PRIVATE VIDEO**

Summary

In this informative video, Porsha introduces 'Startup Loan School,' guiding entrepreneurs through four primary funding options for their businesses: personal funds, community outreach, seeking investors, and obtaining loans. She discusses the pros and cons of each, including the benefits of not repaying community funds like crowdfunding and grants, the challenges of securing investors, and the common yet complex loan options. Porsha's expertise in SBA startup loans shines as she navigates the complexities of business financing, offering insights on personal and business financing, and the various types available pre- and post-revenue generation.

Takeaways

• 💼 Starting a business often requires initial funding to get it off the ground.
• 🏦 Porsha specializes in SBA startup loans and aims to educate on various funding options for startups.
• 💰 There are four main funding options for businesses: personal funds, community outreach, investors, and loans.
• 👛 Using personal funds is the first option, but it may not be feasible if there isn't enough savings or if the risk is too high.
• 🤝 Community outreach involves crowdfunding and grants, which don't need to be repaid but can be hard to secure.
• 🧐 Seeking investors includes finding angel investors or venture capitalists, which can be challenging and requires convincing them of the business's potential.
• 💳 Personal financing options include personal loans, HELOC (Home Equity Line of Credit), and personal credit cards, each with its own advantages and drawbacks.
• 🏢 Business financing can be divided into pre-revenue and post-revenue options, with different types of loans and credit available at each stage.
• 🏦 SBA Loans are backed by the government and offer longer terms with lower monthly payments, but have a higher barrier to entry.
• 🛠 Equipment financing and hard money loans are specific types of pre-revenue business financing tailored to equipment purchases and real estate investments, respectively.
• 💳 Business credit cards can provide quick access to funds but may not offer the necessary capital for significant startup costs and come with high interest rates.
• 🏢 Post-revenue financing options include merchant cash advances, term loans, and asset-based financing, each with its own terms and suitability for different business needs.

Q & A

What are the four main ways to fund a startup business mentioned in the video?

The four main ways to fund a startup business are using personal funds, reaching out to your community (crowdfunding or grants), seeking an investor, and obtaining a loan.

Why might someone choose not to use personal funds to start their business?

Someone might choose not to use personal funds because they either don't have enough savings, they don't want to risk their own money, or they prefer to explore other funding options.

What are the pros and cons of crowdfunding and grants?

The pros of crowdfunding and grants are that they don't require repayment. However, they are difficult to secure because it's hard to get people to invest or find grants, which are highly competitive and can take time to get approved.

What types of investors are discussed, and how do they differ?

The video discusses angel investors and venture capitalists. Angel investors are individuals who invest in exchange for equity, while venture capitalists work for firms and also seek equity but typically prefer businesses with high growth potential.

What is the difference between personal financing and business financing?

Personal financing shows up on your personal credit report and includes options like personal loans, HELOCs, and credit cards. Business financing does not affect your personal credit report and includes options like SBA loans, equipment financing, and business credit cards.

What are the potential drawbacks of using credit cards for business funding?

The drawbacks of using credit cards include high interest rates, limited funding amounts, and the fact that they are not ideal for long-term investments due to the accumulation of interest over time.

What is a HELOC, and why might it be a good option for some business owners?

A HELOC (Home Equity Line of Credit) allows you to borrow against the equity in your home. It's a good option because it typically offers favorable terms, but it requires home ownership and using your home as collateral.

What are some business financing options available before generating revenue?

Before generating revenue, businesses can explore SBA loans, equipment financing, hard money loans, and business credit cards. Each option has specific requirements and benefits depending on the business's needs.

What are merchant cash advances, and why should they be used cautiously?

Merchant cash advances provide quick access to funds, often within 24 hours, but they come with high interest rates and can significantly impact your cash flow, making them a risky option for long-term financing.

What is asset-based lending, and how does it work with real estate and equipment?

Asset-based lending involves using assets like real estate or equipment as collateral to secure a loan. For real estate, lenders may place a mortgage or second mortgage on the property, and for equipment, they may place a lien on the equipment until the loan is repaid.

