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Exclusive: The 8 best options for small business funding –



The 8 best options for small business funding

#options #small #business #funding

For many small businesses, access to funding can be a matter of life and death. 

The stakes are especially high given that 18.4% of U.S. businesses fail within the first year, 49.7% after five years and 65.5% after 10 years, according to a LendingTree analysis of data from the U.S. Bureau of Labor Statistics. One of the top reasons businesses go under is lack of funding, so it’s especially important to know where to turn if you need a lifeline. 

While the options can depend on factors such as size, industry, amount needed, time frame and purpose, here are eight possibilities to consider:

1. Family and friends

This can be a great place to turn because it doesn’t generally come with a lot of financial background requirements or other pre-requisites. “Uncle Charlie is going to be more willing to believe in you without requiring extensive financial documentation,” said Joshua Oberndorf, a manager in the private business services group at EisnerAmper.

Pros: Easier access to needed funds without high interest rates.

Cons: Failure to pay back the funds in a timely manner, or reneging completely, could sour family relationships. “Money is as much accounting as it is psychological,” Oberndorf said.

What else to know: According to the IRS, family members are supposed to charge a minimum interest rate to avoid adverse gift tax consequences. The IRS publishes these Applicable Federal Rates (AFRs) on a monthly basis.

2. Banks

Pros: Trusted and well-established source of funding. May be lower cost than other options and offers the ability to grow the lending and banking relationship over time.

Cons: Banks can have rigid lending requirements, including a good personal credit score and ample cash flow and income, that may be out-of-reach for some credit borrowers, and the process can be slow, sometimes several weeks to secure a loan.


What else to know: Rates can range from around 3% to about 7%, according to LendingTree. Consider a smaller bank, which may be more willing to grant credit and walk you through some of your options, said Matt Barbieri, a certified public accountant with Wiss & Co., who provides business advisory services.

3. Online lenders or funders

Pros: Offers quick access to capital, generally through a simple, online process.

Cons: It can be hard to discern actual cost of capital, especially with a merchant cash advance, which is an upfront sum that a business is on the hook to repay using a percentage of debit and credit card sales, plus a fee. Some online lenders and funders may not have long-standing track records, and the option may be more expensive than others. An online loan, for instance, has an APR of between 7% and 99%, whereas the approximate APR of a merchant cash advance runs between 40% and 350%, according to NerdWallet.

What else to know: Do your due diligence on any online lender or funder you plan to use, said Craig Palubiak, president of Optim Consulting Group. Make sure the company has a good reputation and multiple good reviews, and be sure to compare multiple options. It’s also important to drill down to the total cost of capital, taking into account the interest rate, if applicable, fees, and early payment penalties, if any.

For help understanding the true cost of a merchant cash advance, use an online calculator.  

4. SBA loans

Pros: Federal-backing provides access to low-rate bank financing for small and large loans. There are different types of loans and lenders and programs have unique eligibility requirements. Resource centers are available to help business owners, including those in underserved communities.

Cons: The approval process can be slow. The timeline depends on the loan, but generally it can take a few months. A down payment or collateral may be required. Low-credit applicants may not be approved.

What else to know: There are different types of SBA loans, and maximums vary. The most common SBA loan type is called 7(a), and you might expect to pay somewhere in the range of 7% to 9.5%. “Be prepared to work on a refinance as soon as the agreement allows,” Barbieri said. This will allow you to remove personal guarantees and restrictive covenants that can stifle growth, he said. An SBA loan may offer a longer repayment term — under the 7(a) program, up to 10 years for equipment and working capital; 25 years for real estate — and may offer competitive interest rates compared with conventional bank loans.

5. Credit cards

Pros: Quick access to capital with the possibility of rewards. It could be a good option for short-term funding needs, if you are certain you can pay off the debt before interest starts to accrue. Business cards tend to carry higher credit limits than personal cards.

Cons: Interest rates can be high. Cards that are well-ranked by offer APRs in the range of close to 10% to nearly 35%, and some cards charge an annual fee. Generally not a good option for large funding needs.

What else to know: “Don’t rely on this as a sole source for funding growth; if you are too high risk for the other categories, seriously consider that before taking on consumer credit as a business,” Barbieri said.


6. Investor equity

Private grants, private equity and individuals with money to invest can serve as sources of funding. 

Pros: Positive cash flow, as well as expertise to help propel the business forward. 

Cons: Dilution of capital, difficult to find the right match. 

What else to know: Palubiak recommends owners tap their network and affiliate with start-up communities and local organizations to make investor connections.

“Spend as long as you can dating before picking your mate,” Barbieri said. “Make sure their goals are aligned with your goals or it will end badly.”

7. Federal, state and economic development grants

Pros: Typically non-dilutive, can be small or large.

Cons: There can be administrative hassles and restrictive eligibility requirements. 

What else to know: This could be a good option if you are a company that can be deemed “important” to the infrastructure of your region, Barbieri said. Start your research by researching resources on the website of the U.S. Economic Development Administration to find EDA regional office contacts, state government contacts and other information. 

8. Crowdfunding

Pros: Allows you access to capital without piling on debt, and the ability to raise money and increase awareness of your brand among potential investors and customers while test-marketing an idea.

