Even the most successful of businesses need to be reinvigorated from time to time. Whether that’s updating equipment, making improvements to your physical location, adding team members or expanding your services, additional funding to be used as working capital meets this need quite nicely, in fact.
Small businesses typically have access to working capital via two primary means:
SBA Express Loan
Working capital for low-dollar amounts – under $150,000 – are available from the Small Business Administration. These loans, called SBA Express loans, are available for both business startups and existing businesses, generally close very quickly and come with an attractive 10-year repayment term.
Some of the requirements include:
- 685+ credit score
- 10 percent equity injection* (for businesses under 24 months old)
- No bankruptcies within the past three years, no liens or judgements
- Cannot have over two bank inquiries
401(K)/IRA Rollover Funding
Rollover funding differs from an SBA Express loan in very significant ways. First, Rollover funding using qualifying retirement funds is not a loan in the traditional sense. There are no repayment terms such as repayment timelines and interest accrued.
With a Rollover you are actually “rolling over” or moving your retirement investments from other companies/businesses and reinvesting those dollars in YOUR own business. This funding type originated in the early 1970s, is IRS-approved, tax-deferred and penalty-free. When you have invested in your business using a Rollover funding plan, those funds become available nearly immediately for your use to build your business.
Perhaps the most significant perk of a 401(k)/IRA Rollover funding plan is that the dollars made available with a Rollover can be used in conjunction with an SBA Express loan, or other loan types, as the non-borrowed equity cash injection needed for the loan*.
Reinvigorating your business requires lots of consideration and hurdles to cross. Working capital funding shouldn’t be one of them. Contact Tenet Financial Group today to discuss your financial needs – 888-901-3335 – or use our FREE online funding calculator to see what types of business funding could be right for you.