Franchise Update Magazine Issue III, 2013 | Page 8

By Dallas Kerley, Chief Development Officer

Successful Funding Strategies:
How to get the equity injection you
need to obtain a SBA Loan.
Benetrends has been helping people achieve the American dream of business ownership for more than 30
years. With so many options for funding a new business, entrepreneurs come to us to help them navigate
the many options and design the best funding program for their individual needs. One common concern we are often asked to address is “where can I get
the money I need for an SBA Loan”? Several requirements need to be met in order to obtain an SBA loan.
One of the most important is demonstrating that you
have sufficient “Skin in the Game”. Usually this means
that in addition to having sufficient collateral, lending
institutions want you to provide a 20% to 30% capital injection to qualify for a loan.  Entrepreneurs often
find they don’t have sufficient savings to meet this equity injection requirement and therefore need to look at
alternative sources for the funds. In light of this, two of
the more popular ways to acquire these funds, has been
using either 401(k)/IRA Rollover funding or a Securities Backed Loan.
401(k)/IRA Funding
In recent years, over 10% o