Best of the Week
Most Popular
1. Next Financial Crisis Is Already Here! John Lewis 99% Profits CRASH - Retail Sector Collapse - Nadeem_Walayat
2.Why Is Apple Giving This Tiny Stock A $900 Million Opportunity? - James Burgess
3.Gold Price Trend Analysis - - Nadeem_Walayatt
4.The Beginning of the End of the Dollar - Richard_Mills
5.Stock Market Trend Forecast Update - - Nadeem_Walayat
6.Hindenburg Omen & Consumer Confidence: More Signs of Stock Market Trouble in 2019 - Troy_Bombardia
7.Precious Metals Sector: It’s 2013 All Over Again - P_Radomski_CFA
8.Central Banks Have Gone Rogue, Putting Us All at Risk - Ellen_Brown
9.Gold Stocks Forced Capitulation - Zeal_LLC
10.The Post Bubble Market Contraction Thesis Receives Validation - Plunger
Last 7 days
Next Tory Leader, Prime Minister Forecast and Betting Market Odds - 18th Nov 18
The Fed's Misleading Money Supply Measures - 17th Nov 18
Stock Market Outlook: Why the Economy is Bullish for Stocks Going into 2019 - 17th Nov 18
NO DEAL HARD BrExit Tory Chaos, Theresa May Leadership Challenge - 17th Nov 18
Gold vs Several Key Investments - 17th Nov 18
GDX Gold Mining Stocks Q3 18 Fundamentals - 17th Nov 18
Is Gold Under or Overpriced? - 17th Nov 18
Active Managers are Bearish on Stocks. A Bullish Contrarian Sign - 16th Nov 18
Will The Fed Sacrifice Retirement Portfolio Values For The "Common Good"? - 16th Nov 18
BrExit War - Tory Party About to Replace Theresa May for NO DEAL BrExit - 16th Nov 18
Aspire Global Makes Significant Financial Strides - 16th Nov 18
Gold Oil and Commodities …Back to the Future ? - 16th Nov 18
Will Oil Price Crash Lead to “Contagion” for the U.S. Stock Market? - 15th Nov 18
How NOT to Be Among the MANY Stock Investors Fooled by This Market Myth - 15th Nov 18
Tory BrExit Chaos Cripples UK Economy, Wrecks Housing Market Confidence - 15th Nov 18
Stocks Could End 2018 With A Dramatic Rally - 15th Nov 18
What Could Be the Last Nail in This Stock Bull Markets Coffin - 15th Nov 18
Defensive Stock Sectors Outperforming, Just Like During the Dot-com Bubble - 15th Nov 18
Buying Your First Home? Here’s How to Save Money - 15th Nov 18
US Economy Ten Points or Ten Miles to ‘Bridge Out’? - 14th Nov 18
US Stocks: Whither from Here? - 14th Nov 18
Know exactly when to Enter&Exit trades using this... - 14th Nov 18
Understanding the Benefits of Keeping a Trading Journal - 14th Nov 18
S&P 500 Below 2,800 Again, New Downtrend or Just Correction? - 13th Nov 18
Warning: Precious Metals’ Gold and Silver Prices are about to Collapse! - 13th Nov 18
Why the End of the Longest Crude Oil Bull Market Since 2008? - 13th Nov 18
Stock Market Counter-trend Rally Reaches .618 Retracement - 13th Nov 18
How to Create the Best Website Content and Generate Organic Traffic - 13th Nov 18
Why the Stock Market Will Pullback, Rally, and Roll Into a Bear Market - 13th Nov 18
Stock Markets Around the World are Crashing. What Not to Worry About? - 12th Nov 18
Cyclical Commodities Continue to Weaken, Gold Moves in Relation - 12th Nov 18
Olympus Tough TG-5 Camera Stuck or Dead Pixels, Rubbish Video Auto Focus - 12th Nov 18
5 Things That Precede Gold Price Major Bottoms - 12th Nov 18
Big US Stocks Q3 Fundamentals - 12th Nov 18
How "Free Money" Helped Create Sizzling Housing Market & REIT Gains - 12th Nov 18
One Direction More Likely for Bitcoin Price - 12th Nov 18
The Place of HSE Software in Today's Business - 12th Nov 18
Gold Asks: Are US Bonds Overvalued? - 11th Nov 18
Why the Stock Market Will Pullback Before Heading Higher - 11th Nov 18
GDX - Will you Buy This Hated Stock with Me? - 11th Nov 18
Christmas and Halloween LED Dynamic Projector Light Review - 11th Nov 18
Wall Street Veteran: Why I Don’t Lend to Family and Friends - 10th Nov 18
Stocks Breaking Higher, but Resistance Ahead - 10th Nov 18
Stock Market Was Supposed to “Crash Like 1987” - 10th Nov 18
SPX : The Incredibull Stock Market Plays On - 9th Nov 18
USD/CAD – The Moment of Truth Is Coming - 9th Nov 18
Is the Stock Market’s Rally “All Good To Go”? - 8th Nov 18
End in Sight for 'Unloved' Silver - 8th Nov 18
Outlook for Gold & Silver Precious Metals Sector is 'Positive' - 8th Nov 18
A Great Day for Metals as Platinum Price Breaks Out - 8th Nov 18
Future US Interest Rates, Financial Markets, and the FED - 8th Nov 18
Buying an Approved Used Land Rover From a Dealer - What You Need to Know! - 8th Nov 18

Market Oracle FREE Newsletter

Free Online Trading Session

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: This is a Paid Advertorial. 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