Starting capital is the first challenge anyone looking to venture into any sector faces. And today, the smartest option is to combine traditional and new-age alternative forms of lending. Discover some places to search when in need of startup loans.
- SBA startup loans
The Small Business Administration does not hand over loans directly; instead, it works with lending firms that are comfortable with its guidelines to offer would-be merchants startup loans.
With SBA, you’ll not only get competitive loan rates but also and enjoy low down payment. What’s more, the SBA offers counseling that could help get your micro-business started on the right foot.
- Personal loans for business
Not many entrepreneurs are aware you can utilize a personal loan to fund a startup. Anyone with a FICO Score starting 580 or higher can apply. Finances are ready in only 24 hours, and you decide how to spend the money. The downside of using a personal loan to finance your startup is that it mixes up your business finances and personal finances. Plus, they are limited to only $40,000.
- Nonprofit microloans
You can also take advantage of the microloans which typically fall in the $500 to $50,000 bracket and come as short-term loans with meager interest rates. Other lenders offer zero interest rate micro-loans for borrowings up to $10,000. Whether you get these extra coaching and marketing support services will depend on the firm you approach for a micro-loan.
- Equity crowdfunding
Equity crowdfunding is a unique loan product for startups or young business. With this type of funding, the investor gives you funds in exchange for an agreed amount of shares in your firm.
You have the freedom to lay down the terms which the investors go through (along with your portfolio) and decide whether to strike a deal with you or not. Remember, the investor is taking more risk, as they are in danger of losing their money if the business fails.
- Rollover business startup
Anyone with $50,000 or more in their retirement fund apply for a rollover for business startup (ROBS). It is the best method for those looking to avoid debts when at the starting stages of their firms.
You’ll, however, need a lawyer and an accountant to handle all the necessary paperwork to transfer these funds from your retirement account to your new firms 401k. This money used to purchase stock in the company. You get your startup capital when the stock sells.
Don’t pull out on your plans because of inadequate finances. These and many other sources can provide you with quick starting capital.
Author Bio: As an account executive, Michael Hollis has funded millions by using alternative financingsolutions. His experience and extensive knowledge of the industry has made him a Merchant Cash Advance ISO expert at First American Merchant.