Whatever kind of business you are looking to start, you will need funds to get off the ground. You could always go down routes like finding investors and applying for business loans.
But you may also have the option to free up extra cash to get the money you need to invest in your startup. Here are three ways in which you could go about it.
1. Liquidate Your Assets
Assets come in many forms. So, take stock of what assets you have that you could turn into cash. Perhaps you have an old Rolex that you never wear or maybe you own a boat that you seldom use.
Make a list of assets that you could liquidate and research how much you could gain by selling them. In this digital day and age, it is easier than ever before to find buyers for your unneeded assets.
Also, bear in mind that assets are not limited to items with high ticket prices. By simply selling any of your belongings, you could potentially earn enough to invest in your business.
For instance, you could sell TVs, phones, laptops, bicycles, books, and so on. The list is endless. If you have quality items you no longer need, you could quickly raise the cash you need to begin your startup.
2. Get Money from Your Retirement Account
If you have a retirement account, you could free up extra cash from it. Indeed, by going down this route, you can often make more significant amounts of money to invest in your new business compared with liquidating assets, depending on your specific circumstances.
If you have a 401(k) and you are younger than fifty-nine years and six months old, you will have to pay a 10% penalty to withdraw money from your 401(k) fund. But when you need cash to invest in a startup, it can be worthwhile paying that penalty fee if it means you can access larger amounts of capital.
Also, you have the option to borrow money from your 401(k), instead of withdrawing the cash you need, so make sure you look into your different options to find the right solution for you.
You could free up money from other sources besides a 401(k). For example, an IRA could be a source of funds, particularly if you have a Roth IRA.
3. Consider Refinancing Your Mortgage
Perhaps the best option for freeing up extra cash to use for a startup business is to refinance your mortgage.
With a cash-out refinance, you basically take out a new mortgage that is more than you owe on your current home loan but which is less than the current value of your property.
You get to receive the difference between the new amount you borrow and the balance of the loan at the time of closing. You can sometimes find really good rates for refinancing your mortgage, too. Get started by checking out SoFi mortgage refinance rates.
If you want to avoid external investors when looking to start a new business, freeing up some of your own extra cash can be a good way of proceeding.
The three main options available to you are to liquidate your assets, take money out of your retirement account, and refinance your mortgage.
If none of those are viable options, then look at other funding methods, such as crowdfunding, getting a business loan, or getting an angel investor or venture capitalist to invest in your startup.
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