Financing Your Small Business

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					                          11

Financing Your Small Business
120                  Making the Jump


Debt Financing




Home Equity Loans




      Home Equity Loan.
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Home Equity Line of Credit.
122                   Making the Jump




Key Considerations:




Small Business Administration (SBA) Loans

                guarantees
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       Sound business model.

       Down payment.

       Credit score.




       Other collateral.


    Keep in mind: If you need capital quickly, SBA-guaranteed
loans can take up to 90 days to process.



Key Considerations:
124               Making the Jump




Unsecured Loans
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Key Considerations:
126         Making the Jump




percent).
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Peer-to-Peer Loans




                why
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Key Considerations:




Retirement Plans: A Nontraditional Source
of Capital
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                          investment




The Basic Steps




                  your company.
130                    Making the Jump




                                                  invests in the
                                    In return, your company is
      able to use those funds to purchase a business or franchise,
      cover its day-to-day operations, and so on.




The Pros and Cons




      Your retirement funds can grow in a variety of
      ways.
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         You can make future contributions.



         You can receive profit sharing and contribution
         matching,




                                                           no
debt




       But on the other hand



         You must believe strongly that the business will
         succeed.

         You should consider using less than 100 percent of
         your retirement funds.




         You must believe strongly in your ability to lead the
         business, since
132                       Making the Jump




                                        However, depending on the
amount of money you would otherwise finance through traditional
lending vehicles, that cost may still be lower than application and
origination fees for home equity or unsecured loans.




Layered Financing


                    for           against you.




                             It can all snowball out of control if you
don’t take the first step carefully and wisely.
              11: Financing Your Small Business       133


Q&A


funds into a 401(k)?

                                             cannot




                                                        -
tion if I want to invest retirement funds?




payment for an SBA loan?
134                 Making the Jump




 Is investing my retirement funds legal, and what does
the IRS think about this strategy?




                                                     -
ing vehicle?




                   home equity loans


                                        SBA-guaranteed
loans
         11: Financing Your Small Business       135




                             unsecured loans




                             Peer-to-peer loan




                  you.

Investing Retirement Funds:
Paul’s Story




                                                 -
136                     Making the Jump




 began offering US Cellular there, too.



 almost as much as the mini-storage facilities.
                                                  -




                                                  -
                                                  -
 ment in his future.

				
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