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9 Startup Funding Options - Business Loans + More - YouTube
Channel: FitSmallBusiness
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it's the major hurdle every new
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entrepreneur faces time and time again
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raising money you've got a great
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business idea but how the heck do you
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get it off the ground hi there I'm David
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Waring and I'm the co-founder of fin
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small business calm in this video I'm
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going to show you nine ways to fund your
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startup by the end of the video you'll
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know which option suits your needs and
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how to increase your chances of getting
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funding so stick around startup
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financing option number one get an SBA
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start up line traditional bank loans and
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SBA loans are generally the most
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difficult and slowest way to get money
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for your business to get an SBA loan for
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your startup you will generally need a
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high net worth real estate with equity
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that can be used as collateral for the
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loan an airtight business plan and a
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credit score above 700 if you meet all
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these qualifications congratulations
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that's difficult to achieve you're
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likely a good fit for the Small Business
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Administration's community advantage
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program and micro loan program the SBA's
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Community advantage program let your
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startup bar up to two hundred and fifty
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thousand dollars and the micro loan
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program provides smaller loans of up to
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$50,000 entrepreneurs who qualify for
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these programs have invested at least
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30% of their own money in the business
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and have relevant management and
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industry experience startup financing
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option number two Rob's the best-kept
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secret for funding a business is a
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rollover for business startups or Rob's
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Rob's allow you to invest funds from
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your retirement account into your new
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business without paying early withdrawal
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penalties or income taxes essentially
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you are buying stock in your company
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with funds from your 401k and holding
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that stock inside your retirement
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account
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Rob's are best for people who have at
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least $50,000 in their retirement
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account you can find out more about
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Rob's and how they've helped
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entrepreneurs invest over three billion
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dollars into their businesses in our
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ultimate guide to rollover for business
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startups startup financing option number
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three home equity loans and lines of
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credit did you know home equity loans
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and lines of credit are used by 25
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percent of US small business
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to fund their business that's because
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home equity loans and lines of credit
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allow you to leverage the equity in your
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home to borrow money for your business
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because the loan is backed by your home
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this is generally the lowest interest
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rate financing option for startups home
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equity loans and lines of credit are
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best for people who have more than 15%
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equity in their homes and a credit score
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above 620 if you meet these
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qualifications I highly suggest reading
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our article should you use a home equity
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loan or line of credit to finance your
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business startup financing option number
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for credit cards
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37% of small business owners use credit
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cards to finance their business credit
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cards offer you a lot more flexibility
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than other forms of finance plus you can
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earn cash back and rewards when you
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charge purchases to the card that's
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basically free money using credit cards
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to finance your business can be tricky
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that's why we created a guide to help
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you choose the right card along with
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tips on how to use credit card financing
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responsibly give it a read startup
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financing option number five micro loans
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from nonprofit lenders nonprofit lenders
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our mission based organizations that
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give out loans to people from
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disadvantaged communities these are
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great for startup business owners who
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don't have great credit or a lot of
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other options to get a micro loan you
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should be prepared to have a cosigner or
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show a significant source of income
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independent of your business like a
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full-time job or spousal income if micro
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loans seem like a viable option for you
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read our article what is a micro loan
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and how can your small business benefit
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startup financing option number six
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loans from a peer-to-peer site before
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Kickstarter and fundable campaigns
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invaded your Facebook feed p2p loans
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were the way to get financing from
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strangers p2p lenders enable borrowers
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to get a three to five year loan by
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filling out a loan application online
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and finding investors willing to lend
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them money if you qualify you can get up
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to $50,000 in just two weeks now getting
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a p2p loan depends entirely on the state
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of your personal finances and credit
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score if your credit score is above 700
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you should consider a p2p loan you can
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find out more about the pros and cons of
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p2p loans
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article can appear to Pirlo and provide
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funding for your business startup
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financing option number seven borrow
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money from friends and family family
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members and friends who like your
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business idea may be willing to lend you
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funds sure it may feel awkward but you
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can put their doubts at ease with a
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stellar business plan and a promissory
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note the promissory note is a legal
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document that business owner signed to
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formalize borrowing money from their
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friends or family if you want to know
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more about how to write a promissory
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note read our article how to make a
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promissory note to fund your small
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business in addition to showing you how
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to make a promissory note we'll talk
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about the issues you need to understand
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before borrowing money from friends and
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family thrown up financing option number
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eight crowdfunding our second to last
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fundraising method has become one of the
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most popular ways to fund a business
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debt-free crowdfunding is when you focus
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on raising small amounts of money from a
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large number of people platforms like
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fundable Kickstarter IndieGoGo and
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rocketHub connect entrepreneurs products
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with the world crowdfunding works best
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for startups with visually appealing
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consumer products think tech gadgets
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apparel and food and beverage products
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if this sounds like your startup I
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highly recommend reading how to
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crowdfund your business before launching
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your own crowdfunding campaign startup
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financing option number nine raising
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money from angel investors and venture
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capitalists venture capital generally
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comes from a company or firm
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whereas angel investors are usually
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wealthy individuals acting on their own
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with both angel investors and VCS
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you can raise money debt-free but it's
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important to establish upfront and
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contractually how much control they will
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have in your company if you have a solid
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business plan with financial projections
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and you're confident that your business
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can provide a 10times return on
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investment angel investors or venture
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capital might be right for you if you
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want to move forward with any of the
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financing methods we've covered in this
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video we've created a start-up funding
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essentials kit with everything you need
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to know to increase your chances of
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getting funding you can download our
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free startup funding essentials kit
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right here I'm still here did you get it
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good that's it for this video for more
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small business videos subscribe to fit
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small business also make sure to
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it's fitsmallbusiness.com for in-depth
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articles and guides to help your
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business succeed leave a comment below
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with any questions and we're happy to
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answer to go ahead I'll wait yeah okay
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okay
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