Outlines

00:00

💼 Funding Options for Startups

Porsha, an expert in SBA startup loans, introduces the video series 'Startup Loan School' aimed at educating entrepreneurs on various funding options for their businesses. The paragraph covers four main funding methods: personal funds, community outreach (crowdfunding and grants), seeking investors (angel investors and venture capitalists), and obtaining loans. Each option is discussed with its pros and cons, highlighting the challenges and considerations involved in using personal savings, the difficulty of securing grants, the selectivity of investors, and the prevalence of personal guarantees in business financing.

05:00

🏢 Business Financing: Pre-Revenue and Post-Revenue Options

This paragraph delves into the specifics of business financing, categorizing it into pre-revenue and post-revenue options. Pre-revenue options include SBA loans, equipment financing, hard money loans, and business credit cards, each with its unique benefits and requirements. Post-revenue options expand to include merchant cash advances, term loans, and asset-based financing using real estate or equipment. The paragraph emphasizes the importance of understanding the terms, interest rates, and the potential impact on cash flow for each financing method, providing a comprehensive overview of the financial avenues available to growing businesses.

10:02

📢 Engaging with the Audience for Further Guidance

In the concluding paragraph, the speaker invites viewers to engage with the content by subscribing for more information, asking questions in the comments, or sharing additional funding options they may know of. The call-to-action encourages interaction and emphasizes the speaker's commitment to sharing valuable insights and knowledge gained over the years, particularly in SBA loans and other business lending areas, to empower entrepreneurs with the necessary tools to start and grow their businesses successfully.

Keywords

💡Startup

A startup refers to a new business venture that is typically seeking to develop and scale rapidly. In the video, the term is used to describe the type of business that the audience is likely to be involved with, as the content focuses on funding options for new businesses. The script discusses various methods to finance a startup, emphasizing the importance of capital for getting a business off the ground.

💡Funding

Funding in this context refers to the financial resources required to start and grow a business. The video's main theme revolves around the different avenues through which startups can secure funding. Examples from the script include personal funds, community outreach, investors, and loans, all of which are explored as potential sources of financial support for a startup.

💡Personal Funds

Personal funds are the money that an individual uses from their own savings or retirement accounts to finance a business. The script mentions personal funds as the first option for startup funding, highlighting that it might not be viable for everyone due to lack of funds or reluctance to risk personal money.

💡Community

In the script, reaching out to the community refers to methods like crowdfunding and grants, which are ways of obtaining financial support from the public or from programs and organizations that believe in the business idea. The video points out the pros and cons of this approach, noting that while the money often doesn't need to be repaid, it can be challenging to secure.

💡Investor

An investor is an individual or entity that provides capital to a business in exchange for equity. The video distinguishes between angel investors, who are typically high-net-worth individuals, and venture capitalists, who represent firms that invest in businesses. The script discusses the difficulty of securing investment and the selectivity of investors.

💡SBA Loans

SBA Loans refer to loans that are backed by the Small Business Administration, a U.S. government agency that supports small businesses. The video presenter specializes in SBA startup loans and explains that these loans are advantageous due to their terms, such as 10-year repayment periods, but also notes the challenges of qualifying for them.

💡Personal Financing

Personal financing includes options like personal loans, home equity lines of credit (HELOC), and personal credit cards. The script explains that while these options may show up on a personal credit report and often require a personal guarantee, they are ways to fund a business using an individual's own financial resources.

💡Business Financing

Business financing encompasses funding options that are specific to the business entity and do not appear on personal credit reports. The video outlines different types of business financing available to startups, such as SBA loans, equipment financing, and hard money loans, as well as options for businesses that have started generating revenue.

💡Pre-revenue

Pre-revenue refers to the stage of a business before it has started generating income. The script discusses various funding options available to businesses in this stage, such as SBA loans and business credit cards, which are crucial for businesses that have not yet established a revenue stream.

💡Revenue

Revenue signifies the income generated by a business from its operations. The video mentions additional business financing options that become available once a startup begins to make money, such as term loans and asset-based financing, which use the business's revenue-generating potential as a basis for the loan.

💡Asset-based Financing

Asset-based financing is a method of obtaining loans where the business uses its assets, such as real estate or equipment, as collateral. The script explains that this type of financing allows businesses to access larger amounts of capital and provides examples of using real estate and equipment for such loans.

Highlights

Introduction to Startup Loan School with Porsha, an expert in SBA startup loans.

