Using personal money in your business can address funding needs but can also create unnecessary risk and potential tax consequences if not done correctly. Here are the four steps to follow when using personal funds in your business: 1. Establish a Business Checking Account One of the most important things a small business owner should…
Revenue-based Financing: How a Revenue-based Loan Works
Revenue-based financing (RBF) is a type of small business loan offered by niche lenders in which your monthly payments increase or decrease based on your revenue. RBF works well for businesses that have stable revenue streams but don’t have the collateral needed for a traditional loan. Lenders charge a fixed amount, typically between 1.35x to…
How To Get SBA Startup Loans in 6 Steps
Obtaining a Small Business Association (SBA) startup loan requires several steps and doing some homework before applying. Startup businesses are deemed higher risk because of historical failure rates that can reach as high as 50% within five years. As a result, SBA startup loans may require a larger down payment and additional collateral to get…
6 Best Rollover for Business Startups (ROBS) Providers for 2021
A rollover for business startups (ROBS) is a financing solution that lets you start or purchase a business with your retirement savings without paying taxes or early withdrawal penalties. Because of the compliance requirements and complexity involved in doing a ROBS, we recommend using an experienced ROBS provider. We have compared the best ROBS providers…
Rollover for Business Startups (ROBS): Ultimate Guide 2021
A rollover for business startups (ROBS) allows you to invest funds from an existing 401(k) or individual retirement account (IRA) into your business without paying early withdrawal penalties or taxes. A ROBS is not a business loan nor a loan from your 401(k), which means there are no interest payments to make or debt to…
Using a Home Equity Loan to Finance Your Business
Taking out a home equity loan (HEL) to finance your business is easier than getting traditional startup business loans. Individuals with equity in their home and strong personal credit can use a home equity loan for large one-time expenditures or other capital influx needs in the business. If you are considering using a home equity…
How to Use a 401(k) to Start or Buy a Business
There are three ways you can use 401(k) business financing to start or buy a business. You can cash out funds, borrow against them, or use a rollover for business startups (ROBS). The only option that does not result in penalties, taxes, or interest charges is a ROBS, making it ideal for most situations. If…
Credit Card Stacking & Using It to Fund Your Startup
Credit card stacking is the practice of applying for multiple credit cards at the same time to access a larger unsecured line of credit. Once approved, you can use your stack of credit cards to finance a startup, small business, or real estate deals. This works as an alternative working capital funding source for businesses….
10 Eye-opening Crowdfunding Statistics 2020
Crowdfunding is a popular method of raising funds for startup business expenses, charities, and personal causes. While funding isn’t guaranteed, crowdfunding statistics show us that a strong pitch and continued communications throughout your campaign can increase your chances of success. The ten most eye-opening crowdfunding statistics are:
What Is a Convertible Note? Examples & How It Works
A convertible note is a short-term debt that has an interest or discount rate, a valuation cap, and a maturity date. Investors use convertible notes to invest in startups in the early stages of development. Investors can choose to convert convertible notes into preferred shares on a specific date or event. What Is a Convertible…
Series A, B, C & D Funding Rounds Explained
Series A, B, C & D investments represent the first funding rounds that startups receive from investors. Each round involves the issuance of preferred stock sold to investors by a startup, with subsequent letters representing subsequent rounds. Startups use these funding rounds to hire staff, launch products, and market to customers. What Series A, B,…
Startup Business Loans 2020: The 12 Best Ways to Fund Your Startup
Qualifying for a business loan as a startup can be difficult. Entrepreneurs often need to utilize multiple financing sources to get their new startup off the ground. Startup business loans can take many forms, including SBA loans, angel investment, or Rollovers for Business Startups (ROBS), and each is unique in what they offer to startups….