10 Ways -'Debt' Can Help Finance Your Venture Startup

Asset One Funding www.weclozloans.com Financing Made Simple 10 Ways 'Debt' Can Help Finance Your Venture Startup "DEBT IS DEFINED AS THE COMMON-LAW ACTION FOR THE RECOVERY OF MONEY HELD TO BE DUE." -Merriam-Webster DEBT HAS ADVANTAGES OVER SELLING EQUITY IN A COMPANY TO INVESTORS, AS ONCE YOUR DEBT IS REPAID YOU REAP ALL THE REWARDS OF THE SEEDS YOU HAVE SOWN. WHEN IT COMES TO FINANCING PROSPECTIVE BUSINESS ENDEAVORS, IT IS ESSENTIAL TO HAVE A COMPREHENSIVE UNDERSTANDING OF ALL YOUR AVAILABLE OPTIONS. THE FOLLOWING DEMONSTRATIONS HIGHLIGHT 10 WAYS TO FINANCE A STARTUP COMPANY, USING DEBT INVESTMENT STRATEGIES, RATHER THAN EQUITY SOLUTIONS. 1. L. CREDIT CARDS 2. ROLLOVERS AS BUSINESS STARTUPS" (AKA. “ROB") 40% 40% OF BUSINESS OWNERS HAVE USED BUSINESS CREDIT CARDS TO FINANCE THEIR STARTUP. AN ESTIMATED 60% OF FRANCHISES ARE LAUNCHED WITH 60% RETIREMENT ROLLOVER MONEY. CREDIT CARDS ARE A POPULAR FINANCING OPTION FOR MOST STARTUPS, MAINLY DUE TO THEIR APPEAL OF: ROBS ARE A SPECULATIVE FORM OF FINANCING FOR UP-AND-COMING VENTURES. “NO COLLATERAL REQUIRED." 40 IK 40100 FUNDS TO FINANCE THEIR STARTUP COSTS. FOR THIS METHOD, PROSPECTIVE BUSINESS OWNERS TAP INTO THEIR CREDIT CARDS COME WITH LIMITED FUNDING 10,000 SMALL BUSINESSES IN THE US ALONE, AN ESTIMATED 10,000 SMALL BUSINESSES AND FRANCHISES HAVE BEEN LAUNCHED NATIONWIDE WITH RETIREMENT MONEY HOW MUCH MONEY YOU'RE ABLE TO GLEAN FROM A CREDIT CARD IS LARGELY A FUNCTION OF YOUR CREDIT STANDING AND INCOME. POORLY-MANAGED, CREDIT CARD FINANCING CAN RESULT IN: I DAMAGED CREDIT PROFILES I HIGH ACCRUAL OF INTEREST I INABILITY TO SEPARATE PERSONAL/BUSINESS CREDIT I MISSED TAX BENEFITS ON AVERAGE, HALF OF ROB STARTUPS WERE ABLE TO FINANCE THEIR INVESTMENTS BY USING ONLY A PORTION OF THEIR RETIREMENT PLANS AND ONE-THIRD TAPPED INTO ONLY 10%- 30% OF THEIR ASSETS. FOR EVERY $1,000 INCREASE IN CREDIT CARD DEBT, A STARTUP'S SUCCESS RATE DECREASES BY MORE THAN 2%. THE MAJOR BENEFIT OF ROBS IS THE FACT THAT THEY DO NOT OPERATE ON A DEBT MODEL. THIS ALLOWS A STARTUP TO INVEST WITHOUT: CREDIT CARD DEBT IS ALSO EXPENSIVE: THE AVERAGE INTEREST RATE FOR A BUSINESS CARD IS ABOUT 15%. I PAYING INTEREST I MAKING PAYMENTS I HAVING A PAYBACK WINDOW. 3. 4. TRADE CREDIT (AKA. "VENDOR CREDIT") EQUIPMENT FINANCING 3.9% A RECENT EQUIPMENT LEASING AND FINANCE ASSOCIATION SURVEY SHOWS A 3.9% GROWTH IN EQUIPMENT FINANCING ACTIVITY SINCE 2009. 