Cons: May have a low success rate. Could be fees associated with certain platforms. Also, launching a successful campaign takes marketing resources and time.

What else to know: There are a growing number of available equity crowdfunding websites. Before choosing a provider, make sure you understand how the platform works, the fees, who can invest and how it could accomplish your specific funding needs.


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Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.


Exclusive: Rezonate raises $8.7M and launches its cloud identity protection platform out of stealth –




Rezonate raises $8.7M and launches its cloud identity protection platform out of stealth

#Rezonate #raises #87M #launches #cloud #identity #protection #platform #stealth

Rezonate, a Boston- and Tel Aviv-based startup that offers an agent-less cloud identity protection platform that aims to help DevOps teams minimize attackers’ opportunities to breach cloud identity and access, is coming out of stealth today and announcing an $8.7 million seed funding round, led by State of Mind Ventures and Flybridge, with participation from toDay Ventures, Merlin Ventures and a number of angel investors.

Founded in January 2022, Rezonate is part of a group of modern identity and access management (IAM) startups that aim to modernize the current state of affairs in this space, which is struggling to meet the demands of modern cloud infrastructure systems. This shift is creating new attack surfaces, especially as enterprises move to the cloud — and more dynamic infrastructure systems — at an ever-increasing rate. The number of security breaches stemming from issues with identity and access management is already on the rise. Indeed, Gartner expects that by 2023, “75% of security failures will result from inadequate management of identities, access, and privileges.”

Image Credits: Rezonate

Co-founder and CEO Roy Akerman was previously the head of the Israeli Cyberdefense Operations, while Rezonate co-founder and CTO Ori Amiga previously led R&D for this unit. Both received the Medal of Honor for their contributions to Israel’s National Security.

“The rapidly-changing cloudscape together with the proliferation of human and machine identities requires a different approach,” said Akerman. “Modern infrastructures require a precise and nimble way to outsmart attackers. One that prioritizes cloud identities and access at its core and is constantly adapting to current dynamics over yesterday’s snapshots and, for the first time, gives defenders and builders the means to act confidently.”

Image Credits: Rezonate

Rezonate promises to discover all of a company’s cloud and identity providers and the corresponding access privileges of its employees. The platform automatically detects security gaps and abnormal access attempts in real time. Rezonate promises that within minutes of deploying its solution, its platform can identify cloud identity and access risks and provide guidance for remediating them, or even automatically remove access and terminate sessions.

At the core of all of this is what Rezonate calls its ‘Identity Storyline,’ which aims to provide DevOps and security teams with a context-rich dashboard that helps them understand the security risk across a company’s cloud estate. With this, users get an easy-to-read dashboard that clearly lays out what kind of access every user has — and where there are potential issues.


“The fact that in just ten months from our first line of code we already have active customers, solving key gaps daily, affirms the criticality of the cloud identity and access issue. In a cloud world where everything is changing all of the time, DevOps teams need a solution as dynamic and automated as the infrastructure they need to protect is,” said Amiga.

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Exclusive: Building a Prospecting Motion: How to Outreach Like a Pro –




Building a Prospecting Motion: How to Outreach Like a Pro

#Building #Prospecting #Motion #Outreach #Pro

The core responsibility of business development is to generate a pipeline of new business opportunities. For teams looking to close new customers, this work is indispensable.


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Exclusive: 5 things to know before the stock market opens Tuesday –




5 things to know before the stock market opens Tuesday

#stock #market #opens #Tuesday

A trader works on the floor of the New York Stock Exchange (NYSE), December 5, 2022.

Brendan McDermid | Reuters

Here are the most important news items that investors need to start their trading day:

1. Rough start

Stocks got off on the wrong foot this week with an ugly selloff Monday as investors weighed strong new economic data that stoked worries of sustained rate hikes from the Federal Reserve. The Dow dropped more than 480 points, while the S&P 500 declined 1.79% and the Nasdaq fell 1.93%. When it meets next week, the Fed’s policy-setting committee is expected to raise its benchmark rate by half a percentage point, which is less than the three-quarter-point hikes of the past few months but still sizable. Smith & Wesson and Stitch Fix earnings are set to hit after the bell Tuesday. Read live market updates here.

2. Salesforce slumps

Bret Taylor, co-chief executive officer of Inc., right, and Marc Benioff, co-chief executive officer of Inc., wear rabbit ears during a keynote at the 2022 Dreamforce conference in San Francisco, California, on Tuesday, Sept. 20, 2022.

Marlena Sloss | Bloomberg | Getty Images

3. Most Ford dealers sign up for EV plan

4. Biden touts Arizona chip investment

U.S. President Joe Biden speaks prior to signing railroad legislation into law, providing a resoluton to avert a nationwide rail shutdown, during a signing ceremony in the Roosevelt Room at the White House in Washington, U.S., December 2, 2022. 

Kevin Lamarque | Reuters

5. Russia ratchets up missile attacks

A building burns after shelling in Bakhmut, Donetsk region, on December 4, 2022, amid Russia’s invasion of Ukraine.

Yevhen Titov | Afp | Getty Images

And one more thing …

Actress Kirstie Alley

Noam Galai | Wireimage | Getty Images

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