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Did you know that women own 40% of businesses in the United States? Furthermore, ⅙ of women are self-employed. Unfortunately, women-owned businesses don’t get their fair share of loans.The Small Business Administration (SBA) shares that less than $1 of every $7 of SBA loans goes to a woman-owned business. Fortunately, business loans for women can be found through other sources as well. Jazmin, CEO and Founder of BlkSunflower, was able to get a line of credit from Shopify without even pursuing it.We will share with you several types of business loans for women-owned businesses and how to compare small business loans. We will also look at some of the best small business loans for women entrepreneurs.Then, we’ll share some other small business resources like grants, certifications, and organizations focused on helping expand women’s business ownership. Get ready to learn about the types of small business loans for women.

Small Business Loans for Women

There are a variety of business loans for women. We’ll go over 13 of the most commonly used business loans available to female business owners, including:

1. SBA 7(a) loans
2. SBA microloans
3. 504 loans
4. Bank loans
5. Online loans
6. Microloans from Non-Profits (NPOs)
7. Working capital loans
8. Equipment loans
9. Inventory loans
10. Term loans
11. Merchant cash advances
12. Invoice financing
13. Business lines of credit

Let’s start by looking at the three types of SBA loan programs.

#1. SBA 7(a) loan program

The 7(a) program is for small business owners that operate for a profit and have a demonstrable need for small business financing. This type of small business loan can be used to pay for:

• Funds for revolving needs like existing inventory and receivables
• Equipment, machinery, furniture, fixtures, supplies, or materials
• Land and buildings
• Working capital ( both short-term and long-term
• Construction and renovation
• Starting, buying, or expanding a business
• Refinancing business debt (conditions apply)

$5 billion of the SBA 7(a) loans approved in 2021 were for small businesses that were at least 50% owned by women entrepreneurs. For full details or to find an SBA lender, go to the SBA 7(a) page.Parm Bhullar and her family bought an ARCO gas station for $3.5 million. She told us:“We put down $1 million and got a $2.5 million SBA loan at 5% for the other $2.5 million.”Watch our interview with her below.[su_youtube url="https://www.youtube.com/watch?v=PZhL6_U9pWI"]Keep reading for more loan opportunities for women small business owners.

#2. SBA 504 Loans

A 504 loan is an SBA loan used for land, buildings, remodeling, and equipment financing. The SBA approved $712 million in 504 small business loans for women-owned businesses in the fiscal year 2021.If you only need business financing for physical assets, this may be the loan option for you. Go to the SBA 504 loan page to learn more about how a businesswoman can get a loan for business equipment, buildings, and land.

#3. SBA Micro-loans for women

A micro-loan is a small business lending option with the smallest loan amounts, a max of $50K. They provide financial resources that can be used for:[addlistimages]

• Fixtures
• Machinery
• Supplies
• Furniture
• Equipment
• Working capital
• Inventory

[/addlistimages]Just don’t use them for real estate or debt. There are other financial resources for small businesses to fund those purchases. Learn more about SBA micro-loans on their website.Keep reading to find out more about other types of women-led business loans.

#4. Bank loans

Traditional lenders (banks and credit unions) usually have some of the lowest costs for a small business loan, but the ease of obtaining one will vary over time.Big banks approve business loan applications about 14% of the time, while credit unions approve nearly 20% of business loans. Traditional lenders may have lower rates and better terms for established businesses, but online lenders might be better if you have less than perfect credit.

#5. Online loans

If you have a FICO score between 300 and 689 and are a new business, consider alternative lenders such as BlueVine. Most lenders have several business loan options, and the approval process takes minutes if you meet their requirements.Alternative lenders will typically offer a small business loan at a higher rate than a credit union or big bank. Still, the business owner often benefits because they approve 25% of related applications.

#6. Microloans from Non-Profit Organizations

Many mission-based nonprofit organizations offer microloans to local businesses, often focusing on businesses owned by women, people of color, and veterans. For example, Grameen America provides loans of $2,000 to $15,000 to entrepreneurial women who live in poverty. Microloans might be an excellent way to go if you can’t qualify with a bank or online lender or have a small financing gap.

#7. Working capital loans

A working capital loan can be given to women-owned businesses to cover employee pay, inventory payments, and other operating expenses. They may have higher interest rates than other business loans for women because these are meant to be short-term loans.

#8. Equipment loans

Equipment loans tend to be secured loans to help women-owned businesses buy the equipment they need for business growth. These loans will normally require a 600+ credit score and a personal guarantee.Be prepared to make the monthly payments, or they will take the equipment and your cash flow with it. You can get these types of loans online or from SBA-approved lenders under the 504 and 7(a) programs.

#9. Inventory loans

A healthy business may be able to get a loan from an online lender to help cover business expenses associated with inventory. Loan operators will usually cover these under an online term loan or a line of credit. Most online vendors will require a minimum credit score of 600 and $100K annual revenue.

#10. Term loans

Term loans are typically short-term loans that can be anywhere from 30 days to 6 years. The terms will typically be fixed interest rates.Make sure to read the terms well when reviewing online lenders. Some providers require you to pay the full-term interest even if you pay the loan off early.

#11. Merchant cash advances

A merchant cash advance (MCA) isn’t technically a loan. This financing option may be suitable for women-owned businesses that operate on platforms like Shopify. In fact, Jazmin got a merchant cash advance through Shopify. She told us:“After a few months, Shopify offered me a loan, I accepted it, and they just take a portion of my sales each day ‘til it’s paid off.”Learn more about Shopify Merchant loans or check out our interview with Jazmin below.[su_youtube url="https://www.youtube.com/watch?v=UzZ5aTbiLh0"]

#12. Invoice financing

Invoice financing is when a company loans you money against your outstanding invoices. If you have outstanding invoices of $100,000, you can get a loan on the invoices for up to the full $100K. The loan will typically work similarly to this:

1. Loan approved for $100K
2. Sends you 85%
3. Holds 15%
4. Charges a factoring fee, typically .5-3% percent per week or month
5. Charges a processing fee
6. Once paid, they return the 15% minus the processing and factoring fee

#13. Business Line of Credit

When considering business loans for women, a business line of credit is unique. It works like a credit card but with a lower interest rate. You get approved for a predetermined limit and can use it as needed. You only pay interest on the amount outstanding. Then when you pay off a portion, it is available to use again.

