$ 401k Rollovers (US)
Even though we usually call them "401k rollovers," you can get this kind of money from a number of different retirement investment accounts. 401k rollovers let you put up to 100% of your retirement money into your own business without paying taxes or penalties for taking the money out early. This is a very popular way to fund a franchise. This can also help you meet the requirements for cash injections for other sources of funding, like SBA loans and unsecured loans. There are many benefits to 401k rollovers, such as less debt, which makes the business more profitable, an immediate salary for the owners, employee benefits, and more. They can be done in a few weeks or less. There are a few reasons why using your 401k is better than using savings or getting a loan. First of all, the money in the 401k was earned before taxes. The money that comes out of savings is money that has been taxed. And if you choose to take out a loan, you'll have to pay it back with interest. Not so when you roll over your 401k. Using a 401k as an exit strategy is also a good idea. When the business is sold, all of the money goes back into the 401k and isn't taxed until it's taken out.
$ Unsecured Loans
An unsecured loan is just a loan that is given to a borrower based on good credit and doesn't require any collateral. This type of loan is often called a "signature loan." Most of the time, a borrower needs a credit score of at least 700, no negative marks on their credit report, and less than 40% of their current credit accounts (like credit cards and other lines of credit) being used. In as little as two weeks, you can get an unsecured loan.
$ SBA Loans
Even though the SBA (Small Business Administration) doesn't actually give loans, it will guarantee up to 90% of a loan for qualified borrowers. This makes the loan more appealing to the actual lender and less risky for them. SBA loans are a good way to get money for your franchise. The majority of SBA loans can be gotten within 60 to 90 days.
$ Home Equity Lines of Credit
Home equity lines of credit can be a way to fund your franchise that doesn't cost too much. Depending on your credit, home equity lines usually cost between 1% and 3% of the value of your home and have interest rates between 5% and 10%. In 30 to 60 days, you can set up a home equity line.
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