Best of the Week
Most Popular
1. Dollargeddon - Gold Price to Soar Above $6,000 - P_Radomski_CFA
2.Is Gold Price On Verge Of A Bottom, See For Yourself - Chris_Vermeulen
3.Dow Stock Market Trend Forecast 2018 - Nadeem_Walayat
4.Gold Price to Plunge Below $1000 - Key Factors for Gold & Silver Investors - P_Radomski_CFA
5.Why The Uranium Price Must Go Up - Richard_Mills
6.Dow Stock Market Trend Forecast 2018 - Video - Nadeem_Walayat
7.Jim Rogers on Gold, Silver, Bitcoin and Blockchain’s “Spectacular Future” - GoldCore
8.More Signs That the Stock Market Will Rally Until 2019 - Troy_Bombardia
9.It's Time for A New Economic Strategy in Turkey - Steve_H_Hanke
10.Fiat Currency Inflation, And Collapse Insurance - Raymond_Matison
Last 7 days
Gold – “Make Me Feel Good…Tell Me Anything” - 25th Sept 18
Sector Rotation Continues. Bullish for Stocks - 25th Sept 18
Whose Trillion is it Anyway? US Federal Government Shocker! - 25th Sept 18
Focus on the Stock Market’s Price Action and Ignore the Failed Hindenburg Omen - 25th Sept 18
5 Problems All Restaurant Owners Will Face - 25th Sept 18
Gold Price Trend Forecast 2018 - Video - 25th Sept 18
How the US Dollar Penalizes Emerging Asia - 24th Sep18
Stock Market Macro/Macro View: Waves and Cycles Part II - 24th Sep18
DJIA Makes New High  - 24th Sep18
Gold Price Trend Forecast 2018 - 24th Sep18
The Stock Market Has Been Exceptionally Strong this September. What’s Next for Q4 2018 - 24th Sep18
Gold / US Dollar Inverse Trend Relationship Video - 23rd Sep 18
US and Global Stocks, Commodities, Precious Metals and the ‘Anti-USD’ Trade - 23rd Sep 18
Gerald Celente Warns Fed May Bring Down the Economy, Crash Markets - 23rd Sep 18
Top 3 Side Jobs for Day Traders - 23rd Sep 18
Gold Exodus to Reverse - 22nd Sep 18
Bitcoin Trader SCAM WARNING - Peter Jones, Dragons Den Fake Facebook Ads - 22nd Sep 18
China Is Building the World’s Largest Innovation Economy - 21st Sep 18
How Can New Companies Succeed in the Overcrowded Online Gambling Market? - 21st Sep 18
Golden Sunsets in the Land of U.S. Dollar Hegemony - 20th Sep 18
5 Things to Keep in Mind When Buying a Luxury Car in Dubai - 20th Sep 18
Gold Price Seasonal Trend Analysis - Video - 20th Sep 18
The Stealth Reason Why the Stock Market Keeps On Rising - 20th Sep 18
Sheffield School Applications Crisis Eased by New Secondary Schools Places - 20th Sep 18
Precious Metals Sector: It’s 2013 All Over Again - 19th Sep 18
US Dollar Head & Shoulders Triggered. What's Next? - 19th Sep 18
Prepare for the Stock Market’s Volatility to Increase - 19th Sep 18
The Beginning of the End of the Dollar - 19th Sep 18
Land Rover Discovery Sport 'Approved Used' Bad Paint Job - Inchcape Chester - 19th Sep 18
Are Technology and FANG Stocks Bottoming? - 18th Sep 18
Predictive Trading Model Suggests Falling Stock Prices During US Elections - 18th Sep 18
Lehman Brothers Financial Collapse - Ten Years Later - 18th Sep 18
Financial Crisis Markets Reality Check Now in Progress - 18th Sep 18
Gold’s Ultimate Confirmation - 18th Sep 18
Omanization: a 20-year Process to Fight Volatile Oil Prices  - 18th Sep 18
Sheffield Best Secondary Schools Rankings and Trend Trajectory for Applications 2018 - 18th Sep 18
Gold / US Dollar Inverse Correlation - 17th Sep 18
The Apple Story - Trump Tariffs Penalize US Multinationals - 17th Sep 18
Wall Street Created Financial Crash Catastrophe Ten Years Later - 17th Sep 18
Trade Wars Are Going To Crash This Stock Market - 17th Sep 18
Why Is Apple Giving This Tiny Stock A $900 Million Opportunity? - 17th Sep 18
Financial Markets Macro/Micro View: Waves and Cycles - 17th Sep 18
Stock Market Bulls Prevail – for Now! - 17th Sep 18
GBPUSD Set to Explode Higher - 17th Sep 18
The China Threat - Global Crisis Hot Spots & Pressure Points - 17th Sep 18 - Jim_Willie_CB

Market Oracle FREE Newsletter

Trading Any Market

3 Ways to Fund your Startup Business Idea

Companies / SME Aug 25, 2018 - 06:05 PM GMT

By: Dylan_Moran

Companies

If you are running a startup business that’s less than a few years old, then you would likely have trouble getting a business bank loan. Even so, there are lots of great ways to finance a startup business and begin your dream business. Here are three ways to fund your startup business idea.


1. Using your Home as Equity
If you own your home and have more than 15% equity - which is calculated using the equation (home value minus mortgage value) divided by home value – then you might be able to get a business loan based on the value of the home. Banks will generally allow you to borrow between 70% and 85% of the value of your home. You get two choices in this regard; a Home Equity Loan (HEL), or a Home Equity Line of Credit (HELOC).

A HEL is basically like a second mortgage, while an HELOC – such as one offered by UnsecuredFinanceAustralia – is like a business credit card where your home is used as collateral. This comes with the advantage of being cheap, with a much lower interest rate than other methods of funding. Don’t forget that your home is on the line though; there’s a real chance that you may lose your home if the business goes under. So be sure you have a great idea and have done all your due diligence about running a business first!

2. Using a Retirement Account (ROBS, BORSA)
It may be possible for you to get funding for your startup by using the money in your retirement account. Effectively, you would be purchasing stocks in your own company using the money from your 401K, and then making those stocks part of your 401K account. If you do this properly, you can take money out of your 401K without having to pay early withdrawal fines and disbursement taxes. If your business is a hit and succeeds, then you’ll get some of the money from the business in relation to your ownership percentage.

There are some disadvantages to this approach, with the biggest being that many retirement plans don’t allow this kind of transaction. You would need to have either a Business Owners’ Retirement Savings Account (BORSA) or a Rollover Business Startup Plan (ROBS). These plans can take a big financial investment of their own to set up and maintain. So be sure to consider your options.

3. A Peer-to-Peer Loan
There are some websites that allow you to borrow up to $35,000 of funding for your startup from strangers through peer-to-peer funding. Prosper and LendingClub are the two biggest such websites. While these sites were originally intended to provide people with 3-5 year loans to pay off credit card debt, they are branching out and beginning to offer small business loans. Just keep mind that you will need a solid credit rating (which will be destroyed if you fail to pay back the loan) and that you may have to pay back between 12-25% per year, depending on the terms of the loan.

Conclusion
While startup businesses are unlikely to claim a bank loan, there are still lots of other ways for them to get the funding they need. Just do a little research, weigh your different options, and choose the right mixture until you have the money you need to start your business.

By Dylan M.

© 2018 Copyright Dylan M. - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2018 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules