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How to apply for a Startup Loan

Published on 4th March 2019

Deciding to take the road less traveled and become your own boss is a major decision. Although it can be enjoyable and highly rewarding, it also presents its own unique challenges that you need to overcome when they appear. One such obstacle that you’ll need to contend with often involves the matter of funding. Being a start-up, it's likely that your business possesses a limited trading history, which will affect the number of funding opportunities that it could qualify for. However, if you’re seeking funds to help stimulate growth or support your operating costs, there are finance solutions that could help. So if you’re looking for a Startup Loan but are unsure of what’s required, this is what you need to apply.

  • Decide whether or not to provide security
  • Review your credit profile
  • Prepare the necessary documents

Do I need to provide security for a Startup Loan?

Depends entirely on the type of product that you’re aiming to apply for. Startup Loans covers a wide range of business finance solutions that can be either secured or unsecured. If you intend to raise funds using a secured product, you will need to present collateral in the form of unencumbered equipment, machinery, property or receivables. Although this helps raise the lender's confidence, especially if you’re asking for a large amount, it does mean putting your assets at risk of repossession should your business default. However, if you aren’t a homeowner or you’d rather not put your assets at risk, you could apply for an unsecured product instead. Unsecured options don’t require such a commitment but, because this transfers a greater amount of risk back to the lender, they usually carry higher interest rates as a result. Plus, some lenders may ask for a written or verbal Personal Guarantee, demonstrating your commitment to fully repaying the agreement on time

Need help in providing funds for your start-up? Unaware of what funding opportunities may be available? Apply for a Startup Loan or learn more about how your business could benefit

How much attention will be given to my credit profile?

Again, this depends on the agreement. Although lenders will usually request permission to review your credit score, having adverse personal or business credit won’t always be used against you. This is because some products may rely on other factors such as your monthly revenue, unpaid invoices or the amount of equity held by your unencumbered assets. That said, unsecured products may place a varying amount of focus on your credit score, with some exceptions. As such, this helps make Startup Loans widely accessible to new and emerging businesses. However, the strength of your credit score will affect how much interest you’ll be required to pay throughout the agreement. If you’re worried about the amount of interest you may be charged as a result of adverse credit, you can read more on the subject here.    

What documents will I need to submit with my application?

In addition, you’ll also need to take into account what documents you’ll be required to submit with your application. Depending on the product, these can range from Proof of Identity, your latest and past bank statements, Profit and Loss Statements, sales reports, inventory reports, invoices and collateral documentation to tax returns. Providing these is essential as it grants lenders a stronger understanding of how your business operates or even how much funding to provide. So, in order to ensure that the application runs as smoothly as possible and without the lender needing to chase you up about missing paperwork, check which documents they require and get them all prepared beforehand.

Are you looking for a Startup Loan?

As a start-up, you may believe that your ability to access external funding opportunities is limited. Although it’s true that some products are beyond your reach on account of your limited trading history, there are finance solutions available that could offer the support you need to succeed. Therefore, there’s no need to put your plans on hold or dip into your personal savings, as you could still reap the benefits of applying for Startup Loan. So if you’re looking to stimulate growth, buy new equipment or cover your operating costs, apply for a Startup Loan today or find out more with Rangewell.


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David Harrison

David Harrison

Content writer
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