47% OF STARTUP BUSINESSES SEEK TRADE CREDIT 47%) AS THEIR DEFAULT, FINANCING OPTION. EQUIPMENT FINANCING IS ESPECIALLY PERTINENT IF YOUR STARTUP COMPANY REQUIRES: THIS METHOD OCCURS WHEN A COMPANY EXTENDS CREDIT TO YOUR FRANCHISE; MODERATE AND/OR SIGNIFICANT INVENTORY OF EQUIPMENT. ALLOWING YOU TO BUY THEIR PRODUCTS AND SERVICES UPFRONT, WHILE DEFERRING PAYMENT FOR A LATER DATE. WHEN STARTUP BUSINESSES CANNOT AFFORD THE NECESSARY EQUIPMENT/DEVICE ASSETS, THEY CAN EITHER: THERE IS A COST CAVEAT TO TRADE CREDIT FINANCING: OPT FOR AN EQUIPMENT LOAN THAT IS SECURED DIRECTLY BY THE EQUIPMENT VENDOR. OPT FOR AN EQUIPMENT LEASE, RATHER THAN FULLY-COMMITTING TO A PURCHASE. YOU ABSORB A HIGHER PURCHASE PRICE, ALONG WITH THE ACTUAL COST OF TRADE CREDIT. OR FIRMS THAT OFFER TRADE CREDIT IMPLEMENT A CREDIT POLICY, AND ON AVERAGE OPERATE ON TRADE TERMS OF: 2/10, NET 30 ON AVERAGE, AN EQUIPMENT LOAN CAN OFFER UP TO 100% FINANCING, AND LENDERS MAY BACK 80% TO 90% OF FINANCING. THIS MEANS THAT THE SUPPLIER OFFERS A 2% DISCOUNT IF YOU PAY YOUR BILL 100% IN 10 DAYS. 20% BUSINESSES GENERALLY PAY UP TO 20% OF THE EQUIPMENTS COSTS, AND RESPONSIBLE FOR LOW-FIXED INTEREST RATES. HOWEVER, FORFEITING THAT DISCOUNT AND OPTING FOR THE 36% ADDITIONAL 20-DAY COVERAGE CAN INCUR AN ESTIMATED 36% OF THE TOTAL COST OF PURCHASE ITEMS. ON AVERAGE, EQUIPMENT LEASING OFFERS: ADDITIONALLY, INTEREST RATE ON MOST TRADE CREDIT FAR EXCEEDS THAT OF BANKS AND OTHER FINANCIAL INSTITUTIONS, I LOWER LOAN PAYMENTS I NO DOWN PAYMENTS/UP FRONT FEES I 100% FINANCING I LOW MONTHLY PAYMENTS W/ INTEREST FOR THE LEASE TERM 12-24% BY AS MUCH AS 12-24% IN ANNUALIZED INTEREST! 5. 6. HOME EQUITY LINE OF CREDIT/HELOC SBA LOAN (AKA. “SBA" IN RECENT YEARS, AN AVERAGE OF $50 MILLION OF SBA LOANS WERE PROVIDED TO U.S. SMALL BUSINESSES, PER DAY! IN 2012, HELOC ACCOUNTED FOR $554 BILLION WORTH OF BANK EQUITY. $50 MILLION OF SBA LOANS PER DAY A HOME EQUITY LINE OF CREDIT CAN BE USED BY STARTUPS WHO SUPPLEMENT A LINE OF CREDIT FROM THEIR HOME EQUITY AS COLLATERAL FOR BASIS OF REPAYMENT. THE SMALL BUSINESS ADMINISTRATION IS A U.S. GOVERNMENT AGENCY THAT PROVIDES FINANCIAL SUPPORT TO ENTREPRENEURS FOR THEIR STARTUP BUSINESSES. SBA SOME BANKS OFFER HOME EQUITY LINES OF CREDIT THAT ALLOW UP TO 75% OF THE APPRAISED VALUE OF YOUR HOME. 75% DEPENDING ON THE SBA-LOAN LENDING PROGRAM, $35.000 - A STARTUP VENTURE CAN BE APPROVED FOR A LOAN THAT RANGES ANYWHERE BETWEEN: $750,000 20%-60% SBA LOANS DO CARRY HIGHER ANNUAL INTEREST RATES, AVERAGING BETWEEN 20% TO 60%. THESE LOANS ARE DISTRIBUTED UPON A SET “TERM"PERIOD OF REPAYMENT, AND CAN EITHER BE MET WITH: A FIXED INTEREST RATE LEFT AS A VARIABLE RATE, OR ADDITIONALLY, THOSE ELIGIBLE FOR SBA LOANS MUST MEET SPECIFIC, SBA-DEFINED REQUIREMENTS, SUCH AS: I COLLATERAL I SOLID CREDIT I INDUSTRY EXPERIENCE I WELL-DEFINED, VENTURE LAYOUT. DEPENDING ON THE PRIME LENDING RATE AGREEMENTS. 