The moment the word business comes to mind, what follows? It is definitely the source of funding. And while you could be having some savings, you cannot always have everything put together. This means the need for more funding will be there very often.
Lack of funding is one of the many reasons business hardly survive into the fourth year. On the other hand, finding a reliable source of funding can be an uphill task for most entrepreneurs. In fact, a majority of the business startups hardly have a mere .05% to help them navigate through their venture.
However, this should not deter any potential and budding entrepreneur from getting into the business. This is because there are a dozen ways to access funding. The only surprising thing is how entrepreneurs tend to forego some of the cheapest ways of accessing funds.
Let us explore some of the common ones: –
- Home Equity Line of Credit
This is all about borrowing money while attaching the value of your home. The more the value the more the amount. Apparently, it comes with much lower interest rates compared to other options.
HELOC, as it is commonly referred to, is ideal for the startups as the business owners figure out the monthly financial needs for the business.
An additional advantage is that the borrowers do not have to take all the amount equivalent to the home’s value. They can do so partially and take the rest as the need arises. There is also the possibility of having reduced tax on the interest payment.
- Cash-out refinance
The product may not be as superior as HELOC but it is worth exploring. Unlike in HELOC where you can obtain credit in bits, Cash-out-refinance exposes you to a one-time loan. It comes in handy for young entrepreneurs whose homes hardly have any tangible value. Nonetheless, it is still a better option compared to other loans and credit cards out there.
Meanwhile, despite having these easy – to – access options, there is the need to carefully weigh other options. Ensure you exclusively speak to the lender making that final move.
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