Guidant Financial Group Blog

Another bright side: in an economy like this, rents are more reasonable for business owners and it's easier to find high-quality employees with so many skilled individuals out of work.
If you'd like to start your own business, but are having trouble acquiring a loan, why not investigate using your retirement funds? Learn more at our Guidant Financial website.

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SBA loans are difficult to obtain in the first place. Combine this with the fact that once you do secure your SBA loan you will need to provide at least 20% cash down and it is no wonder that many prospective small business owners don’t even consider SBA loans as a viable financing option.

What many entrepreneurs do not know, however, is that the Guidant 401(k) Small Business Investment Program can be used to provide the down payment for your SBA loan from your existing IRA or 401(k) accounts, tax and penalty free.

This program is different from a loan against your 401(k) plan or a private note against the assets in your retirement plan. The Guidant 401(k) enables you to directly invest your retirement funds into your own business – as an equity partner. Just as it can buy stock in publicly traded companies, your IRA or 401(k) can invest into your privately held business (when done correctly!).

What many people don’t realize is that the cash they need to inject as the initial down payment for their SBA loan may already be in their possession. In fact, many SBA lenders and SBA sponsored programs recommend that people consider the Guidant 401(k) to secure the required cash investment to proceed with an SBA loan. This can be a much better alternative to taking a distribution and paying the early withdrawal penalties and taxes. Unfortunately thousands of people, who don’t know they have a potentially better option, take the distribution and pay upwards of 40% to the government! It’s simply not necessary.

Guidant has worked with numerous SBA approved lenders and SBA sponsored programs, like SCORE, to provide entrepreneurs with an alternative to mortgaging properties and cashing out retirement plans at a severe penalty to meet the down payment requirement.

Do you have money in a traditional IRA or 401(k)? Are you hoping to secure an SBA loan, but are unsure about where your good faith cash is going to come from? Or, are you hoping to obtain a larger SBA loan, but only have enough liquid capital to meet part of the cash requirement?

Call us. You may already have the money you need – you just don’t know how to access it yet.

Do you think you need hundreds of thousands of dollars to buy or start a business? That may not necessarily be true! There are many low-cost franchise opportunities for individuals who are interested in owning a business.

Each year, Entrepreneur Magazine releases their Franchise500 list and subsequent lists to celebrate different franchise categories. This year, they ranked the following businesses as the top low-cost franchise opportunities:

• Instant Tax Service
• Jani-King
• Jan-Pro Franchising Int'l Inc.
• Kumon Math & Reading Centers
• ServiceMaster Clean
• Merle Norman Cosmetics
• Stratus Building Solutions
• Jazzercize Inc.
• Vanguard Cleaning Systems
• RE/Max Int'l Inc.

These franchisors, although not endorsed by either Guidant Financial Group or Entrepreneur, offer a way for new small business owners, franchisees and entrepreneurs to get into business for less than $50,000. A business or franchise of this size can still be financed, fairly easily, in this market. Many people are using 401(k) small business investing or unsecured loans to acquire their business. In addition, an SBA loan can still be a viable option.

Before you invest in any business or franchise it's important that you investigate the opportunity by interviewing attorneys, consultants and existing franchisees (if applicable). In addition, make sure you work with a reputable small business financing company so that you can adequately capitalize your small business or franchise investment.

On April 27th, 2009, the Wall Street Journal reported that franchising sales have declined due to the recession. Really??? Duh!

Guidant Financial Group is a leader in small business financing. The rise in unemployment can certainly be attributed to the spike in interest we have seen in small business ownership. Yesterday, Kiplinger.com published an article called, Laid Off? Start a Business. The article does a great job identifying that there are many opportunities in small business both big and small. An SBA economist, Brian Headd, was quoted as saying, "Non-employer firms have the highest growth when the labor market struggles and the lowest growth when the labor market is doing well."

Yesterday, The Entrepreneur's Source (E-Source) announced a new strategic partnership with Guidant Financial Group. This alliance adds to E-Source Coaches' arsenal of services for the aspiring entrepreneur. With this partnership, E-Source Business Coaches will not only help individuals find the right business for their lifestyle, goals, needs and expectations, but also assist clients through the challenging aspect of financing a new venture.

We are proud that E-Source chose Guidant Financial Group as their preferred funding source. Over the past five years we have worked extremely hard to build a reputable and reliable set of services. This partnership validates those efforts. While we dominate the market for 401(k) Rollovers (investments in a business using retirement funds), Guidant also helps individuals secure financing by means of SBA loans and unsecured loans and provides equipment financing.

We look forward to helping even more entrepreneurs invest in themselves, create jobs and keep American small business moving! Learn More about Franchise Financing.

The stimulus package backed by President Obama passed the House without any Republican support last week, and it is now being debated in the Senate. Many parts of the package are controversial, and Republican leaders say that it will likely not pass in its current form. It could be a while before the President signs off on any stimulus plans.

Though we must wait for any outcome to be certain, it is never too early to examine parts of the bill and how they may stimulate businesses and the economy. One of the less controvesial initiatives is explicitly designed to do just that: an allocation of $430 million to the Small Busines Administration to revive its ailing loan programs.

According to an article last week in the Washington Business Journal, "The bill would increase the government guarantee on the SBA's 7(a) loans, and empower the agency to make loans directly to small businesses, a function that now is performed by private-sector lenders."

As credit has tightened, jobs have disappeared and fears have risen, lenders have been cutting back on ditsributing loans—even ones deemed far less risky than the toxic investments that have caused major losses in the last year. Loan activity has dropped dramatically from the beginning of the fiscal year with no sign of slowing yet. However, "The legislation would encourage lenders to start making 7(a) loans by temporarily increasing the amount guaranteed by the government from...[which] would make the loans less risky for lenders and free up capital for additional loans." President Obama also has called for the SBA to make direct loans and for lower fees on SBA loans.

Costly program fees have driven away lenders, many of whom have been forced to draw back loans across the board in the wake of the subprime mortgage crisis. To make these loans more profitable, the SBA has allowed lenders to charge higher interest rates. This could be bad news for borrowers, but the weakened economy has also lowered demand for these loans and competition will still exist between lenders for creditworthy businesses and entrepreneurs.

For those interested in obtaining SBA loans, Guidant Financial Group is an excellent place to start. Of course, many business owners are still only just learning about financing their business debt-free using their own retirement funds through 401(k) small business fianancing. Both options may be worth exploring.