7. 8. CONTRACT FINANCING PEER TO PEER LOAN (CAKA. “P2P") THIS IS A RELATIVELY NEW FINANCING OPTION, AND OFFERS LOANS TO STARTUP BUSINESSES THAT ARE EITHER: 4% AN ANNUAL 4% OF STARTUP VENTURES RELY ON P2P FINANCING METHODS. CONTRACTED TO PROVIDE GOODS/SERVICES AND/OR IN THE NEGOTIATING STAGES OF CONTRACT SETTLEMENT. P2P LOANS DIRECTLY LEND NON-COLLATERAL FUNDS TO INDIVIDUAL BORROWERS. ADVANCES ARE MADE TO YOUR BUSINESS AGAINST INVOICE NEW OR OUTSTANDING INVOICES TO PROVIDE THIS EXCHANGE IS TYPICALLY EXECUTED ONLINE, VIA PEER-TO-PEER LENDING SITES THAT EMPLOY: IMMEDIATE ACCESS TO CASH. MULTIPLE LENDING PLATFORMS AND CREDIT CHECKING TOOLS. ON A 24-HOUR AVERAGE, YOU ARE GIVEN: 70% – 90% OF THE INVOICE VALUE. P2P LOANS ARE MET WITH: HIGH CLOSING COSTS AND EVEN HIGHER APYS, THIS IS ONE OF THE QUICKEST WAYS TO ACQUIRE WORKING CAPITAL, WITHOUT RESORTING TO: MAKING THIS A MORE EXPENSIVE FINANCING OPTION FOR STARTUP VENTURES. EQUITY LENDING OR TYPICAL LOAN OPTIONS. ADDITIONALLY, REPAYMENTS ARE MORE FLEXIBLE, PCP INTEREST RATES, HOWEVER, ARE SIGNIFICANTLY LESS THAN STANDARD BANK LOANS. ADDITIONALLY, PCP LOANS PROVIDE AN ADDED BENEFIT OF: AND VOLUME AMOUNT CAN BE TAILORED TO YOUR VENTURE'S SPECIFICATIONS FASTER TRANSFER AND ACCESS OF FUNDS, DUE TO THE NATURE OF ONLINE TRADING PLATFORMS. BEFORE MONETIZING A CONTRACT, LENDERS MUST FIRST EVALUATE: EXISTING CONTRACT TERMS AND BORROWER'S CREDITWORTHINESS. 9. 10. FAMILY/FRIENDS BOOTSTRAPPING 2.6 % OF STARTUP BUSINESSES RELY SOLELY ON FINANCING ASSISTANCE FROM FAMILY/FRIENDS. * 70% MORE THAN 70% OF THE NATION'S STARTUPS USE PERSONAL SAVINGS OR ASSETS AS A PRIMARY SOURCE OF FUNDING WHEN STARTING A BUSINESS. IF THE OPPORTUNITY TO OBTAIN FINANCING ASSISTANCE FROM FAMILY AND FRIENDS IS VIABLE, THE FOLLOWING MAY BE MET WITH MORE LENIENCY THAN STANDARD BORROWING OPTIONS: "BOOTSTRAPPING' REFERS TO A BUSINESS VENTURE THAT DOES NOT UTILIZE: I REPAYMENT TERMS I LOWER INTEREST RATES I AN EXTENDED PERIOD OF REPAYMENT. EXTERNAL ASSISTANCE AND/OR CAPITAL. BOOTSTRAPPING CAN BE A COST-EFFECTIVE, VENTURE OPTION, PARTICULARLY IF THE FOLLOWING RESOURCES ARE EMPLOYED: HOWEVER, SOME OCCASIONS MAY CALL FOR FIXED LENDING TERMS, AND A BORROWER'S INABILITY TO EFFECTIVELY MEET PAYMENTS CAN BE A RECIPE FOR DISASTER. I SAVINGS I AN EARLY CASH FLOW I MONEY-SAVING TECHNIQUES THIS FINANCING METHOD SHOULD GENERALLY BE AVOIDED, UNLESS THERE IS A DEFINITIVE, AVAILABLE RESOURCE FOR REPAYMENT. FOR ENTREPRENEURS WHO ARE INTERESTED IN LEARNING MORE ABOUT YOUR VENTURE FINANCING OPTIONS, VISIT WWW.WECLOZLOANS.COM AND FIND A CAPITAL-LENDING METHOD THAT IS TAILORED-SUITED FOR YOUR NICHE! 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