Funding is a major hurdle every new entrepreneur face, not only digital marketing agency owners. Time and time again, raising money for a new company is the main reason why aspiring digital marketing agency owners don’t make the switch to becoming actual business owners. Here are a few ways to fund your new agency:
1. Get an SBA Loan
If you are in the United States, you could get a Small Business Administration (SBA) start-up line. Traditional bank loans and SBA loans are generally the most difficult and slowest way to get money for your business. To get an SBA loan for your digital marketing agency, you will generally need a high net worth real estate with equity that can be used as collateral for the loan, an airtight business plan, and a credit score above 700.
If you meet all these qualifications, congratulations! It is difficult to achieve. You’re likely a good fit for the Small Business Administration’s community advantage program and micro loan program.
2. Use Your Retirement Funds Wisely
Speak to an accountant about a rollover for business startups (ROBS), which allows you to invest funds from your retirement account into your new business without paying early withdrawal penalties or income taxes. Essentially, you are buying stock in your company with funds from your 401k and holding that stock inside your retirement account. ROBS are best for people who have at least $50.000 in their retirement account.
3. Home Equity Loans
Digital agency financing option number three is home equity loans and lines of credit. Did you know that home equity loans and lines of credit are used by 25 percent of US small businesses to fund their businesses? That’s because home equity loans and lines of credit allow you to leverage the equity in your home to borrow money for your business because the loan is backed by your home. This is generally the lowest interest rate financing option for start-ups.
4. Buy a Franchise
WSI, the world’s largest digital marketing franchise, has franchise opportunities for entrepreneurial-minded individuals who want to have their own agencies.