Money for Dummies
Your business is your baby. This very idea can leave you inspired and liberated. But there is also an edge, how do you get some cash to either advance your idea to the point of attracting investors or make your business profitable.
1- Asset sale.
If you have assets, such as car, RV, jewelry, rugs, motor boat, motor bike or second property. They can be turned into cash. Most people’s biggest asset is a home and a car. If you own a late model car, you can sell it and replace with a lower model car with no down payment. This will free up cash and leave you with a low monthly payment.
2- Borowing against your home.
This is an old trick. It’s also the best because you are in control of the money borrowed. The interest rate will be the same as your mortgage and the payment will be added to your moetgage payments. Keep in mind at tax time the interest portion of the business loan is an expense for the company. In that case ask your banker to keep a separate statement to show how much interest and principle you paid for your home as well as your business loan
Once your business gets off the ground and you are able to take a salary, start making monthly payments toward the loan. This way it will be paid off faster instead if having the same amortization as your mortgage.
3- Insurance policy.
Most of us pay into health insurance, life insurance, auto and home insurance. You can borrow against life policy insurance. Most life policies have some cash value after three years. Call or write your insurance agent and get details on how you can access these funds.
4- Try friends and family.
Your typical friend and family investor is someone who is in business and will help because he wished someone had helped him those early days. If you go this route make sure there is a written agreement in place. There is nothing worse than hearing “you never said that.”
I hope Money for Dummies was beneficial. You can always ask a question.