Four main ways to fund a startup: personal funds, community outreach, investors, and loans.

Using personal funds like savings or retirement accounts for starting a business.

Challenges of crowdfunding and the benefits of grants without repayment obligations.

The difficulty of securing grants due to high competition and approval times.

Exploring investor options like angel investors and venture capitalists for equity.

The appeal and challenges of securing investment from specific business sectors.

Personal financing options including personal loans, HELOC, and credit cards.

Advantages of HELOC for business funding with favorable terms.

Limitations of credit cards for long-term business funding due to high interest rates.

Business financing options categorized into pre-revenue and post-revenue stages.

SBA Loans as a government-backed option with longer terms and lower monthly payments.

The hurdles of obtaining SBA Loans and the support available for navigating them.

Equipment financing as a method for acquiring equipment with a lender holding the title.

Hard money loans for real estate investments and their accessibility with credibility.

Revenue-based business financing options including merchant cash advances and term loans.

Risks and considerations of merchant cash advances despite their quick availability.

Variety of term loans available from banks and the importance of business revenue for eligibility.

Asset-based lending using real estate or equipment as collateral for business loans.

Invitation for viewers to engage with specific funding inquiries and subscribe for more information.

Transcripts

you're here because you've either just

started your business or you're planning

to start your business and you need

money to get it off the ground so let's

go over all of your options to fund your

startup my name is Porsha and I've spent

the last six years learning all the

different ways businesses can get money

to start and grow I now specialize in

SBA startup loans but this channel is

going to be so that you can understand

all of the resources that are available

to you and your startup business welcome

to Startup loan school so there are four

main ways that you can get funding for

your business you can either use your

own personal funds you can reach out to

your community you can seek out an

investor or you can get a loan so let's

dive into all of these options

individually and go over the pros and

cons so the first option of using your

own personal funds like most commonly

your savings account or your retirement

accounts so if people don't use this

option or if you don't want to use this

option right most likely it's because

you don't have it you don't have enough

of it or you don't want to gamble with

your own money but this is the first

option that we all have to start a

business and grow a business but if this

one doesn't work for you let's move on

to reaching out to your community so if

you're going to reach out to your

community this is most likely going to

be crowdfunding and grants now a lot of

times this is money that you don't have

to pay back so that's definitely a pro

however with crowdfunding is these are

individuals that you're reaching out to

and you're basically asking them to

invest in your business believe in you

and it's hard to get individuals to part

ways with their cash as far as with

grants you're also asking people or

programs and organizations to believe in

you and invest into your business but

it's hard to find grants and they're

highly competitive and they also can

take a while to um actually get approved

and and get going so with that these

options aren't the easiest to get so if

you haven't been successful with

reaching out to your community getting

grants or getting people that you know

to invest in your business let's move on

to option three of getting an investor

so if you're going to try to seek out an

investor this is either going to be an

angel investor or a venture capitalist

Now with an angel investor this is going

to be an individual that has money that

wants to invest in your business and

exchange for equity and with Venture

capitalists these are people that work

for firms who have money who will invest

into your business for Equity now with

that it's just not easy again to get an

investor to invest in your business or I

think more people would do it and

there's specific businesses they like as

well

however if this is for you great if it

is not we'll move on to the fourth

option of financing which is my favorite

topic and also the most common way that

people fund their business besides

self-funding so let's get into this so

there's personal financing and there's

business financing personal financing

does show up on your personal credit

report business financing does not

however contrary to popular belief most

business financing still has a personal

guarantee but we'll go into that in

another video so let's go over the types

of personal financing that you can

receive there's a personal loan there's

heog and there's personal credit cards

so with the heog this is going to be a

home equity line of credit right and you

have to have a home and you have to have

equity in that home in order to receive

it so you are using your home as

collateral in order to get funding for

for your business and some people may

want to do that some may not but the

good thing about a HELOC is they

normally have really really good terms

but again not everybody has that option

so there's also credit cards but with

credit cards although they are very for

the most part they're easy to get they

may not give you all the cash you need

to actually start your business and

again there it's not cash so if you do

need cash to actually put into your

business it's most likely not going to

be from that credit card and Plus credit

cards do have for the most part High

interest rates and so if this is a

