3 Common Business Funding Options

We understand that many aspiring business owners find the thought of financing their business ownership dreams intimidating — sometimes even impractical.

But that’s not the case with Liberty Opportunities.
We offer a variety of proven financing options that eliminate financial uncertainty.

Because everyone’s financial situation is different, our experts first take the time to evaluate which financing program is best for your unique financial circumstances. We even cover any costs associated with obtaining your financing.

Below, we’ll dive into those funding options.

 

SBA 7a FUNDING

Many people choose SBA funding because of the flexibility it gives them. These loans are $100,000 up to $150,000.

Basic Requirements

  • United States Citizenship.
  • 700 Plus Credit Score on Equifax.
    • This can also be an average of more than one person involved.
  • No Bankruptcies, foreclosures or liens within 7 years.
  • Low to no inquiries.
    • Unless the inquiries are supplied with acceptable reasoning.
  • 2 years of decent tax returns.
    • Typically recording an annual average of $75,000 or more.
    • Additionally, personal debt to income (DTI) may not exceed more than 40% of annual income.
  • Combined credit card debt of no more than $10,000.
    • Unless backed up with higher income shown on tax returns. This is typically an annual average of $150,000 or more.
  • 10% injection of the loan amount.
    • The initial loan amount is not to exceed $150,000.
    • For projects requiring more than $165,000 (A $150,000 loan with a $15,000 injection.), then the initial injection for the total project must cost less $150,000.
    • For example: If your total project cost is $180,000, then your initial injection would be $180,000-150,000 = $30,000.
  • $25,000 in additional liquidity after the required injection.
    • These are funds NOT to be used for your total project costs. Instead, they are intended to be funds available for personal reasons should they be required.
      Common forms of liquidity would be:

      • Cash
      • Savings
      • Certificate of Deposits (CDs)
      • Investment Portfolios (i.e stocks, bonds, mutual funds, etc.)
      • Rolled over 401k
      • Access to retirement funds being of age 59.5 or older

If you are interested in an SBA 7a Loan based on these basic requirements, let us connect you to a specialist who is able to answer your questions and to provide information that may help your decision-making process.


UNSECURED FUNDING

Unsecured funding is the clearest choice for many people. These loans require no collateral but are often smaller in size than other loan options.

Benefits (Including, but not limited to)

  • To secure the loan:
    • No Cash.
    • No Collateral.
    • No Tax Returns.
    • No Income Verification.
    • Minimal Paperwork.
  • Unsecured loans are revolving lines, so any remaining balance may be reused while lines remain open.
  • 0% promotional introductory interest rates for up to a year or more.
  • Funds may be available in as few as 3 weeks.

Negatives (Including, but not limited to)

  • The total funds consist of multiple lines.
  • Credit Score will be reduced after the loan is applied.
  • Credit card interest rates apply after promotional interest rates.
    • This can be offset by reducing your balances as much as possible during your promotional rate period. This period typically has a 0% interest in addition to taking advantage of the 0% interest supplied during the promotional periods.

Requirements (Including, but not limited to)

  • A credit score of 750, or close, is typical.
    • The FICO scores on ALL 3 bureaus are indicative of being able to obtain unsecured funding above $50,000.
    • A lower score may still result in loan obtain ranging from $25,000 to $40,000.
  • No credit inquiries in the previous 6 months.
  • No derogatives on account.
  • These include Bankruptcy, Foreclosure, Collections (Paid or Unpaid), and late payments.

It should be noted that although Unsecured Funding in the amount of $150,000 or more has been achieved, the average range per qualified person is $80,000 to $100,000. Again, this is per individual. The amount available doubles when another qualified person “of like kind” is added. For example, these qualified people may be a: Spouse, Family Member, Friend, Partner, Etc.

If you are interested in learning more about an Unsecured Funding Loan, we would be happy to connect you to a specialist who is able to answer your questions and to provide information that may help your decision-making process.


401k ROLLOVER FUNDING

In recent years, the 401K Rollover Funding option is a hugely popular funding option.

  • Typically used for rollovers greater than $80,000.
  • 401k is used for funding.
    • 401k is not cashed in.
    • There are no tax consequences or penalties.
  • Business is allowed to be used as part of 401k.
    • Business may make up whole or part of the process.
    • Business is subject to deferred tax benefits.
  • Can take as little as 3 weeks.

We work with people who will create a customized plan for you. They are as focused on setting up your long-term success and wealth-building as they are in providing a process for financing your business.

If you are interested, we would gladly connect you to these specialists.


Please feel free to contact us for more information concerning the options you would like to explore further. We have long-standing relationships with specialists concerning each type of funding methods. They are eager to answer any questions you have and to help clarify your decision-making process.

We hope you’ve found this information valuable, and look forward to growing our relationship together.