Business Credit Card

Business credit cards aren’t technically a business loan, but they let you pay business expenses when your expenses and income happen at different times. They are some of the highest interest rates so make sure it is worthwhile.

How to Compare Small Business Loans

Before applying for financing, make sure you have a business plan, financial statements, and a minimum credit score of at least 600, and 650+ is even better!Here are the steps for seeking small business loans for women:

1. Establish how much money you need and how to use it.
2. Compare requirements from different lenders.
3. Apply to see if you prequalify.
4. Share the tax returns, business licenses, bank statements, photo ID, financial statements, and other documents they request.
5. Sign the contract once approved.
6. Receive your capital!

If you are ready to begin the application process, we’ll discuss some small business loans for women you’ll want to consider.

Best Small Business Loans for Women

Best government-backed small-business loans for women

If you are looking for a government-backed loan, the SBA 7(a) program is the best option because they offer:

• Loans up to $5 million.
• A setting in which the federal government backs 75% of the loan.
• Loan terms up to 25 years.
• The most diverse range of permitted uses.
• Clear requirements for approval compared to other business startup loans.

To find out more about the SBA 7(a) loans, check out their terms and conditions, then go to the most active lenders list to find one to approach. Huntington Bank has the most approvals and a solid reputation, so it is a good place to start.Keep reading for more of the best business loans.

Best Line of credit for women with low credit scores

Fundbox is one of the best lines of credit for women with low credit scores. They have a 4.8 Trustpilot Score and are openly disclosive about their terms. They offer businesses owned by women lines of credit up to $200,000 as long as you meet the following requirements:

• Based in the US
• 600+ credit score
• $100,000 revenue
• Business checking account
• At least six months in business.

The drawback is that the payments are weekly instead of monthly like a traditional loan, but when the payment is made, it goes right back into the available credit (minus the interest, of course.) Check out Fundbox lines of credit to see if they are right for you.

Best Term Loan for women with low credit

If you don’t have a good credit score and are looking for a good term loan, consider OnDeck. OnDeck offers small business loans of up to $250K with 24 months to pay it back.Similar to Fundbox, OnDeck requires:

• A business checking account
• $100,000 revenue
• 600+ credit score
• One year or more of business history
• Weekly payments.

OnDeck is one of the faster lenders on the market if you apply for small business loans, so we consider it a better term loan for women business owners.

Best online Term Loan for a woman-owned business over two years old

Funding Circle and Credibility Capital are two of the best online term loans for women-owned businesses with over two years of business history.

Funding Circle

Funding Circle is a marketplace that connects small business owners with financial institutions and venture capital companies. Funding Circle can help women-owned businesses find small business loans if they have:

• More than two years in business
• 650+ credit score
• A need for $25K to $500K loans

Credibility Capital

Credibility Capital works similarly to Funding Circle, but their loans start at $50K. If this is your first loan, you will probably find better opportunities by applying for loans with lower minimum loan amounts.

Best Women’s Startup loans

SBA Microloans are the easiest to get approved for if you need a startup loan. They offer loans up to $50K that can be used for most aspects of business, except for paying off debt and buying real estate.According to the SBA website, the average loan is $13,000, which is enough to run a business for a few months as long as you are frugal with using the small business loan.These SBA loans are handled by intermediaries that each have their own requirements. To find one in your location, use the SBA lender match.

Best Line of Credit for Women-owned Startups

BlueVine is one of the quickest ways for women-led startup companies to get lines of credit up to $250,000 at 4.9% interest as long as they meet the following criteria:

• 600+ Credit score
• Corporation or LLC
• At least six months in business
• At least $10K per month revenue
• Not based in Nevada, North Dakota, or South Dakota

Small Business Loans for Black Women & Other Female Minorities

Most small business loans for female minorities are classified as loans for economically and socially disadvantaged communities. They do this because financial providers cannot discriminate based on sex or race. They legally offer additional assistance to neighborhoods with less wealth, though.To establish whether you would qualify for loans under this category, review the SBA Contracting Assistance Programs.These programs offer minority-owned businesses benefits that might include:

• Business training
• Funds to help SBA women-owned businesses, minority business owners, or rural business owners
• Small business grants for women
• A portion of all government jobs is reserved for each of the disadvantaged groups.

This is the primary place to find women’s business loans from the government.

Additional Funding Options for Women-Owned Startups

In addition to small business loans for women, there are a variety of funding options that women should look into, including:

• SBA grants for women: Grants are free money to help achieve goals set by the government. You have to get certified as an SBA woman-owned business to qualify for these. The link to apply is in the business loans for minority women section.
• Equity financing: Selling a percentage of ownership for business funds. Primarily used for billion-dollar ideas and offered by venture capitalists.

• Rollover Business Startups (ROBS): Take a 401K or IRA with more than $50,000, roll it over to a new 401K held by a newly formed corporation, and sell your company stock to your 401K to access business funds.

• Small business grants from non-profit organizations (NPOs): You can use a site like GrantWatch to filter grants by type and location.

Read our blog on how to fund a business to learn more about ROBS and other funding options.

Other resources for female entrepreneurs

Women entrepreneurs have a ton of resources to help them get ahead. Don’t limit yourself by focusing only on the application process for grants and small business loans for women.Look for every beneficial opportunity to increase your customer base and cash flow. If you do those two things, you’ll eventually find a financial institution that will provide your startup business loans that apply to you.Make sure to check out the following resources:

• SBA Office of Women’s Business Ownership: Everything the SBA offers for women, including special business classifications, grants, and learning opportunities.
• National Association of Women Business Owners: Subscription-based membership that provides access to learning modules, supplier databases, and member profiles to help you navigate the business world more easily.

• National Women’s Business Council (NWBC): The NWBC is primarily focused on creating a fair political environment for women business owners.

These organizations provide various resources, business training, grants, mentorship programs, and more to help female entrepreneurs succeed.

Women's Business Centers

You’re likely to encounter more than 100 Women's Business Centers run by the SBA throughout the U.S. Get access to training and resources to help you achieve your goals.

SBA's Women-Owned Businesses Portal

The SBA Women-Owned Businesses Portal is a fantastic resource for blogs, online training, and other resources to develop your business.

National Women Business Owners Corporation (NWBOC)

The NWBOC is the first organization to certify women-owned businesses. You can apply on their site, and if you do the certification plus program, you’ll have the knowledge and skillsets to procure government contracts successfully.