long-term investment that you're seeking

this is not something that you want on

your credit card and just racking up the

high interest over the years so you NE

you shouldn't really use a credit card

to fund long-term Investments with that

a personal loan is cash now that

personal loan is good because it's also

fairly easy to receive as long as you

have a job and decent credit but with

the personal loan they do have higher

interest rates than business loans the

the good business loans

but it is an option now if you don't

want to go on the personal side and you

want to go on the business side well

let's go over some of your business

financing options so with business

financing it's going to break up into

two categories business financing that

you can receive when you are pre-revenue

and business financing that you can

receive once you start making money with

your business so let's go into the

pre-revenue first you have four options

you have SBA Loans you have equipment

financing

you have hard money loans and you also

have business credit cards so with SBA

Loans these are this is from the small

business administration or these are

loans backed by the small business

administration but they're still given

out by Banks and lenders you know that

you know of it's just that bank and

lenders more likely to give you money

because it's being backed by the

government startup loans are risky so

with the SBA they're good because they

normally have 10-year terms and so you

have payments that are stretched out and

you have so low monthly pay payments

it's not going to suck cash dry from

your business as you're trying to get

started but with that the SBA does have

a lot of hurdles in order to get into it

so we do help out on the SBA side so I

can help you with that now the SBA is

definitely a pro but there's also other

options so you have credit cards but

with the credit card it's not cash again

and business credit cards as it start up

most likely you're not going to receive

a large amount so um you may need more

Capital than what a business credit card

can give you and then on top of that it

depends what you're using it for if it's

a long-term investment like you're not

trying to pay it back right away they

carry High interest rates although they

do have promotional rates like 0% for 12

months maybe 24 months but you're still

over time going to pay back a lot of

money using a credit card so let's jump

into equipment financing with equipment

financing this is strictly for people

that are looking to finance equipment

you can basically get a lender that will

purchase that equipment for you and hold

on to the title until you pay it off and

hard money loans this is strictly for

people looking for Real Estate

Investments um and that's the type of

loan that you know you can get um fairly

easy as long as you can show some type

of credibility on your part that you

know where you're doing so that's on the

pre-revenue side on the revenue side

when it comes to business financing

there's going to be for additional

options there's merchant cash advances

there's term loans there's also asset

based financing using your real estate

and asset based financing using

equipment so if we go into merchant cash

advances basically this is high interest

short-term debt but you can get it in 24

hours so if it's like an emergency for

your business um you basically have this

option but it can suck your cash flow

drive so I would be very cautious before

using a merchant cash advance or getting

a merchant cash advance next you have

term loans so remember SBA Loans is a

type of Term Loan but the SBA is back by

the government so with regular term

loans Banks and lenders they have all

types of term loans that they have

within their institution right they have

their own minimum requirements

government's not necessarily regulating

these loans to to a degree but they can

make the terms on this and let you know

what it is and so there's so many

different types of term loans that exist

within every bank and every lending

institution and a lot of times if it's

not backed by the government then you

have to already have made money with

your business in order to receive it

because it's more so a a risk factor now

term loans uh regular term loans they

have better interest rates a lot of

times than personal loans but sometimes

it can be neck and neck but at least

with the term loan again it's a business

loan and they do carry a lot of times

they carry longer term length than say a

personal loan so that's on the term loan

side there's also asset based lending

right and so with asset based lending

using your real estate you have business

lenders that will put a mortgage or

second mortgage morgage on your property

and basically give you a business loan

but again now you are using your

property however now that you have that

collateral you just have access to more

money so there's the same concept using

your equipment asset based lending using

your equipment so if you have equipment

that's free and clear you can get a

lender that will put a lean on that

piece of equipment and then they'll give

you a loan that way as well so those are

all of your funding options for your

startup business I can go into more of

them um if there's one specifically that

you want to know more about just let me

know in the comments or if there's one

that you know of that I did not talk

about let us know in the comments and if

you found this information valuable just

make sure you hit that like button and

I'm going to just I'm going to share so

much information with you guys that I

have learned these past years with SBA

Loans and other types of business

lending and so that you can have all the

tools you need to start and grow your

business so if you want this information

and this is going to be helpful and

valuable to you make sure you subscribe

I'll see you in the next video