With the start of a new year comes the start of new businesses. This is the time to get your paperwork and permits together, because opening a business is a lot more time consuming than you may think. Even if you are an internet-based business, you may still need local authorization to sell your goods. Even before this, you need to know where you will obtain business funding. This is one of the biggest issues that new merchants must deal with, regardless of their credit score. Below are four of the most popular start-up funding options available to US-based merchants.

First off is the ACH business loan. This is looked over by many merchants, and it is one of the least talked about options, because the business must have been in business for at least 6 months before applying. An ACH business loan provider, like FAM, can help you better understand the process, but the cliff notes are simple: You must have a FICO score of 500 or above, you must have been in business for 6 months, you must have 3 or fewer NSF’s per month, and $10,000 in gross monthly accounts. This is not a traditional loan, as payments are taken from your merchant account at a certain percentage agreed upon by you and the ACH business loan provider.

Second is a credit card. It is one of the riskier business funding options, yet it is the first listed on the SBA’s website. With a credit card, you must make full monthly payments – regardless of your company’s gains or losses – or risk a higher interest rate. A missed payment can tank your credit, making it nearly impossible to recover in a short time period. If you choose to go this route, make sure that you read the fine print, because it often comes back to bite you in the end.

A third option is crowdfunding. From GoFundMe to Kickstarter, there are many crowdfunding sites around. You can start a campaign and share it around social media to garner interest – and funding – for your company. However, many people want something for their donation, so be sure to tell your terms in advance of their donation, and stick with it.

Lastly, you can ask your relatives. This is typically the last option, and least successful. Even if someone is able to help, you need to make sure they understand the terms of loaning you the funds. You also need to get a contract, because a verbal agreement is not legally binding in most places, especially when it comes to borrowing and repaying money.

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