U.S. Women's Chamber of Commerce

U.S. Women's Chamber of Commerce is another organization that focuses on certifications and writing more equitable policies for women-driven businesses. It’s an excellent organization to network, stay up-to-date on politics, and help write legislation.

Womensphere

Womensphere is an incubator specifically for women focusing on developing a more humane, sustainable, and equitable world through the advancement of woman-owned STEM businesses.

Grants for Women-Owned Businesses

Women have a ton of opportunities to get business grants. Apply for as many of them as possible, but remember only to borrow what you need. We’ll discuss some of the most famous ones here.

Eileen Fisher Women-Owned Business Grant Program

Eileen Fisher’s Women-Owned Business Grants provide $200,000 divided by up to 10 recipients who manage 501c3 non-profit organizations focused on achieving a more equitable and sustainable future.To qualify, your business must have been operating for at least three years with annual revenues under $1 million. Your business must be founded on creating environmental and social change.

WomensNet Amber Grant

WomensNet awards a female entrepreneur a $10,000 grant each month. At the end of the year, one of the winners will receive a $25,000 Amber Grant. Fill out the application and pay the $15 application fee to qualify for all of their grants.

37 Angels

37 Angels is a team of female angel investors that provide between $50K and $250K of equity funding to women-owned small businesses. Start the application process on Gust.

State-Specific Programs

Some states have grants to encourage female entrepreneurship. Check to see if your state does on GrantWatch.

How to Get a Business Loan With No Money

1. Make sure you don’t have bad credit. If you have below a 600 credit score, you probably shouldn’t bother with the loan application process. A score of 650+ will also likely provide a significant difference.
2. Make sure you have a killer business plan. Read our blog about how to write a business plan.
3. Be prepared to get a secured loan using a home, equipment, etc., to guarantee the loan.

Slay All Day!

Women entrepreneurs have been killing it lately—regardless of the type of small business loans they’ve had or not had. I love seeing all the inspirational stories of female entrepreneurs who rise against the odds to manifest their dreams.What women-owned businesses do you find most inspirational?

Business ideas

Real estate investing is one of the primary drivers of wealth in the United States. It's so easy, an immigrant with less than $100 built a $100 million real estate portfolio! We’ve gathered his tips to show you how to invest in real estate and make a great living.Thach Nguyen was the youngest realtor in Seattle when he started in 1991. His first mentor taught him to market to people he didn’t know, then his second mentor taught him to acquire real estate. That's when Thach Real Estate Group was born. Today, he makes around $100K net profit each month from the $800K revenue he brings in on assets worth nearly $100 million.Thach shared advice on how to:

• Create passive income
• Invest in real estate actively and passively
• Use online platforms
• Make the most out of a real estate website
• Earn a great living without being a personal finance wiz

He covers all of this in his course on building a $100M rental portfolio.

How to Invest in Real Estate

We'll show you how to invest in real estate in this step-by-step guide. Just follow this easy process to get started.[su_note note_color="#dbeafc"]If you're already familiar with real estate investing, jump ahead with any of the links below.

1. Start with a real estate investment plan
2. Consider what is the best tax structure for your income and scenario
3. Look at active investment options
4. Find ways to invest without buying property
5. Get real estate software to manage investments
6. Find investors
7. Keep growing your business [/su_note]

Step 1. Start with a real estate investment plan

Before you begin buying real estate, you'll want to develop an investment strategy. Thach explained:[su_quote]A personal finance plan is important before you start. Most people will start by house flipping or wholesaling real estate.[/su_quote]Check out our interview below.[su_youtube url="https://www.youtube.com/watch?v=TWCzwn3R78A"]Your plan doesn't have to be complex. It can be as simple as answering the following questions:

1. How old do you want to be when you stop working?
2. How much do you want to make?
3. How much is the average rent in your area?
4. How much profit do you make on each property?
5. How many rental properties do you need to own?

How to Get Started In Real Estate

Another real estate entrepreneur, Emma Powell, suggests considering whether you prefer owning physical property or indirect real estate investing.[su_quote]There are four levels of investment management levels you can choose:

• Passive: Invest in other people's deals.
• Hands on: Start a joint venture.
• More active: Buy and rent.
• Most hands on: Create your own investment firm.[/su_quote]

Once you've decided how hands-on you want to be, you should consider how different types of investments will impact your finances.Check out our interview with Emma about how to get into real estate below.

Step 2. Think about your taxes, finances, and regulations

Different types of investments will impact your taxes and finances. Consider:

1. Do you want a liquid asset (stocks, bonds, ETFs, publicly offered REITs) or to buy properties?
2. Are you an accredited investor? Accredited investors are people who make over $200,000 or have a net worth of over $1 million, excluding their first home. This gives you access to private equity opportunities. Learn more.
3. Do you need monthly or quarterly distributions? If so, you don't want to invest in capital appreciation models or real estate developers.
4. What is your tax income bracket? REITs count as normal income. If it's not in a retirement fund, it will create a major tax consequence.
5. Are you a real estate professional? You only qualify as a real estate professional if you spent more than 50% of your working hours managing real estate, own 5% or more of the company, and worked at least 750 hours during the year. Check the IRS website for more information.

[su_note note_color="#dbeafc"]

The IRS loves going after real estate investors who do not have a real estate agent license. My family has dealt with two audits regarding the real estate professional rules.If you are going to try to claim more than the $25,000 limit for normal real estate, you need to make sure you have documentation that is created the year you are filing for. That means you need to consider the following:

1. Take detailed notes of date, time, and what work was performed.
2. Make sure to have security cameras on all your rental properties—and time stamp the videos. Make a hard copy of the video before the year ends.
3. Identify everyone in your phone that is real estate related as “Name (real estate).” Make sure to print out your phone bills before December 31 each year.
4. Save all expenses related to the tax claim. Use accounting software to automate documentation.
5. Use a mileage tracker to document miles and time spent commuting.

