California is a great place to start a business. Though you might think that the markets would be quite saturated, there is always going to be room for something new. For this reason, you might be able to create a unique business that people love. However, you might need some financial backing to be able to do so successfully – and that means taking out a business loan.Â
Know What Type of Loan You Need
When you start looking for business loans, you will quickly discover that there are several types that you could opt for. Therefore, it is vital that you find the one that suits your needs the most. A good loans advisor should talk you through each of the different loan options and help you work out which one is right for you.
The two most common loans you will find are secured and unsecured loans. Secured loans use assets as collateral. These could be assets of the company, such as commercial property or equipment used by the business, or it could even be assets owned by the company director like their house or car. Unsecured loans do not have this requirement for collateral. Though they are not as popular, they are becoming a little more readily available since fewer businesses are dealing in tangible assets nowadays.
You might also want to look into the government’s SBA loans, or even asset-based financing that you can use to buy the specialist equipment your company might require. Make sure you learn about the different types of loan on offer, and choose the one that you think will be best for your company overall. It might be a straight secured loan, or it could be something very different.
Make Sure You Find the Best Deal
Whatever you do, don’t just opt for the first loan you come across! You will have no basis for comparison; therefore, you won’t know if it is the right one for you! It is incredibly important that you compare the best business loans to determine whether you have found the right one. Chances are that you might have even found the better deal the first time around. However, you are not going to know this until you take the time to investigate the market.
Your loan broker should be happy for you to have a look round for the right fit for you, and should also be able to make appropriate recommendations for you to consider. If it feels like they are steering you towards one type of loan in particular, try to ask them why. This is your business, after all, and you need to make sure that you are picking what is in the best interest of it.
It can take a little time to track down the right deal for your business, so it is vital that you properly compare each one. Only opt for a loan if you think it will be the thing needed to move your company forward.
Make Sure You Comply with Regulations
Since it is home to so many businesses, it is unsurprising that California has some incredibly strict regulations that you need to follow if you want to get the finance that you need here. Senate Bill 1235, passed in 2018, is an incredibly important piece of legislation that you could do well to look over. This makes applying for finance, especially any form of commercial finance, very transparent. This is something that will only be beneficial to business owners.
You must also make sure that you meet some of the rules that come with applying for a business loan in California, especially if you do intend to apply for a small business loan. For such a loan, you need to make sure that the primary business is located in California (so you could have the main business in Santa Clarita, one of LA County’s best business-friendly cities, and then another branch in another state) while also ensuring that at least 51% of your employees and income are there. These are just some of the regulations that might apply to you, so make sure you understand them so you are able to apply for your business loan without any issue.
Applying for a loan in California might have a few more hoops for both you and lenders to jump through, but there is no reason why you can’t get what you need. Start the search for your perfect business loan today!
