Start up loan education and training can help any soon-to-be business owner to make wise financial decisions. Starting a business often involves a substantial amount of money, which may be hard to obtain if the right steps do not occur.

Finding online start up business loans is only the first step. Individuals need to compare the types of loans available and ensure they have presented the business well to obtain these loans. With lending conditions difficult in some areas, it is essential for would be business owners to be educated on their borrowing options. Keep these things in mind:

1. Learn about special start up loans for women starting their own business.

2. Find out about options for start up business loans with no credit, if available.

3. Work with financiers for bad credit start up loans, available to some with collateral to back up the loan.

Action Steps
The best contacts and resources to help you get it done

Talk to lenders about no credit start up business loans

Credit is an essential element of any loan application. While some businesses may offer some options for no credit start up loans, it is usually only done when substantial collateral is available. Start up loans may have a basis on personal creditworthiness, since the business entity may not exist. Business owners should understand how to check credit and learn about improving it.

I recommend: Improve credit prior to applying for a start up loan. To learn how to do this, find out what the credit is based on and what is on a personal (or business) credit report. Fair Isaac provides a detailed explanation of how to improve credit scores. In addition to this, visit each of the credit reporting agencies and request a copy of your credit report. These organizations also educate on credit improvement strategies based on an individual's credit report. Visit Experian, TransUnion and Equifax to learn about personal and business credit scores.

Contact the agencies regarding business start up loans to learn more

There are resources and tools able to educate individuals on their options with start up loans. Small business start up loans may also be available through several of these sources.

I recommend: Get educated on start up business loans direct from source providers. The U.S. Small Business Administration is one of the best resources for learning about small business loans. It provides availability information, loan options and training on how to use these loans. Contact lenders and inquire about loan options. This can give a potential business owner information about loan availability and application requirements. Bank of America provides a good deal of this information on its website.

Read about unsecured start up loan options

Unsecured start up business loans may be an option for borrowers with high credit scores. Secured loans are those obtained for equipment, real estate or other valuable property. Learn the difference in these loans and other types of available loans.

I recommend: Try to plan business funding from the start by having an understanding of all loan options. My Own Business provides an extensive online educational program to educate individuals on starting and financing their own business. This nonprofit organization offers information on all types of loans available. The Federal Trade Commission educates individuals on business loans and scams. This information can help individuals choose the best start up loans.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Start up loans for small business often require a business plan. Individuals may wish to learn more about writing a business plan prior to applying for a loan.

Start up business loans aren't hard to find - it's finding the right loan, under the right terms that tends to be the most difficult. Investors, venture capitalists and banks are willing to lend you their money to fund start up business loans. Look into the terms of the different type of start up loan products available, or you may lose your business.

When looking into business start up loans, the first place you need to go is your bank or credit union. Loans offered by traditional lending institutions tend to have the most straightforward lending terms. Follow these steps toward getting a small business start up loan without a bank or credit union:

1. Look into an unsecured start up loan from The Small Business Administration (SBA). They offer a number of loan programs including, bad credit start up loans and no credit start up loans.

2. Find investors to fund business start up loans. They will want to see a business plan, so have one in place before approaching investors.

3. Learn about financing options through angel investors.

Action Steps
The best contacts and resources to help you get it done

Look into both secured and unsecured start up business loans

Unsecured start up business loans have much more stringent credit requirements. Review a copy of your personal credit report and take care of all negative items like collections or past due balances on credit cards or utilities. Paying off these items increases your creditworthiness, thereby, increasing your chances of obtaining a start up loan.

I recommend: Contact The Small Business Administration (SBA) for services and tools to help you get start up loans for small business. America One Unsecured offers unsecured start up loans, but like with all lines of credit, you should very carefully review the terms and finance terms before signing on the bottom line.

Seek venture capitalist companies to fund business start up loans

If you have the right type of business, a venture capital firm can be a great help to you. They'll give you the money you need in exchange for partial ownership of the company. This is a good option for start up companies that need millions of dollars in start up capital.

I recommend: Draper Fisher Jurvetson and Mohr Davidow Ventures are two venture capital firms that specialize in early stage funding. This is a great first stop when you need a small business start up loan.

Contact angel investors for business start up loans

Angel investors are individuals who help new business owners with the startup capital they need, in exchange for partial ownership or debt repayment with interest. Unlike venture capital firms, who must often answer to other investors, angel investors may be interested in things other than the financial outlook of your company plan.

