StartUp Financing Options
BASICS OF STARTUP FUNDING FOR SMALL BUSINESS
Startup funding is not like other forms of business funding. Since we are working with a business
that either has very little to no time in business and very little to no revenue, the criteria we look
for are tied to the borrower themselves instead of the business.
The distinction between an established business and a startup is very important to be able to identify.
There are 3 general rules to distinguish between a startup and an established business, which involves looking at their time in business and revenue.
Syndicated Line of Credit otherwise known as a SLOC:
This is a very unique way of getting a startup funding, and it is the easiest option to qualify for out
of the four. A SLOC uses the borrower’s credit to go to specific banks in a specific order to secure
multiple offers which makes up the total available line of credit. These offers are in the form of multiple
credit cards so the borrower receives 2-6 credit cards which equals the approval amount. These credit cards typically come with 12-24 months of 0% interest. There is also added flexibility due to the fact that as cards get paid off they can keep using them, but they also can get money directly from the cards’ deposited directly into your bank account as well.
Personal Term Loan
A personal term loan can typically only be gotten if the client also has two years of tax returns with $50k+ in W-2 income. It is just a loan that is directly deposited into the client’s account.
Business Line of Credit
Similar to the SLOC, this is the same concept except the cards are business cards. This can also only be given if the borrower has two years of $50k+ in W-2 income. The amount approved for these business cards is usually less than the personal version.
401k/IRA Disbursement
This is a specific technique to pull money out of a retirement fund earlier without
having to pay the early disbursements fees. This will only work if the client already has
a 401k/IRA. If a business has less than $5,000 per month revenue, then they would automatically be
considered a Startup. If a business has been making revenue for less than 3 months no matter the amount of
revenue, that also means they are a startup. If a business owner uses the term “Pre-revenue” that typically means they have no revenue right now, which will also mean they are a startup
