Funding Your Business

Choosing the right lending partner will play a big part of your initial and ongoing success. While Quest Franchise Advisory Group is not a lender, we can help you better understand your financing options. Below you will find descriptions of some popular funding programs. By clicking on the blue Financial Institution of your choice, you can receive additional information and, if you choose, can be connected with a qualified lender.

Securities-Based Financing
A line of credit against your stocks, bonds, mutual funds and over 25 other types of securities. Let your stocks keep working for you, unsold, in your own name and title as always with rates from 2% to 4% depending on the size of your line.

• $100K in stocks, bonds or other securities valued at $10 + per share in account

• Interest rates are often lower than the best mortgages
• Faster funding, normally two weeks as opposed to two months or more for SBA
• Continue trading your securities, while also funding your new business
• Limited paperwork, no credit check, or personal financial statement needed
• Online 24/7 access to your account
• Security of a U.S. brokerage institution licensed in all 50 states and most world markets
• Check with your CPA first, but even your interest-only repayments may be deductible

For more information: A.B. Nicholas

IRA/401K Retirement Rollover ($ Based on account balance)

This funding option allows you to empower yourself, and invest your retirement dollars in shares of stock in YOUR company. You take control, you are able to use these funds penalty free and tax deferred.

• Retirement accounts that you have not been taxed on can be used, i.e. 401K, 401a, IRA, SEP IRA, 403b, 457, TSP, pensions, anunities, etc.
• Does not work with Roth or Inherited IRA’s
• Retirement funds must be from a prior employer, not your current employer
• Beneficial option for individuals with $50,000 or more in retirement funds

• Gain business equity, accelerate profitability and improved cash flow position
• Set aside tax deductible retirement savings, up to $59,000 per year
• Tax deferred Exit Strategy Program when it comes time to sell your business
• Allows you to start your business debt free
• There are no interest payments
• Secure funding FAST – typically 3-4 weeks
• No credit check or personal financial statement required
• Can be used to satisfy the cash injection requirements for a conventional or SBA loan
For more information: Tenet Financial Group

Small Business Administration Loans ($75K-$5M)
SBA offers a variety of government backed loan programs for very specific purposes and designed specifically for small businesses to help get their venture up and running.

• Personal Cash injection of 20%-30% of loan amount
• Collateral (up to 100% of loan amount)
• Credit scores (680+)
• Repayment ability
• Industry experience (2-5 years)
• Business Plan

• Used in addition to a Leverage Line, Retirement Rollover or Unsecured Line of Credit
• Check with your Quest Consultant to see if your Franchise is SBA approved
For more information: Tenet Financial Group

Unsecured Lines of Credit ($25K-$100K)
These lines are Unsecured Revolving Business Credit Accounts that for the most part do not report to your personal credit. Pre-approval amount within a few days.

• Minimum FICO scores of 700 or better
• No recent or major derogatory items
• At least 5 years of credit history is preferred
• Good credit history with no liens or bankruptcies

• No cash infusion requirements
• No collateral requirements
• No pre-payment penalties can be utilized in conjunction with other lending for individuals wishing to be overcapitalized and can be used for almost any business expense
For more information: Tenet Financial Group

Home Equity Loan (check with financial institution holding your current mortgage)

Also known as a second mortgage, lets homeowners borrow money by leveraging the equity in their homes.

• Must own your home Must have equity in the home (the mortgage balance is less than current value) Loan must be repaid in full if the home on which it is borrowed is sold

• The interest rate is much lower than on credit cards and most consumer loans
• Fixed-rate loans provide a single, lump-sum payment to the borrower
• Loan is repaid over a set period of time at an agreed-upon payment schedule Interest rate remains the same over the lifetime of the loan
• Terms that generally range from five to 15 years
Home Equity Line of Credit (check with financial institution holding your current mortgage)

A HELOC differs from a conventional home equity loan in that the borrower is not advanced the entire sum up front, but uses a line of credit to borrow sums that total no more than the credit limit, similar to a credit card. HELOC funds can be borrowed during the “draw period” (typically 5 to 25 years). Repayment is of the amount drawn plus interest. A HELOC may have a minimum monthly payment requirement (often “interest only”); however, the debtor may make a repayment of any amount so long as it is greater than the minimum payment. The full principal amount is due at the end of the draw period, either as a lump-sum balloon payment or according to a loan amortization schedule.[citation needed]

Another important difference from a conventional loan is that the interest rate on a HELOC is variable. The interest rate is generally based on an index, such as the prime rate. This means that the interest rate can change over time.

• Must own your home
• Borrower must maintain a certain level of equity in the home as a condition for the line of credit

• Can make interest only payments
• Interest paid was (and is) typically (depending on specific circumstances) deductible under federal and many state income tax laws
• Flexibility, both in terms of borrowing and repaying on a schedule determined by the borrower