Now that interest rates have fallen to their lowest levels in decades, borrowing to finance your own business or sideline business has become affordable. You may prefer to raise money by taking out a loan rather than by bringing in equity investors. Borrowing money fixes the amount you’ll pay for debt service and allows you to go forward without giving up a piece of your company.
To get that vital bank loan, find a bank that’s willing to make loans or extend lines of credit to small companies. Not every bank is equipped to do so; some aren’t set up to make loans secured by accounts receivable, for example.
Ask whether a bank is interested in making the $25,000, $50,000, and $100,000 loans that many startup companies request. Some banks insist on making much larger loans so they don’t want to lend money to extremely small companies.
