According to the Kauffman Index of Entrepreneurial Activity, 565,000 new units were created in 2010 and this number exhibits the highest level of entrepreneurship over the past decade and a half. Businesses are the backbone of any country and their success drives the overall economic growth. The key to the success of any venture is adequate financing and continued operations. Easy availability of new business startup loans is a key factor driving the growth of new ventures in the US.

Need for New Business Start Up Loans
Many entrepreneurs feel that they can raise the necessary funds themselves and that they have no need for new business start up loans. However, doing so may put them in difficult situations, such as not being able to meet the operational costs of the new venture. Cost overruns or underestimation of expenses often results in the need for more funds. Such problems can be avoided by resorting to a good mix of equity and debt financing.

How to Obtain New Business Start Up Loans?
You need to follow certain steps to get the new business start up loans:

• Identify your funds requirements
  Do this on the basis of the type of venture you are planning. A manufacturing unit will need more funds than a service entity. You also need to decide how much is going to be your investment, because only then others will be ready to invest. Apart from this you need to estimate the various expenses and capital outlays associated with the venture.



• Identify the various sources of funding
  The next step is to identify the various sources of funding and choose whether you wish to opt for equity or debt financing. Equity financing is available from friends, family, or personal savings. Debt can be obtained from banks, financial institutions, insurance companies, leasing companies and capital venture companies.


New business start-up loans provided by banks and financial institutions can be short term, intermediate term or long term loans. You can also get a line of credit depending on your credit scores. This form of funding is ideal for businesses that experience seasonal fluctuations and entails interest only on the portion that you withdraw. Apart from the various government agencies, several private companies also offer assistance for launching businesses in specific areas or for the promotion of specific activities.


• Prepare the documents
  Once you have identified the sources, you need to get the necessary documents ready. This includes a detailed business plan, your assets, your repayment plan, details of your tax returns, credit scores and other documents that will help the investor or the lender to take a decision. You can even take the help of professional advisory agencies for ensuring that you have all the necessary documents to apply for funding.