Raising Money for Your Home Business Cedar Falls IA

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Waterloo Residential Facility
(319) 291-2093
310 E 6th St
Waterloo, IA

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University of Northern Iowa SBDC
(319) 236-8123
212 E 4th St
Waterloo, IA
 
Uni Regional Business Center
(319) 236-8123
212 E 4th St
Waterloo, IA
 
USA Staffing
(641) 236-9722
1112 West St
Grinnell,, IA
 
Crisis Intervention Services
(641) 673-0336
500 High Ave W
Oskaloosa, IA
 
Score
(319) 236-9878
212 E 4th St
Waterloo, IA

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Emdeon Business Services
(319) 234-4651
Emdeon Business Services
Waterloo, IA
 
Avenues LLC
(641) 676-3253
122 N Market St., Suite1
Oskaloosa, IA
 
Triad Consultant Group
(515) 262-0073
3940 E 29th St Ste 4
Des Moines, IA

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Weidner Consulting
(515) 288-1150
3707 Grand Ave
Des Moines, IA

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Raising Money for Your Home Business

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Initial Funding Options to Consider
By Jim R. Sapp

Where will the money come from to start your business? There are many alternatives, and they all require careful planning. These are some of the first funding options you should consider.

Personal Assets
1. Your Savings Account
The best place to go for initial start-up capital is your own savings account. One suggestion: Put fifty percent of your savings into the company for initial start-up expenses. While this may make you a bit nervous, it is by far the cheapest way to start, and it will demonstrate to others that you have faith in your project. In addition to the blood, sweat, and tears that you’ll put into your business, you have to be willing to invest your own money, too! After all, if you don’t have confidence in your project, why should anyone else? Small business is risky, especially during the first several years. If you don’t have enough money in your savings account, there are other options.
2. Credit Cards
Many businesses that need working capital use credit cards. These cards would be personal lines of credit that you have previously established, and you would give a personal guarantee.
You can increase your credit lines if you don’t miss payments, and if you pay at least the minimum on time. You can sometimes take advantage of special promotions to get a favorable rate. Some cards offer a low interest rate—at or below the U.S. Prime rate—for six months. Then the rate moves up considerably, sometimes to as high as twenty-one percent. But those six months at U.S. Prime are at a better rate than any lender will offer a new or expanding company. Use the card for the six-month period, pay it off, and move on. If you need to find some offers, watch your mail for solicitations, check the Internet, or look in business magazines for credit-card fliers.

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3. 401(k) or Keogh Retirement Plan
If you have left a position and have a retirement plan through your old company, you may be able to borrow against it at some value. You are basically borrowing your own money, but the rates are usually reasonable.
If you borrow against your retirement plan, don’t take money out of the plan permanently. There are large penalties, and the taxes on the pullout are very severe. Taxes and penalties can wipe out a high percentage of your retirement plan's value if you withdraw all of your money before you turn the required age.
4. Life Insurance
Your insurance policy may be another good option, especially if you have a whole life policy with a sizeable cash surrender value. Call your insurance agent for the details of your policy. Every policy is a bit different, but you may be able to withdraw the majority of your cash for a good rate with no underwriting.
5. Second Mortgage Line of Credit
If you own a home, you may be able to get a second mortgage and use the money for your business. Some lenders will offer the line of credit only for a specific use; however, many l...

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