There comes a point in time in our business career where we need some start up capital. The capital may be necessary to join a network marketing / direct sales business or to start an Internet business. It may be needed to grow our business. We may need to assist a prospect that would like to join our business with ideas on how to come aboard.
In any event, here are some ideas you can use yourself or help others who would like to go into business with you.
Keep in mind that all these options assume you have a strong conviction about the business you are building and that you have committed 110% to its success both in the short term and in the long term.
1. 401k plan. Has a loan provision plan. Takes about 1 week to get a check cut. Every employee automatically qualifies. Can borrow up to half of the value of the 401k and the interest rate is only about 6 to 8%. You pay the interest rate back to yourself until the loan is paid off. Contact the Human Resources department at your company for details.
2. Establish a margin account with the brokerage firm that holds any securities you may own. i.e. stocks, bonds, etc. You’re borrowing money against your own securities and it doesn’t require an approval process. Interest rate is approximately 7 to 8% and you can pay this loan off any time you’d like. Contact your brokerage firm and request the margin paperwork. Usually, you can get this check cut within 2 to 3 days.
3. Pull money out of a CD. Yes, there would be a penalty but wouldn’t those funds be more useful helping your grow your business?
4. Credit Unions: they’re non-profit which means they offer their services at cost. Anyone can apply to become a member. Some will allow you to quickly apply for a loan once you become a member. They tend to be easier and more lenient than banks when it comes to loans. You can get an unsecured loan that would just require a signature. You can also apply for a personal line of credit and depending on your credit score, you can receive up to $10,000 very quickly. The credit union typically doesn’t even care what you spend it on. They will let you bring in a co-signer if your credit is not good and interest rates will run from 9 – 12%.
5. Retirement Accounts (IRAs): They are pretax structures and you might be charged a 10% penalty for early withdrawal.
6. Reach out and borrow from a family member who believes in you. Arrange to pay back the money in 12 months or less. Offer to pay a certain percentage a month with the opportunity to pay the loan back early with no penalty.
7. Title Loan on a Vehicle: will pay between 10 – 20% interest but can access the funds quickly.
8. Sell something you own of value. Is your business success worth the short-term sacrifice?
9. Home Equity Loan: you can get a line of credit on your home. You can pull funds out any time you want and can get up to 70 – 90% of the value of your home.
10. Personal Line of Credit: apply at your bank. Funds can be transferred directly to your checking account. Depending on your credit and how long you’ve been doing business with your bank, you can receive up to $20,000.
11. Cash in a Life Insurance policy: call your insurance agent and get the phone number for the insurance company’s headquarters. Call them and ask how much has accrued on the policy. All you’ll have to do is sign some paperwork. It will take up to 5 to 7 days to receive funds. When you have cash value in the policy, you can borrow a certain percentage of the accrued amount.
These are just a few ideas on how to creatively find start up capital for your business or its growth. What other ideas not mentioned here have worked for you?
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