Read IRS 2021 Publication 925 for the regulations regarding the real estate professional classification.[/su_note]

Step 3. Consider ways to invest in real estate actively

There are so many options for real estate investors. You can choose to buy your own home, buy rental properties, flip houses, or use investment vehicles to get exposure to real estate without being actively involved. Emma Powell told us:[su_quote]You don't have to have money, but someone has to. Raising money is at the core of what we do.[/su_quote]

Invest in Your Own Home

Before you start investing in real estate to generate residual income, you'll want to buy your own home. Owning your own home reduces the impact of inflation and is one of the greatest factors in building wealth.61.9% of households own a home, while the median household net worth is $140,800. Just by owning your own home, you’ll be building more wealth than 50% of the population.If you don't already own a home, you can qualify for a first time homebuyer credit and buy a 4-plex to earn rental income on your first real estate investment. You'll be glad you own a primary residence because regular income rarely outpaces inflation for the majority of the population. If you have a mortgage payment locked in for the rest of your life, you build wealth as your wages increase.[su_note note_color="#dbeafc"]

I was talking to a friend the other day about renting vs owning and it really illuminated how important this is. He bought his home in 2018 and is paying around $800 per month. Meanwhile, I rent and have seen my rent go up from $800 to $1,200, which means I’ve spent an extra $11,472 in the last four years.[su_table responsive="yes" alternate="no" fixed="yes"]

[/su_table][/su_note]

Consider House Hacking

Many people find living near their work too costly, so they buy local real estate with multiple units. If you buy a quad-plex and live in one unit, you still qualify for the first-time homebuyer credit, can reap the tax benefits, and have reduced income requirements.Here's an example of how it works for a $555,000 single-family home vs a quadplex:*According to my lender, the maximum suggested debt/income ratio is 45%. If you have other outstanding credit, the income needed will be higher.So effectively, you can cut the amount of income you need by over $5,000.

Buy Rental Properties

6.9% of the population owns rental properties. Furthermore, those who own rental properties have an average of $175,000 more net worth than those who don't. Plus, they get additional cash flow from the rental properties. Emma told us:[su_quote]Low volatility rental properties include warehouses, self-storage, and multi-family units, while single family rentals have a little more volatility. Offices and other buildings have the highest volatility.[/su_quote]You'll need to consider whether each rental property justifies the expense. Most real estate investors say they expect owning rental properties to generate a 15% return on investment for each rental property.

House Flipping

If you have skill at repairing properties, you might want to buy real estate that needs repairs for less than the going rate in the area, fix them up, and sell them.Santino Fillipelli runs a construction company, real estate brokerage, and real estate investment company. He buys homes to flip or repair and rent. Find out his approach to real estate investing.[su_youtube url="https://youtu.be/qhvLB-MtVnY"]To make any of these a more passive investment, you can consider hiring a property manager to assist you with them. It will reduce your profits and tax deductions, but it's easier than managing it yourself.

Step 4. How to invest in real estate without buying property

The following ideas are ways to invest in real estate without buying property. These are good for those who are not ready to make the commitment of buying a property and renting it out.

Airbnb Co-Hosting

If you want to get into the real estate market without direct real estate investments, Airbnb allows co-hosting. Co-hosting works really well if you own a cleaning business, handyman company, or general contracting business. You just negotiate a deal to act as a property management company and take a percentage of revenue from the investment property owner.Chris Mondragon makes money from real estate properties by managing their cleaning and greeting customers—all while making over $1M per year as a cleaning business. Find out more about managing Airbnbs as a service company below:If property management doesn't sound right for you, keep reading for more real estate investment opportunities.

Real Estate Investment Trusts (REIT): How to Invest in Real Estate Stocks

One of the least expensive ways to get into real estate is real estate investment trusts. These companies are effectively real estate crowdfunding. A real estate investment trust sells shares and buys property. They then pay the investors the profits from the rental payments.REITs may be sold on the stock market or be privately listed. The publicly traded REITs tend to produce lower returns but are easier to sell. You will normally need to be an accredited investor to access privately held REITs.The following table consists of 27 REITs that are currently generating income of more than 8% based on a screener using TD Ameritrade on 9/3/2022. (I have not done further research to evaluate the quality of these real estate investment opportunities. Please remember to do your own research before buying.)

Real Estate Investment Groups (REIG)

Real estate investment groups buy large properties like office buildings, multi-unit buildings, and shopping centers. The REIG can invest in real estate and earn profits from various real estate investment strategies:

• Acting as a property manager
• Flipping houses
• Running Airbnbs
• Financing building projects

A real estate investment group will not normally qualify for REIT status, but it can capitalize on a wider variety of real estate investing opportunities than REITs.

Real Estate Limited Partnerships (RELP)

Limited partnerships are a type of private equity where you have a general partner who will manage properties and limited partners who indirectly own the real estate property. Most of the income generated is from the sale of properties, but they may generate passive income if the cash flow and profits are high enough to justify routine payouts. The minimum investment will normally be $2,000+, but it is common to require buy-ins of $100,000 to $1 million.

Real Estate Mutual Funds

Mutual funds are real estate investment tools that help you get exposure to multiple real estate stocks. These make it easier to invest in an industry without analyzing particular stocks.These funds normally have minimum investments between $500 and $2,000, and you can add additional investments regularly. Mutual funds have expense ratios ranging from .03% to 4%. The higher the percentage, the higher the gains have to be to develop wealth. I personally prefer ETFs, but review this article if you want to find good real estate mutual funds.

Real Estate Exchange Traded Funds (ETFs)

If you’re ready to start real estate investing but want to maintain diversification within the industry, real estate index funds are a good way to get started. Real estate ETFs buy shares of companies involved in the industry and then sell ETFs that give you a percentage of the ownership of all the holdings. These are basically mutual funds with much lower minimum investments, lower fees, and are tradeable on the stock market.I've compiled the top 20 real estate ETFs based on the Distribution Yield on 9/3/2022. (These real estate funds are not investment advice. Make sure you research each before you invest.)

Crowdfunding Real Estate Investing Platforms

Real estate crowdfunding has become an easy way for a new real estate investor to enter the market. The following companies are some of the best real estate crowdfunding platforms.I have ranked the online real estate platforms based on the investment minimum. Obviously, this should not be taken as financial advice, but the following strategy is something to consider:

1. Start with Fundrise to get familiar with how real estate investments work.
2. Reinvest dividends.
3. Build up to YieldStreet for potentially lower fees.
4. Once you reach $5,000, go for RealtyMogul or Equity Multiple.
5. Build up to CrowdStreet.
6. Keep repeating until you decide which ones you like better and focus on them.

These real estate crowdfunding opportunities offer both private REITs and the ability to finance projects. All are private equity so they are not highly liquid like publicly offered REITs. Expect to hold them for three to five years.

