it's the major hurdle every new
entrepreneur faces time and time again
raising money you've got a great
business idea but how the heck do you
get it off the ground hi there I'm David
Waring and I'm the co-founder of fin
small business calm in this video I'm
going to show you nine ways to fund your
startup by the end of the video you'll
know which option suits your needs and
how to increase your chances of getting
funding so stick around startup
financing option number one get an SBA
start up line traditional bank loans and
SBA loans are generally the most
difficult and slowest way to get money
for your business to get an SBA loan for
your startup you will generally need a
high net worth real estate with equity
that can be used as collateral for the
loan an airtight business plan and a
credit score above 700 if you meet all
these qualifications congratulations
that's difficult to achieve you're
likely a good fit for the Small Business
Administration's community advantage
program and micro loan program the SBA's
Community advantage program let your
startup bar up to two hundred and fifty
thousand dollars and the micro loan
program provides smaller loans of up to
$50,000 entrepreneurs who qualify for
these programs have invested at least
30% of their own money in the business
and have relevant management and
industry experience startup financing
option number two Rob's the best-kept
secret for funding a business is a
rollover for business startups or Rob's
Rob's allow you to invest funds from
your retirement account into your new
business without paying early withdrawal
penalties or income taxes essentially
you are buying stock in your company
with funds from your 401k and holding
that stock inside your retirement
account
Rob's are best for people who have at
least $50,000 in their retirement
account you can find out more about
Rob's and how they've helped
entrepreneurs invest over three billion
dollars into their businesses in our
ultimate guide to rollover for business
startups startup financing option number
three home equity loans and lines of
credit did you know home equity loans
and lines of credit are used by 25
percent of US small business
to fund their business that's because
home equity loans and lines of credit
allow you to leverage the equity in your
home to borrow money for your business
because the loan is backed by your home
this is generally the lowest interest
rate financing option for startups home
equity loans and lines of credit are
best for people who have more than 15%
equity in their homes and a credit score
above 620 if you meet these
qualifications I highly suggest reading
our article should you use a home equity
loan or line of credit to finance your
business startup financing option number
for credit cards
37% of small business owners use credit
cards to finance their business credit
cards offer you a lot more flexibility
than other forms of finance plus you can
earn cash back and rewards when you
charge purchases to the card that's
basically free money using credit cards
to finance your business can be tricky
that's why we created a guide to help
you choose the right card along with
tips on how to use credit card financing
responsibly give it a read startup
financing option number five micro loans
from nonprofit lenders nonprofit lenders
our mission based organizations that
give out loans to people from
disadvantaged communities these are
great for startup business owners who
don't have great credit or a lot of
other options to get a micro loan you
should be prepared to have a cosigner or
show a significant source of income
independent of your business like a
full-time job or spousal income if micro
loans seem like a viable option for you
read our article what is a micro loan
and how can your small business benefit
startup financing option number six
loans from a peer-to-peer site before
Kickstarter and fundable campaigns
invaded your Facebook feed p2p loans
were the way to get financing from
strangers p2p lenders enable borrowers
to get a three to five year loan by
filling out a loan application online
and finding investors willing to lend
them money if you qualify you can get up
to $50,000 in just two weeks now getting
a p2p loan depends entirely on the state
of your personal finances and credit
score if your credit score is above 700
you should consider a p2p loan you can
find out more about the pros and cons of
p2p loans
article can appear to Pirlo and provide
funding for your business startup
financing option number seven borrow
money from friends and family family
members and friends who like your
business idea may be willing to lend you
funds sure it may feel awkward but you
can put their doubts at ease with a
stellar business plan and a promissory
note the promissory note is a legal
document that business owner signed to
formalize borrowing money from their
friends or family if you want to know
more about how to write a promissory
note read our article how to make a
promissory note to fund your small
business in addition to showing you how
to make a promissory note we'll talk
about the issues you need to understand
before borrowing money from friends and
family thrown up financing option number
eight crowdfunding our second to last
fundraising method has become one of the
most popular ways to fund a business
debt-free crowdfunding is when you focus
on raising small amounts of money from a
large number of people platforms like
fundable Kickstarter IndieGoGo and
rocketHub connect entrepreneurs products
with the world crowdfunding works best
for startups with visually appealing
consumer products think tech gadgets
apparel and food and beverage products
if this sounds like your startup I
highly recommend reading how to
crowdfund your business before launching
your own crowdfunding campaign startup
financing option number nine raising
money from angel investors and venture
capitalists venture capital generally
comes from a company or firm
whereas angel investors are usually
wealthy individuals acting on their own
with both angel investors and VCS
you can raise money debt-free but it's
important to establish upfront and
contractually how much control they will
have in your company if you have a solid
business plan with financial projections
and you're confident that your business
can provide a 10times return on
investment angel investors or venture
capital might be right for you if you
want to move forward with any of the
financing methods we've covered in this
video we've created a start-up funding
essentials kit with everything you need
to know to increase your chances of
getting funding you can download our
free startup funding essentials kit
right here I'm still here did you get it
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