New businesses have many needs, including inventory and equipment. As an entrepreneur, you may think that you need to have all of the funds required to launch your new company yourself, but that’s not the case. Several startup financing options can help. This guide can show you what they are, how to qualify, and how to use them wisely.

The Challenges

First, you should know what challenges you’re likely to face. That way, you won’t get disappointed if you get turned down the first few times. This is perfectly normal, but you shouldn’t let it stop you from getting financing that can make a huge difference in your startup’s financial health.

One challenge is finding a lender that is willing to work with startups. Some banks don’t even give you the time of day if you have less than two years in business. The good news is that once you find the right lender, you’ll probably also come across a large variety of loans designed specifically for new businesses.

Another challenge is the lack of financial records and credit scores that a startup has. You’re essentially asking the lender to take your word that you’re a great entrepreneur without having any documents to back up your claim.

The Solutions

Fortunately, with a good lender by your side, getting financing is as simple as side-stepping the obstacles. Instead of focusing on the loans, you don’t qualify for, you can look for financing that doesn’t have those requirements in the first place.

As an example, did you know that your credit score isn’t always a deciding factor for loans? Some types of alternative financing base approval on assets, your customers’ credit score, or invoices.

For example, startups that sell products to other businesses — known as B2B companies — can take advantage of purchase order financing to make profits at the beginning. This financing option lets you provide purchase orders to the lender, and then the lender sends payment to your suppliers. You have to pay something for this service, but it’s a great way to start building your customer base and fulfilling orders without using up all of your working capital in inventory purchases.

Other Tips for Qualifying

Before applying for any loan, take a moment to think about your strengths. Do you have past management experience, perhaps working as a project manager in another company? You can highlight your talents, education, and past work experience to convince lenders to approve startup loans or leases.