Step 5. Get real estate software

Emma gave us a lot of advice about software. We asked her what the best tools to manage real estate investments are. She told us:[su_quote]Pencil and Paper or a spreadsheet. It doesn't have to be fully optimized.[/su_quote]She went on to explain:[su_quote]From a software standpoint, an investor management platform is most important.[/su_quote]She recommended the following software:

• Syndication Pro: Publish offerings, automate distributions, and manage investors with this CRM that meets SEC compliance issues.
• Active Campaign: Automation software is good for those who need a custom automation that isn't included in Syndication Pro.
• REI Blackbook: While Syndication Pro is intended for managing investors, REI Blackbook is meant for wholesaling, renting, and flipping properties.

If you do a little of all types of real estate, you can use the three together.

Step 6. Find real estate investors

Thach told us a lot of his success is because:[su_quote]I’m a social media fanatic. I post 7 days a week. I post 2 videos each day on TikTok, 2 on Instagram, and 2 on Facebook live. Then once a week I post on YouTube. I just tell them everything I learn on my real estate journey.[/su_quote]Emma agrees that social media is the best way to position your real estate investment group as subject matter experts.[su_quote]Networking is the most important skill.[/su_quote]She discussed the website as one of the most important tools to find investors.

Website

Emma suggested three specific portions of the website she finds critical:[su_quote]

• Hire a professional photographer for your website.
• Include a bold vision statement and a bold picture in the home page banner.
• The ‘about me’ page should answer, ‘What are you going to do for them?’

[/su_quote]

Step 7. Keep growing your investments

You'll want to take the profits and reinvest them. This concept is called compounding, and it builds net worth fast.If you take $100K and reinvest 15% profit each year, you'll have over $6.5 million after 30 years. If you only reinvest 10%, the value drops to $1.75 million after 30 years. Meanwhile, just the growth from the appreciation of the asset would theoretically be worth around $400K if the historical national home price values continue.Mike Andes told us:[su_quote]What can you do to add value to make it worth more? Add a unit? Rent it as an Airbnb? There's always opportunity![/su_quote]Check out our interview with him below.[su_youtube url="https://www.youtube.com/watch?v=AXeqIxPVn6A"]

Can I Invest Just $100 in Real Estate?

Yes! REITs, ETFs, and Fundrise are ways to generate income without owning real estate. Don't wait to build wealth and cash flow just because you don't have the income and credit score to finance properties on your own and make mortgage payments.

How to invest in real estate with no money and bad credit

Learn how to wholesale real estate. Find distressed properties. Make an offer to help the homeowner sell their property, and sell the single-family home to other investors for a profit.This is a form of flipping houses that doesn't require cash reserves or a real estate license. Learn how to wholesale real estate.

How to invest in real estate with little money

If you're looking for ways to invest in real estate with small amounts of money, you'll want to limit your considerations to a mutual fund, ETF, REITs, or other financial instruments that lets you build a real estate portfolio without a massive down payment.

How do beginners make money in real estate?

I'd suggest using house hacking. Above, we analyzed the returns of buying a house as an investment versus buying a quadplex. We found that spending $555K on a quadplex with 3% down would:

1. Reduce your personal expenditure on housing by nearly 75%.
2. Build equity faster because you are only paying $1 for every $4 purchased.
3. Give you the ability to buy another quadplex within the first five years.

Which Investment Is Best in Real Estate?

Emma told us:[su_quote]Self storage, warehouse, and multi-family are low volatility investment real estate.[/su_quote]She also warned that offices and single family homes are at higher risk, but it's still better owning properties than not.A multi-unit building is normally the safest real estate investment. This includes buildings like apartment complexes. Everyone needs a roof over their head, and the chances of owning a completely vacant apartment complex are slim.That means there's less volatility than investing in a single-family home because you have multiple tenants paying rent. If you own a single-family home and the tenant doesn't pay rent, you have to cover the monthly mortgage payment and property taxes. If you can't, you risk defaulting.

How to Invest in Real Estate Book Options

Grab your favorite beverage and read up on how to invest money in real estate. Here are some Amazon best sellers:

• Buy, Rehab, Rent, Refinance, Repeat: The BRRRR Rental Property Investment Strategy Made Simple by David M Greene
• How to be a Real Estate Investor by Phil Pustejovsky
• The Book on Rental Property Investing: How to Create Wealth With Intelligent Buy and Hold Real Estate Investing by Brandon Turner

A Few Words of Caution

While real estate investment is enticing for its profitable returns, industry experts recommend having a diversified portfolio to increase your net worth. Different industries and segments perform better at different points in the economic cycle. That means that you don't want to focus 100% of your net worth on real estate investments. The median household only has about 35% of its net worth in real estate.Make sure to remember:[su_note note_color="#dbeafc"]

• Many financial instruments are governed by the Securities and Exchange Commission.
• Past performance does not predict future performance.
• After-tax profits are more meaningful than pre-tax profits.
• Talk to a financial consultant to evaluate how to buy property within your financial scenario.
• Avoid high fees.[/su_note]

So What's the Best Way to Invest in Real Estate?

The best way to invest in real estate will depend on your personal situation and local market. We’ve given you information on:

1. Defining Investment Objectives
2. Property Investment Taxes
3. Traditional Real Estate Investing
4. Equity Investments
5. Online Real Estate Platforms
6. Growing Your Investment Properties

For a step-by-step guide to developing your rental portfolio, we highly recommend Thach's course, which covers all of the above and more.Now it’s up to you to decide how you want to start investing in property. What method of real estate investment do you prefer?

Business ideas

Have you ever wondered why so many small businesses fail?The main reason is they don't have the funds to keep going. Whether that is because of lack of revenue, too few reserves to properly scale and conserve resources, or mismanagement, doesn't matter. For small business owners to succeed, they need to understand how to fund a business.We talked with Paul Akers, Founder of Fast Cap, and Mike Andes of Augusta Lawn Care. Paul has created hundreds of products over the years, while Mike has sold over 60 franchises in 2 years. They both know a little about funding a business and managing it to make money.First, we're going to give you information on preparing to get business funding. Then we'll help you establish the best ways for you to fund your business through self-funding, loans, sharing equity, crowdfunding, and some crypto funding concepts that most business owners aren't utilizing yet.Throughout it, I’ll provide resources and input from our interviews with Mike and Paul. Let's make sure you have what you need to truly benefit from this article.

