Finance Your Business With These Eight Techniques

4. Tap into Your 401(k)

If you’re unemployed and thinking about starting your own business, the funds in your 401(k) can look pretty tempting. And thanks to new provisions in the tax code, you actually can tap into them without penalty if you follow the right steps. The steps are simple enough but legally complex, so you’ll need someone with experience setting up a C corporation as well as the appropriate retirement plan to roll your retirement assets into. Just remember that if you are considering this as an option, that you’re investing your retirement funds. That means if the business fails, not only do you lose your business, but your nest egg, too.

5. Try Crowdfunding

A crowdfunding site like Kickstarter.com and GoFundMe can be an effective way to raise money for a relatively low cost. You’ll set a goal for how the money you’d like to raise over a period of time, for example, $2,000 over 30 days. Your friends, family, and strangers then use the site to pledge money. Keep in mind, this isn’t about long-term funding. It’s supposed to facilitate the asking for and giving of support for ideas in the short-term. Usually, project-creators will offer incentives for pledging. For example, if you give a writer $20, you’ll get a book in return. There’s no long-term return on investment for supporters. Supporters don’t even have the ability to write off donations for tax purposes. Regardless, that hasn’t stopped close to 100,000 people from pledging to Kickstarter projects.