Start Strong, Stay Stronger: 5 Essential Startup Business Loans for Growth

In this era, start up business loans, or securing funding, are often the key factors of success or failure.

Innovative ideas and passionate founders are essential. But without the necessary financial backing, even the most promising ventures can struggle to take flight.

In this blog post, we’ll explore essential startup business loans that can provide the vital capital needed. Not only to start strong, but also stay resilient and grow in the long run.

In summary, startup business loans play a crucial role in a lot of areas. Whether by providing the necessary capital to fuel growth, support innovation, and overcome financial obstacles.

By accessing tailored financing solutions designed specifically for early-stage ventures, entrepreneurs can turn their ideas into reality. They can also position their startups for long-term success in today’s competitive market landscape.

With Prospa’s Small Business Loan, Ashley and Jeremy were able to:

When Ashley got into yoga and meditation in her early 20s, crystals were an obvious natural extension of her life. But it was on an overseas trip, accompanied by her Mum and spiritual mentor, where an experience in a crystal city opened her mind to a new business venture.

“I put my hand into some of these crystal caves, and my Mum did too,” Ashley says.

“All of us, it was unequivocal there was something that we felt on this trip – putting your hand in all your arm hairs sort of went on end.”

Her next move was one we can all relate to; she Googled everything she could about crystals – what they are, how they work and what you do with them. She discovered that their experience in the crystal city didn’t line up with what was being touted online.

“1990s hippie websites came up,” Ashley says. “They claimed crystals did a bunch of things like cure cancers and bowel movements, and all of these sorts of crazy things. But that wasn’t what appealed to me.”

She saw an opportunity to position themselves as a modern brand, translating the spiritual history of crystals into something “appealing to mainstream and fashionable,” giving crystals a new home in households across the globe.

And Stoned Crystals was born…

In 2015, Stoned Crystals launched in 50 home décor and design stores. When Jeremy, Ashley’s partner in life and business, came on board, they had grown to 100 retailers, including some top global brands like America’s Anthropologie and China’s Lane Crawford.

But in 2017, the retail landscape began to shift.

A wave of retailers with bricks and mortar stores started to close as many consumers moved online.

One day Jeremy asked Ashley, “what would you do if you just didn’t have any B2B orders anymore?” Ashley recalls.

“At that moment, we sort of decided we couldn’t rely on B2B going forward, and we would shift gears and go direct to customers”.

Their decision to invest in direct consumer marketing meant they’d need to expand from a three-person team operating from their living room, but that would require funding.

The pair of self-confessed risk-takers got their first loan (of sorts) from customers buying crystals live on Instagram – which opened doors to new ways to reach their customers.

“We decided we would buy and sell on-demand. We went to all the wholesalers and took pictures and put little dockets on the crystals, and we only bought what people had pre-purchased.” Ashley says.

Their success selling live on Instagram even seeded an idea for a spin-off enterprise business that Jeremy, whose background is in technology, is currently heading up. It didn’t have a name back then but is known today as e-commerce live streaming.

Ashley and Jeremy weren’t aware of the types of funding available to them.

With some help from their accountant and a broker, they started approaching lenders. Both were encouraged by Prospa’s willingness to “go to bat for small businesses” when other lenders and the big banks turned them away.

“This new type of funding that Prospa does really is a gamechanger for small companies. It’s very arduous to go out and get funding from your traditional funding people.” Jeremy says. “Customer service is excellent, and [Prospa are] really pleasant to deal with and talk to, even in challenging times.”

Prospa made it possible to access funds (playfully known as “crystal coin” internally) without needing to sell off a portion of their company to investors, a prospect neither of them was thrilled about when approaching other lenders.

They’ve used their Prospa Small Business Loan to pay for international buying trips and tradeshows – even through the Covid-19 pandemic – where they source most of their stock. Getting to those events and planning for the future has supported them in achieving their targets and revenue goals year on year.

And that hard work has really paid off.

“We’re in the top 100 fastest growing companies,” says Ashley. A reference to recently qualifying for entry on The Australian Financial Review’s Fast Starters list.

What sets SBA loans apart is their government guarantee. It mitigates risk for lenders, making them more willing to extend credit to startups with limited credit history or collateral.

Moreover, these loans come with longer repayment terms, easing the burden on new businesses as they navigate the early stages of growth.

By leveraging SBA loans, startups can access the capital they need to launch, expand, and thrive in competitive markets. Thus, laying a solid foundation for sustainable success.

Equipment financing allows startups to conserve their working capital while gaining access to tools necessary to operate and scale.

By structuring repayment schedules to align with equipment usage and expected revenue streams, startups can maximize cash flow and preserve liquidity. Which enables them to invest in other critical areas of their operations.

Additionally, equipment financing may offer tax benefits. Like depreciation deductions, which further enhances its appeal as an option for startups to optimize their resources and fuel growth.

Business lines of credit offer startups flexible access to capital, enabling them to address various financial needs promptly. This adaptability fosters resilience and empowers startups to seize growth opportunities effectively.

Unlike term loans, lines of credit let startups borrow as needed, paying interest solely on the amount used.

Lines of credit offer startups agility and resilience, which are crucial in ever-changing markets. By establishing a business line of credit early on, startups will build confidence, enabling growth.

Invoice financing bridges cash flow gaps, using invoices as collateral for immediate capital.

By unlocking the value of unpaid invoices, startups can improve liquidity, maintain steady operations, and avoid disruptions by late payments. Moreover, invoice financing is often more accessible to startups than traditional loans, as lenders focus more on the invoiced customers.

This makes it an attractive option for startups with limited credit history or collateral.

In recent years, P2P lending platforms emerged as alternative sources of financing for startups seeking to bypass traditional banking channels. These platforms, connect borrowers directly with individual investors willing to fund their loan requests.

P2P lending offers startups several advantages. Which includes faster approval times, lower interest rates, and greater flexibility in loan terms compared to traditional banks. Additionally, it democratizes access to capital by leveraging technology, matching borrowers with investors based on their financial profiles and needs.

This direct and transparent approach fosters a sense of trust between borrowers and investors, creating mutually beneficial relationships.

By tapping into the power of P2P lending, startups can access the capital they need to launch or expand their ventures while benefiting from a supportive network of investors committed to their success.

When exploring financing options, it’s essential for startups to assess their specific needs, financial situation, and growth trajectory.

To make informed decisions regarding startup business loans, entrepreneurs should conduct thorough research and compare terms and interest rates. Seeking guidance can also provide valuable insights to ensure your financing options align with your long-term business goals and stability.

In conclusion, securing adequate funding is essential for startup success.

Understanding the array of startup business loans enables entrepreneurs to select financing options best suited to their specific requirements. By aligning their choices with their business goals, startups can establish a solid foundation. They will remain adaptable to challenges, and chart a course towards sustained growth with confidence and resilience.

Remember, every investment made today lays the foundation for a stronger, more prosperous tomorrow.