Preparing to get funding

Before you look for ways of raising money for business, you need to be prepared. Start with our guide to starting up a business. You should do the following tasks before pursuing funding if you haven't already:

1. Performed market research. If you haven't we suggest you start with our article on market research.
2. Performed market validation to verify that there is enough demand for your product or service. If you haven't, check out our blog on market validation.
3. Written a business plan. You'll need one especially if you are trying to pursue funding from external sources. If you haven't, we've got you covered there too. Check out our blog on how to write a business plan.
4. Hopefully, you also have a name. It won't look very good if you say, "Hey will you invest in my small business that has no name?" If you don't, go try the following business name generator.
5. Know how much funding you need. Let's look at that more.

How much money do I need to start a business?

Every business is different, but you can start many businesses for under $50,000. That won't necessarily guarantee that $50K will cover everything a business owner needs to run the business and live, but it's typically the minimum money to start a business and provide for yourself.Here's how I look at it when it comes to financial projections:

Step 1. How much money do you need to live for five years?

You absolutely have to make enough money to cover your bills regardless of cash flow issues or low revenue. Most businesses fail within five years, so how much do you need to make to cover five years of your necessities?

Step 2. What are your additional business expenses?

What additional business costs are you going to have over those five years? In my case, it's a computer every few years and a few thousand dollars of software each year, but for many businesses, the break-even point is somewhere between $60K and 120K a year.

Step 3. What are other sources of revenue and when do you receive them?

What other sources of revenue do you have? When do you receive them, and how much of them can be applied to business funding? Add these to the third sheet in the workbook I created for you.

• Once you know the answers to the first three questions, you can create projections for your total costs and earnings for the next five years. I would break them down monthly because monthly will sometimes show cash flow issues that strong annual revenue and growth will hide.
• At this point, you should have an idea of the budget for your life over the next five years. Assuming $48K per year living expenses and $60K per business expenses, you are going to need $540K minus your current earnings for the business to make it to the 5-year mark.

Now you should have an idea of how much small business funding you'll need to get to make it to the point where your business is much more likely to survive.Paul told us:[su_quote]If you can keep your business open for 10 years, there is no way you aren't successful.[/su_quote]Keep reading to hear about the most common source of small business funding.

Most small business owners bootstrap

If you can fund your small business yourself, that’s helpful because this is by far the best way to get funding for small businesses. Paul told us:[su_quote]The less money you have to work with, the wiser you spend it. You can’t be trying to live in the nicest neighborhoods, drive the nicest cars, and expect to be able to bootstrap it. You’ve got to be smart.[/su_quote]A small business owner will typically have several options to be able to self-fund:

• Personal savings
• Increase your disposable income
• Sell assets
• Loan yourself money from IRA/401-K
• Rollover as Business Startup (ROBS)

You will probably use many of these in parallel to get the best results.Let's look at each.

1. Personal Savings

You can use savings as a funding option. This method is the most common. Using your own finances as a funding method has the benefits:

1. You retain complete control
2. No monthly payment on a loan
3. Don't have to pay interest

Unfortunately, it can be the slowest way to create business growth because funding is limited to what you have in savings and your disposable income.

2. Increase your disposable income

Disposable income is increased through two methods, more earnings or cost savings. Most places have a limit on how much you can cut your spending so you'll probably want to increase your earnings.Ways to increase your earnings include:

• Asking for a raise if you have been performing well at work.
• Taking on a second job. Some people either choose to do Uber or Lyft so they can control their own schedule.
• Perform freelancing in the field you plan to start a business. We'll discuss this more below.

Freelancing on sites like Fiverr or Upwork is almost identical to running a business but without as high up-front costs. It will earn you extra money, develop your business skills, and create built-in referrals for your new business. I highly recommend it.If you've never run a business before, remember to charge more along the line of what your employer makes for their service than what they pay you. Companies aim to keep wages at under 30% of the costs.

3. Sell Assets

Many people will sell assets to get money to start a business. One of our competitor's blogs recommends you sell your car and ride a bike, but that seems a bit extreme especially if your business will require you to get around town.If you have a bike (and no car), use it to your advantage. Our editor knew a guy who started his business by selling kombucha from a big wooden box connected to the front of his bike and turned it into an epic brand. Check out BiciCafe if you are in the U.S. Virgin Islands.You are better off selling assets like stocks or rental properties, but if you do sell them to get new business funding, focus on ones that fall into long-term capital gains. Later, I'm going to tell you some tricks that can really hyperdrive this scenario, but they involve crypto.But for now, let's talk about taking loans from your IRA or 401-K.

4. Take money from your IRA or 401-K

You can use your retirement accounts for money to start a business, but the next option is a way better solution. I started my business this way and am kicking myself because the assets I sold have quadrupled since then. I'm still going to explain this to you though.A Roth IRA can be withdrawn tax-free because you already paid taxes on it, but you can pull out money from a traditional IRA or 401-K, but you incur a 10% penalty and back taxes. Sometimes you can structure this as a loan and pay it back to avoid those factors, but you only have five years to pay them back.I strongly recommend talking to a tax professional about how to get funding this way especially if you have large amounts.Let's look at ROBS next.

5. Rollover as Business Startup

ROBS are more complex business strategies that require the following:

1. Create a C-Corp.
2. Create a 401-K.
3. Rollover existing retirement funds to the new C-Corp 401-K.
4. Buy C-Corp Stock with 401-K.
5. Fund the business with the proceeds from the stock sale.

This allows you to completely avoid taxes on the withdrawal of money from the 401-K, but it creates some unique benefits and challenges on top of that. They include:

• Corporate tax and personal tax if all earnings are not paid as income on paychecks.
• Unlimited gains and losses, with rollovers to different years.
• Corporate taxes are lower than personal taxes once you reach a certain earnings level.
• You can give yourself more benefits.
• You are required to offer any employees the same benefits you receive.
• Medical is fully deductible.
• Additional filing requirements.

Most of these are benefits, but double taxation and employee benefits could be a challenge if you aren't good at predicting your income. I'd suggest you review the following materials before you decide to take this option:

• Guidant Financial's explanation of ROBS
• IRS ROBS Guidelines
• IRS Corporate Formation

You can get help with a ROBS from the following companies:

1. Benetrends
2. Guidant Financial
3. Pango Financial
4. Business Funding Trust
5. MySolo401k

Keep reading for more on how to get funding for a small business.

