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Use your own assets to fund your business (New Business Checklist)

Money may not buy happiness, but it sure will help you get your new business off the ground.

Unfortunately, finding outside money for a new business isn't easy. Banks are notoriously reluctant to lend money for startups. Typically, you'll need to show at least two years of profitability to win a conventional bank business loan. To get their businesses going, most small business owners start out by relying on their own assets. Here are some options to consider:

  • Use your savings.

  • Take a loan against the equity you've built up in your home. You have two options. You can either get a home equity loan or a home equity line of credit. But one grave drawback: if you default on payments, you could lose your home.

  • Sell some investments.

  • Sell some assets.

  • Borrow against your 401(k).

  • Apply for a grant.

  • Get credit card advances.

    Note: Use this option carefully. The money is easy to get, but it comes with a hefty price tag of high interest rates.

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