Loans For Starting A Business From Scratch


Getting a loan to start a small business from scratch is an important task facing a novice entrepreneur. Banks are in no hurry to provide this type of loan. This is associated with a high risk of failure in the development of the case. But there are a number of ways that you can increase your chances of getting loan approval.

Furthermore, some banks provide and some do not. The Chase bank provides loans for small businesses. In order to make a transfer with Chase Bank, the chase routing number will help you.

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Small business is a form of a commercial enterprise, the number of employees of which does not exceed 100 people. Moreover, companies enjoy a special tax regime and simplified bookkeeping. 

To start a business, an entrepreneur will need to use seed capital or take out a loan to develop a business from scratch. How to get a loan to start a company? What can be done to increase the likelihood of loan approval?

For note, the bank identification number is important, if you’re making any transaction. It can help financial organizations to find fraudulent, stolen cards. In addition, if you want to identify then you can get the help of an online bin checker tool.


Conditions for obtaining a loan for business development from scratch

A potential borrower must meet the following requirements:

  • have no criminal record;
  • with a clean credit history;
  • no debts, fines, unpaid taxes;
  • be solvent;
  • have a permanent registration in the region of the bank’s presence;
  • between the ages of 30-40 and married;
  • have your own property.


Getting a loan for business development from scratch

Loans for small businesses

Several types of loans are suitable for the development of entrepreneurship from scratch.

  • A consumer loan is issued for starting a business from scratch, increasing working capital, and purchasing new equipment.
  • Overdraft is accessible to credit cardholders. It permits you to pull out from the current record the number of assets in overabundance of the equilibrium. In addition, the interest rate is determined individually and depends on the degree of trust in the bank, the duration of cooperation, and the company’s turnover.
  • A bank ensures is a guarantee for the satisfaction of commitments under the delicate.
  • The credit line allows you to receive funds in installments to pay off current expenses.
  • Explicit credits are intended to address explicit issues. These incorporate considering and renting.


Stages of obtaining a loan for starting a business from scratch


Before contacting the bank with an application, you should complete the following steps:

  • develop a business plan;
  • choose a franchise;
  • prepare a deposit.


The business plan includes a complete description of the project and the direction of development. As a result, in some cases, attracting investors who are ready to invest their finances can increase the chances of obtaining a loan. The business plan includes a market overview, accounting calculations, the vision of work, and loan repayment schedule.

The likelihood of getting a bank loan for an independent business is low. Lending institutions are more likely to issue loans to buy a brand. You just need to make sure that the chosen franchise is proven and profitable.

When a property is provided as collateral, the chances of approval of the loan application are increased. Furthermore, the collateral is vehicles, production equipment, real estate, or securities. In the absence of collateral, a beginner entrepreneur will have to contribute start-up capital in the amount of 30% of the estimated project budget. As a result, an individual and legal entity can act as a guarantor for a loan to start a business from scratch.


When contacting the bank, you need to follow these steps:

  • choose a loan program;
  • register and tax an LLC or individual entrepreneur;
  • submit an application and provide the bank with a full package of documents;
  • issue a pledge, get money.
  • Most banks provide the ability to apply online for small business loan approval. To do this, fill out the form on the website, indicating your contact details. As a result, the bank’s preliminary response you receive on average within 3-5 working days.


When choosing a loan program, pay attention to the following points of the agreement:

  • payment schedule;
  • interest rate;
  • the procedure for calculating penalties for non-payment of a loan;
  • conditions for early repayment of the loan.
  • Banks develop programs with different conditions and requirements for the borrower. In addition, if you need to receive small amounts, in some cases it is more profitable to take a consumer loan or issue a card with a replenished limit.


Stages of obtaining a small business loan

Documents for issuing a business loan from scratch

Regardless of the bank chosen, when submitting an application, you will need to provide:

  • furthermore, passport and military ID (for citizens liable for military service);
  • income statement (2-NDFL);
  • TIN Number;
  • drawn up a business plan;
  • yet, confirmation of surety;
  • franchise agreement;
  • confirmation of temporary registration, if necessary;
  • lease agreement for premises, contracts with suppliers.


Pros and Cons

Many novice entrepreneurs are interested in the question of how to open a business from scratch, and where to get a loan for development. It is impossible to answer unequivocally, since applying to the bank for financial support has its pros and cons.



  • Fast receipt of the required amount of money to start a business from scratch. Moreover, in some cases, a loan is considered the best option for the development of a company and making a profit.
  • In addition, most banks provide loans for entrepreneurs on favorable terms with the possibility of submitting an online application for consideration of the application.
  • For each client, a convenient payment schedule is selected, taking into account individual characteristics: the timing of settlements with counterparties, the seasonality of work.
  • Reduced rate for LLCs and individual entrepreneurs. Especially for those who receive a loan secured by the property. The interest on loans for small businesses is lower than for individuals.


Potential risks

  • High requirements for the borrower. Banks carefully check the solvency and reliability of the company when issuing subsidies. Getting a loan for small business development from scratch is not as easy as it might seem. For individual entrepreneurs and LLCs, a high percentage of refusals remains.
  • In addition, if it is impossible to pay off the debt or the termination of the functioning of production, there is a risk of loss of the collateral.
  • Moreover, the high-interest rate for a short loan period. Thus, the bank ensures itself in case of non-repayment of debt.
  • Furthermore, the difficulty of making monthly payments is if the entrepreneur makes a profit on an irregular basis.


Some Advantages of getting a small business loan

In addition, as part of supporting small businesses, the state provides grants, guarantees, and subsidies for the development of individual entrepreneurs and small companies. 

When applying for a loan, a novice businessman needs to assess the possible risks, familiarize himself with the requirements of the bank, and provide a full package of documents for checking the solvency. 

Furthermore, issuing a loan for small businesses is an effective solution to financial problems and assistance in the development of a new business from scratch.



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