I recommend: The Angels Forum specializes in funding technology-based companies. Click on "Submit a Plan" in order to contact them with your business idea. Maine Angels also provides loans to start your business, without industry restrictions.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Prepare a presentation when appearing in front of investors. Investors want to hear how your business is going to succeed and why they should give you start up loans for small business. Know what you're going to say to them by preparing and practicing what you plan on saying to your potential investors.
• •  Angel investors often specialize in business start up loans. These are private parties that offer loans of various sizes looking to invest in businesses in which they believe are going to offer them a higher return than other more traditional investments.
• •  Venture capitalists offer large business start up loans. They offer loans from the venture capitalist businesses by soliciting private lenders on your behalf as opposed to offering up private money.

Using small business loans wisely can be the ticket to your business' success. Most business owners need a bit of financial aid through small business loans now and then, but it's vital that you use the money in a way that's good for your business.

Many will remember that during the dot com boom, new Internet companies squandered millions of dollars in start up capital on unnecessary employee perks. This resulted in the failure of their businesses. You need to make sure that you don't make the same mistakes with your small business loan.

In order to get the most out of using small business loans:

1. Write a solid budget. This will show you how much money you need from your small business start up loans. It will ensure that you only borrow what you need and spend that money on necessary expenses.

2. Use the money wisely. Even though you may have small business financing, it's no reason to spend frivolously. You should still check for the best deals.

3. Apply through several lenders to make sure that you get the best small business loan rates. Your rate has a big impact on the total amount you owe.

Action Steps
The best contacts and resources to help you get it done

Look for large startup small business loans to finance your business

When your business is just starting out, you may find that there are many large expenses. These are not things that you can handle through your own savings. Many companies will offer large loans (often up to $250,000) to start your business.

I recommend: At BusinessFinance.com, you can apply for start up loans from several different companies. This makes it easy to compare rates. If you need an unsecured business loan, you may want to apply at InitialLendingGroup.com.

Get a small business loan for your business property

Depending on the type of business you start, you may need commercial funding for the property you use either as a store or as a production area. A commercial mortgage can help you get this funding.

I recommend: C-Loans allows you to instantly apply with over 700 lenders. You can also apply directly through banks like Wells Fargo.

Use credit cards for small purchases and as unsecured business loans

If you don't have any collateral, it can be difficult to get a loan from a bank. Fortunately, you can use credit cards to fill in the gaps. Credit cards are also ideal for making smaller purchases online or at local stores.

I recommend: Read the reviews of business credit card offers at Creditor Web, or apply directly for a credit card through a company like Advanta.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Always compare small business loan rates and read the fine print to make sure that you are getting the best deal on your loan. A small difference in rate could mean a big savings overall.

Not all new business owners have the start-up capital necessary to get their business off the ground. In most cases, they'll look for outside help in the form of start-up loans or grants. There are many different types of funding available to new business owners, but if you're looking for funding, it's important to know what's involved. For example, you may be looking for an unsecured loan, but find that all lenders require some type of collateral. Make sure to research all of your funding options.

Action Steps
The best contacts and resources to help you get it done

SBA loan

The Small Business Administration, a government agency, acts as a guarantor on SBA loans. This makes private lenders more likely to offer loans to new business owners, which is often a risky endeavor. You can apply for an SBA loan directly through your bank.

I recommend: There are different types of SBA loans. The Basic 7(a) Program allows business owners to get funding from a commercial lender. The CDC/504 loans are for Certified Development Companies, and funding from these loans should help a community at large.

Collateral

Because lending money to a new business is risky, many lenders prefer a business owner to offer some type of collateral. Collateral is insurance against the cost of the loan. If the business owner doesn't repay the money, the lender can repossess the collateral in lieu of payment.

I recommend: American Chronicle discusses the types of things that businesses can use as collateral, such as real estate, equipment and inventory.

Unsecured loan

With an unsecured loan, the business owner does not have to provide any collateral. Lenders base the loan decision on the owner's credit score and business plan.

I recommend: Direct Lending Solutions offers unsecured loans and a description of what they are.

Line of credit

A line of credit allows business owners to get the money they need, but it is slightly different from a loan. In a line of credit, the lender approves the business owner for a loan up to a certain amount. However, the business owner does not have to use the full amount and only pays interest on the amount that he or she uses.

I recommend: To learn more about lines of credit and the advantages they offer, visit BusinessFinance.com.

Angel investors and venture capitalists

Angel investors and venture capitalists are another way that business owners can get start-up funding. This is a good place to look if your business requires millions of dollars. Both require a percentage ownership in the company in order to offer funding. The difference is that angel investors are often individuals, while venture capitalists usually have to answer to a pool of investors.

I recommend: The Ladies Who Launch have a good description of the differences between the two types of investors.

Early-stage funding

Early-stage funding is for businesses that are just starting up, while late-stage funding occurs when the business is more established. People sometimes refer to early-stage funding as seed-stage funding. Lenders may be more likely to offer late- stage funding because it's less risky for them.

I recommend: Garage Technology Ventures specializes in early-stage funding and describes what it is, as well as what it looks for in companies that apply for it.