According to Small Business Trends, 77 percent of a broad number of small businesses get its funding from the young entrepreneurs personal savings. So where do the other 23 percent get financial support to construct their business from the ground up?
Quick loans, of course.
Some of you might have answered traditional bank loans and it might be true for a few young entrepreneurs. However, these traditional bank loans can sometimes shatter someone’s business dream. They have so many red tapes, stringent procedures and when you put bad credit history into the mix – loan approval is almost always futile. So why bother?
Quick loans, on the other hand, can take as fast as two minutes to apply, another couple of minutes for approval, and within 24 hours for loan disbursal.
Here are 5 tips to find quick loans for young entrepreneurs
1. Personal Loans
Personal loans are mostly unsecured loans that can be borrowed from a bank or any financial institution. And when we say unsecured, that means, you don’t have to put up collateral for your loan. While this may be beneficial for an expedited process, this poses a higher risk to the lenders which in turn, imposes higher interest rates.
Simply put, personal loans don’t really care about your credit score if that’s one thing you’re concerned about. The most important eligibility criterion is a stable income source. The loan amount could be up to $100,000 and payment terms up to 60 months.
2. Peer-To-Peer Lending
Also known as “social lending” or “crowd lending,” peer-to-peer lending eliminates the middleman in the entire process which means you don’t have to deal with a lending company. Instead, borrowers will make use of a P2P online platform to borrow from individual investors. However, it’s not as easy as it sounds. Investors don’t just hand you their hard-earned money without further background scrutiny. They need to make smart and careful decisions when lending their money to random people so as not to fall prey to the rotten eggs. The P2P platform connects borrowers to lenders so they see eye to eye with the interest rates. Then, the lenders assess your profile which is uploaded on the P2P online platform and everything will go from there.
Because you don’t have to deal with loan officers, the application process and eligibility requirements are extremely lenient. The loan amount can be up to $300,000 and payment terms can be up to seven years.
For startups which need an investment capital of $50,000 or less, microloans can definitely aid them in their journey. As a matter of fact, microloans are intended to help underprivileged communities. They prioritize the lower-class entrepreneurs, below average income earners, and women. According to MIX Market, microloans helped around 125 million people put up their business and 80 percent of this tally were mostly women. This is a magnificent way of empowering indigent people and giving them a chance at life.
4. Business Line of Credit
If you already have your brick-and-mortar store and need to purchase the necessary equipment, supplies, and additional construction materials to get going, you can opt for a business line of credit. No, it does not work like a conventional credit card. However, it’s somewhat similar. You can apply for a business line of credit and the lender approves a certain amount if you meet the requirements. Once approved, you can continuously borrow this amount as long as you don’t go over the maximum credit limit. All you have to do is to make sure to adhere to the monthly payments with the added interest. There are two types of business lines of credit: Online lenders and banks.
Points to consider for online lenders:
- Fast processing (disbursement can be within 24 to 48 hours)
- Lenient eligibility requirements
- Lower credit limit (around $100,000 or less)
- No collateral needed
- Higher interest rates
Points to consider for banks:
- More rigid application procedures
- Strict credit history requirement
- Credit limit (up to $150,000)
- Very Secured
- Collateral might be needed
- Interest rates less
5. Crypto-Backed Loans
For young entrepreneurs who have a couple of crypto assets, they can take advantage of crypto-backed loans. These are considered as fast and permissive quick loans that focus on your online presence instead of your credit score. You only need to put up your crypto assets as collateral and loan can be granted as fast as 24 hours. You also have the right to get your assets back if you’ve fully paid the loan amount.
Well, these are the most effective quick loans to help young entrepreneurs finally start their business plans. Now, all you have to do is take that first step in the application process and you’re all set!
Anthony Blair, a certified financial planner, author, and blogger, enjoys sharing tips on personal finance, business, and entrepreneurship. She is currently working for My Quick Loans, which offers fast loans online in the UK including Christmas loans, Payday loans, Late Night loans, Weekday loans, Student Short Term Payday loans and many more.