to know what works for you before you shop.

What works for one business situation doesn’t work for another, but here are 11 types of business loans and what it takes to get approved.

Making Your Career Dreams a Reality: List of Financing Options

Here is a list of different financing options to get a business off the ground and make your dreams a reality.

  • Think about personal loans. Family loans are not the first choice or recommendation. Startups often rely on the kindness of family and friends, especially when other lenders won’t look at them in their starting phases. Such loans are high risk for borrower and lender. And, they have cost many a family relationship.
  • But, “personal loans” also refer to money borrowed from institutional lenders without collateral. These unsecured loans provide money borrowed and paid back in fixed monthly payments with interest rates higher than normal secured loans but cheaper than credit cards. You can buy equipment, meet payroll, step up your facility, or consolidate other debts.

    Personal loan lenders consider your credit score, credit history, and debt-to-income ratio. Good credit will likely lower your interest rate. Allowing for the lender’s processing, the funding may be relatively fast.

  • Use business credit cards. Credit cards are revolving lines of credit. You spend against that credit with plans to make minimum monthly payments without exceeding the credit limit. You use them to finance daily expenses, travel, supplies, utilities, and dining.
  • Credit cards require no collateral, and they earn rewards. Credit cards secured by your business for business purposes may have lower interest rates than consumer cards and promise better rewards. They often come with other business benefits and/or discounts.

    They provide a convenient way to chronicle and report business expenses for accounting and tax purposes, and they are an indispensable part of a contemporary business. Your credit card application may be easily approved. But, it will involve a credit check and will add to your debt/asset ratio. In addition, they may come with potentially high and variable interest rates and other fees.

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