There are many types of opportunities to raise money for your business regardless of the stage your business is in. Be it a pre-startup, an idea in process, or an operating business looking to expand. The following are listed in order of complexity in obtaining the funding.
Peer to Peer Lending – Providers make loans for three to seven years up to $100,000. Credit score may not be required but rates vary from 5% to 35% based on credit risk.
Real Estate Bridge Loan – Often used for the purpose of flipping a property or to facilitate a rehab. Rates range from 9% – 18% and are affected more by the property and the project than by credit score.
Business Line of Credit – These loans may require business operation for 6 months to a year and revenue minimums. Loans from $1,000 to $2,000,000 with multiple types of loan products available. Loan type and credit score will affect the rate of interest.
Crowd Funding – In the industry its referred to as Reward or Charity Crowd Funding. When using it to raise money for a business, You’ll have to put together a pretty exciting idea, possibly a prototype as well as impressive presentation.
Crowd Funding Portal – Similar to Crowd Funding above, with the exception that it is regulated by the SEC. A fairly low cost option, providing a maximum of $1,000,000, and must be done through an SEC approved portal. A very flexible vehicle to raise money with common offerings based on a loan, selling shares, or offering revenue sharing.
Reg A+ Mini IPO – A newly available funding option that allows you to raise up to $50,000,000 and provides a less restrictive filing and audit requirement than an IPO. Costs to file may range $20,000 – $100,000 in legal and marketing fees and may require paying commissions to a broker to get the shares sold.
Private Placement – Technically an exemption filing with the SEC, an unlimited funding source, primarily managed by a broker where those funding your offering must be accredited investors.
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