Funding for business startups and growing businesses can be difficult to obtain… that’s no secret, but with the right resources, it can be easier than you think.
So, how difficult can it be to acquire funding for business startups?
A short while ago, I was speaking with a veteran business banker from one of the top banks in the country. We discussed the percentage of business owners that actually receive funding from their local bank. The banker sadly explained that, on a weekly basis, she can help about 3 of the 20 or so business owners that come to her for funding. At the end of the day, only 1 or 2 of those initial 20 actually receive funding. Doing the math, that’s about 5% to 10% of business owners, and includes those with established businesses; the percentage only decreases for startups.
What is it about the lending criteria that makes funding so difficult?
Since the economy crash during 2008, many banks have tightened their belts to be extremely conservative in lending. Bank financing for startups usually proves difficult. Showing profitability over the last 2 years by providing tax returns is usually the first requirement. Despite these difficulties, Fundwise Capital has a strategy. They have a network of lenders that allows new and growing business owners access to unsecured lines of credit. These credit lines can be accessed at 0% for the first 9-15 months. They’ve helped secure over $200 million in funding for their clients.