Borrow Startup Capital

If you can't get money from your assets, it's time to look at how to raise capital for a business through borrowing it. The most common are:

• Friends and family loans
• Credit cards
• Refinance your mortgage
• SBA loans
• Traditional loans
• Personal loans
• Peer-to-peer lending platforms

6. Friends and family loans

If you have friends and family, they may be willing to provide loans for you to start or expand your business, but this strategy can end up putting strains on relationships. You don’t want it ending up like the video below.[su_youtube url="https://www.youtube.com/watch?v=QdHabb5kpfE"]Remember to treat it like a business arrangement. Show them your business plan, give them the same pitch you would a bank, and honor the terms of the agreement. There are third-party providers who will manage the loan for you. A couple of options are:

• Zirtue
• DCU
• Some banks or financial consultants, but most don't advertise it online.

Keep reading for other options.

7. Credit Cards

Credit cards are a convenient tool to use to help fund a business as long as you can pay them off in full every month. Unfortunately, if you can't, the high-interest rates can end up costing you a ton of money.Most places will accept them, but there are some places that are cash only. Avoid using cash advances because they will normally charge you a fee or extra percentage in addition to removing the grace period for the interest.If you can only pay with a credit card, most credit cards will allow you to send via payment apps without a cash advance fee, but check the terms of your credit card to verify before using this tip. use apps like:

• Cash App
• Venmo
• Paypal

These apps will let you send money into them and commonly avoid the cash advance fee. The apps charge a higher fee for credit cards than paying with a bank or debit card though. You can then transfer it to a debit account where you can take out money. This preserves your interest grace period and saves you a lot on interest payments.Almost every bank offers temporary 0% interest rates, but you'll need to read the fine print of each of them. Some of the best ones are:

• Wells Fargo Reflect – Longest introductory rate as long as you meet the payment requirements.
• Business Advantage – Pay transactions made in the first 60 days with 0% interest over 18 months.
• Chase Freedom Unlimited – Example of their offerings 15 months 0% interest, $200 cashback on first $500 if spent in the first 3 months, 5% cash back on groceries (first year) and travel, 3% on pharmacy and dining, 1.5% on everything else.

All these require a 690+ credit score for a good probability of getting one and 800+ to get the best ongoing interest rates. If none of these sounds like the right one for you, consider how to get a loan from traditional lenders

8. Tap Home Equity

If you have ever wondered how to raise money for a business through your home equity, good news, there are several options to get value out of your home including:

• Home Equity Line of Credit – A secured loan using your house as the security that typically can be used for 10 years with just paying the interest, then the next 20 years you pay interest, plus principal.
• Refinancing Your Mortgage – Refinancing your mortgage works by getting a new loan and paying off the old loan, while pocketing the equity. It basically puts you back where you started, but hopefully with a lower interest rate, payments, and the ability to make a higher return on the equity.
• Second Mortgage or Home Equity Loan – This sounds like a horrible option to me, but I figure I should include it. With a second mortgage, you are taking out another mortgage on the house for the difference between the market value of the home and what you owe. It comes with higher interest and a second home payment each month. I don't love the idea.
• Reverse Mortgage – If you own your home outright and want to pull money out over time, this might be the method for you. You get to keep the home, the buyer pays you monthly, and when you die they own it. Only problem is the home is no longer yours to give to your kids or sell if you desire to do so.

The first three are available to a homeowner with a good personal credit score from a local bank, credit union, or traditional bank. I suggest reaching out to credit unions near me first because they tend to offer better rates, but you'll also deal with a lot of real estate fees that are not present in other loans.Reverse Mortgage Daily is a good resource to learn about reverse mortgages if you are interested. If you fund your business this way, realize that you will have to budget more effectively than with other equity financing options.

9. Personal Loans

If you can get a personal loan to start a business, it may be more cost-effective than real estate loans because it avoids all the fees. You'll need a great credit score and will still have to pay interest.You can apply at traditional banks, online lenders, and credit unions. When you apply, ask if you can have your business included on the personal loan so you can start earning business credit. That way, the next time you apply you may be eligible for traditional bank loans through your business credit.We've talked about funding options for people, but now it's time to look at how to get money for a business through SBA loans.

10. Small Business Administration (SBA) Loans

The Small Business Administration (SBA) was founded in 1953 in a bill passed by Congress to help small business owners succeed. The SBA offers a variety of assistance to new and established businesses including:

• Education – Over 300 different learning objectives surrounding planning, launching, managing, market research, business growth, and mentoring.
• Small Business Grants –Initiatives that are important to the community such as Science Technology Engineering and Math (STEM) businesses.
• SBA Loan Program – Backs bank loans to encourage financial institutions to offer business credit. You can seek funding from banks, credit unions, and nonprofit lenders.

There are three types of SBA loan programs that you can apply for when wondering how to get funding for a business idea:

1. 7(a) loan program
2. 504 loans
3. Microloans

Let’s look at how to get money to start a business through each of these loan programs.

7(a) Loan Program

7(a) loans are the most common type of small business loan that the SBA guarantees. You can get them from traditional banks and credit unions assuming:

• The business is profitable
• You cannot use any other funding options
• You can prove the need for the loan
• The business is in good financial standing with all government agencies

7(a) loans can range from $5,000-$5 million and the SBA provides a guarantee to the lender of 85% for loans under $150,000 and 75% for loans over $150,000. These loans are primarily used as funding options for buying large equipment, inventory, and real estate, but under some scenarios, they allow restructuring of debt.Review the SBA 7(a) loans page to find out more about the 7(a) program or go talk to your local small business development center to talk to someone about the programs they offer. To apply for a loan, go to the lender match to find potential lenders.You'll need to answer a few questions about how much capital you need, whether you have financial documentation, and how the funds will be used. Then they will send your information to alternative funding options. I ran one for one of my business ventures and it came up with nine potential lenders.

504 Loans

504 loans are a much narrower use loan that is only available for major assets such as equipment, land, or buildings. They cannot be used for working capital and they have strict requirements including:

1. Net worth under $15 million
2. Under $5 million revenue each of the last two years
3. Profitable businesses only
4. Only offered through Certified development companies (Find one near you on the Find Local Assistance page.)

