Small Business Funding
Small Business Funding

Investing in your own future by starting a business can be a significant financial outlay. Fortunately, there are several common funding options that may be available to you. Utilizing some cash, or similar liquid funds is common, but most new businesses rely on secured and unsecured financing, or leveraging their retirement accounts tax-free for much of their investment.

Programs include SBA loans, home equity lines of credit, unsecured business lines of credit and even retirement rollovers.
Funding Options:

Here are some funding options we can help you with.

1. Own Funds - Most of the business owners invest in a business with their own funds drawing from their savings accounts. Some even use funds from retirement accounts to fund their business. Please contact your CPA to know more about that.

2. Business Loans - Some only have enough money to put a down-payment and rest can be financed.

We can help you with different funding options to fund your business such as ;

a) We can help you get SBA loans if your business and your credit history can qualify for the requirements

c) We can connect you with lenders who can finance your new franchise

d) You can borrow money from your 401K and Retirement plans to start a franchise also. Please consult your Financial Planner or Tax Advisor on this.

 Leverage Financing - Some business savvy investors finance the business even if they can afford to pay it in full to take advantage of the leverage  and get better returns. Here is the example how it works:

Example: Let us say you need $400K to invest in a business which generates a Net income of around $200K per year. 

 Scenario 1: In this situation, let us say you funded the full project cost of $400K with your own funds. In that situation, your Rate of Return is $200/$400 = 50% and your Investment Recovery Time will be $400/$200 = 2 years

 Scenario 2: In this situation, let us say that you only put down payment of 30% of the investment = 30% x $400K = $120K and rest ($280K) you financed @ 5% interest, so it costs you around $280K x 5% = $14,000/yr. In this situation, your Rate of Return is ($200K - $14K) / $120K = 155% and and your Investment Recovery Time will be $120K/($200K-$14K) = 0.65 years. But be aware that you still owe $280K to the lender.

As you can see from both of these scenarios, your Rate of Return and Recovery Times are drastically reduced by taking the leverage (loan). This way an investor can open a bigger business or expand the existing one with the same money. But this carries the leverage risk and you need to be cognizant of that.

3. Investors / Partners - Some wealth investors who have money but don't have time to run a business can either lend the money or can become equity partners in your business. We can help you match up with such investors / partners.

What ever be the funding method you choose, we can help you with that process. For a complete listing of lenders and programs, please contact us today.

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