This may be the option if you need to fund your business expansion.Keep reading to learn about microloans

Microloans

Microloans are much smaller SBA-backed loans that are available for amounts up to $50,000. They cannot be used for real estate or debt repayment, but are great for working capital, tech improvement, and redecorating your location.Microloans are 8-13% interest with a six-year time to pay the loan. Go to the SBA page about microloans to learn more.Keep reading to learn more about a traditional bank loan.

11. Conventional Small-Business Loans

You can also apply for a traditional business loan from banks, credit unions, or online lenders. When applying for bank loans for your own business, you should expect them to want a higher credit score, good financial history, and a great business plan because traditional financing comes without the financial protection of an SBA loan.The loans range in their offerings from each provider, but you can expect to pay more interest and get shorter loan durations. Be aware that shorter durations mean higher payments. Paying a loan quicker may consume money that could be used for reinvesting in the business.Before you apply, make sure to raise your credit score as high as possible, and join a credit union to increase your chances of getting a loan or a business line of credit.Wells Fargo, Bank of America, and Chase provide over $200 million worth of business loans, but other smaller banks like Huntington Bank are also business-friendly. No matter who you apply through, don't be surprised if you are offered small business funding that is less than you apply for.

12. Peer-to-Peer Loans

Peer-to-peer loans make it where people can borrow money from other successful businessmen, companies, and investors. It will work similar to other types of loans because:

• They check your credit
• You'll still need the same documentation
• They report credit defaults
• You still have to make monthly payments

Unlike traditional banks, platforms like Funding Circle and Lending Tree have a variety of lenders competing for your loans which should save you money and time compared to going to multiple banks. Funding Circle was recognized as the best small business loan of 2021 by Money. Unfortunately, if you live in Nevada, you can't get them.Now you have ideas of how to get startup money for a business from lenders, but you can also sell equity.

How Much Money to Start a Business that Sells Equity

Businesses that can sell equity tend to be at least a $100 million market opportunity. If your market opportunity is not legitimately $100 million, go back to the section on ROBS above because your 401K is probably the only one that will buy equity from you.If you've ever wondered how to get start-up money for a business from venture capitalists, angel investors, or incubators and accelerators, they focus on buying a portion of your company which means you'll be sharing your profits with them.Check out our playlist of Entrepreneurs who made deals on Shark Tank for insight on how to get deals with the big fish.[su_youtube url="https://youtu.be/xfzppdEsAMM"]These options are typically reserved for businesses that will make hundreds of millions of dollars. However, when you are just trying to make a few million from your business, you don't want to give up any equity.

13. Venture Capitalists

Venture Capitalists (VCs) focus on buying equity in a business that has huge potential, helping it grow, then making millions or billions when it holds its IPO. IF you are going to try to work with a VC, you need to have a lawyer who is extraordinary at contract law.If you've ever watched The Social Network, it shows how Mark Zuckerberg started Facebook by stealing the idea, then getting his CFO to sign a contract where all the diluted shares came out of his portion of ownership, screwing him out of billions. Don't let that happen to you.

14. Angel Investment

Angel investors are similar to venture capitalists, but they are typically a single person as opposed to a major corporation. These investors will offer venture capital in a promising project they believe in, but it is hard to get angel investors' attention because they have so many people competing for the same funds.These are some of the best places to look to find angel investors:

• MicroVentures
• Tech Coast Angels
• Social Venture Circle
• Golden Seeds LLC
• Band of Angels
• Hyde Park Angels
• Alliance of Angels
• AngelList
• Angel Capital Association

Now that you know about VCs and angel investors, let's talk about incubators and accelerators.

Incubators and Accelerators

Incubators and accelerators are typically run by VC's and Angel investors that want to make sure their venture capital firms get a return on their investment. They will typically supply:

• A coworking space
• Lawyers
• Administrators
• Financial consultants
• A marketing team
• Potentially, a skilled team of developers

Basically, they are helping the entrepreneur have the team and staff they need to succeed at creating billion-dollar companies. If you have an idea that you think is a billion-dollar idea, search for incubators near you.

Miscellaneous Funding Opportunities

The following are miscellaneous options for funding that some businesses may be able to use.They are more challenging than some of the other strategies, but they may have benefits if utilized correctly.

15. Small business grants

The SBA has small business grants for exporting, STEM, technology implementation, and management assistance. Learn more about SBA grants. For a list of all government financial opportunities check out grants.gov, which has grant co-op agreements, and procurement contracts for both people and businesses.

16. Crowdfunding

A crowdfunding platform helps entrepreneurs pitch business and product ideas to individuals and if they love the idea, they can contribute small amounts for the project in exchange for being one of the first customers.If you are going to take this approach, I would suggest finding afreelancer on Upwork with a proven track record of creating great crowdfunding campaigns and making them sign a non-disclosure agreement. Make sure to check their reviews to see how many projects they have done that are similar. Also, ask for links to the crowdfunding ventures they have helped with in the past.Popular crowdfunding platforms include:

• Kickstarter
• EquityNet
• SeedUps
• SeedInvest

Those are all the mainstream ways of funding a business. Next, I'll discuss a couple of crypto ways that are pretty cool.

17. Funding a business with crypto

Cryptocurrencies have some fairly unique options that can be really beneficial for small businesses. The primary characteristics of crypto that can help businesses with funding are:

1. Use stable coins – Use USDT and USDC, to generate interest of up to14% and they are pegged to the US dollar. I personally use USDC on Crypto.com (they have cyber security insurance and store the funds offline) on a flexible term to earn 6% which comes out to $1.15 a week per thousand dollars. You can accept payments for your business through them too.
2. Decentralized Finance (DeFi) Lending – This can be highly beneficial if you have substantial resources but don't qualify for loans from traditional lenders. The way it works is that you provide crypto for the secured loan. You can spend the loan and pay it back (plus interest), then you get your crypto back.
3. NFT titles – There has been some success at converting titles of homes into Non-fungible tokens and using the NFT as a secured loan.

I suspect in the following years you will see more beneficial ways to use crypto to help fund businesses, but we are in the early stages of this technology so I want to start helping people become aware of the options.

Get your business funded

We've given you everything you need to decide which funding option works for you. You'll probably want to use a combination of them over the life of your business.If you are ready to take the next step and actually apply for funding, we have preferred lending partners that will provide small business funding for up to $5 million dollars for as little as 6% interest. Check out our lending partners today.What funding strategies would you like to learn more about?

Business ideas