(Newswire.net — November 14, 2016) — Getting ideas for a business is the easy part; in fact, business ideas are a dime a dozen with just a simple Google search. However, execution is the most important factor that will determine if your great idea will become a tangible entity or fizzle out like other thousands of ideas that die each day. However, you can’t put the execution of your idea to work unless you have startup capital that can be applied toward birthing the business.

Many people have great ideas that could deliver them from the drudgery of their boring 9 to 5 jobs but they are still stuck because they don’t know how to raise startup capital. Raising capital for a business should not be difficult if you know how to look in the right places. This article provides a comprehensive guide on three ways to raise capital for a business.

Rollover retirement account into start-up capital

If you don’t want to take up a conventional loan to fund your business idea, you can borrow money from your ‘future’ by doing a Rollover As Business Start Ups (ROBS) move on your retirement account. You need to have a retirement 401/IRA account to begin with and you’ll be essentially be using your retirement money to buy equity in the new business. More so, you’ll need to have at least $50,000 in the retirement account but the sweet part is that you can borrow 100% of your retirement savings to start a business.

The main upside to raising business capital through ROBS is that you don’t have to worry about repaying a loan; hence, you can concentrate all your efforts on building the business. More so, ROBS provides you with an interest-free loan and you don’t even need to worry about early withdrawal penalties or taxes.

The first downside to raising funds through ROBS is that the money you can access is limited to the sum total of money in your retirement account starting from $50,000. The second downside is that you are putting your nest egg on the line to start a new business and you could be left destitute during retirement if the business fails.

Small Business Loans

If you don’t have a qualifying retirement  account or you’d rather not stake your retirement savings on a business, small business loans might be a better alternative for raising funds for your business. If you want to start a capital intensive business, small business loans could be a one-stop shop because you can borrow up to $5 million for your business. However, you’ll need to have a credit score of at least 680, you must have raise a minimum down payment of 20% on the amount you want to borrow, and you must be ready to put up a personal or business collateral.

The main upside to raising business funds through a small business loan is that you’ll get low interest rates in relation to other forms of available loans. The interest loan could be as low as 6% APR and you can also expect a generous loan term and repayment schedule.

The main downside to raising small business loans is that you might not qualify due to the stringent minimum conditions. More so, it takes time to process a small business loan and you can typically expect to wait for 2 to 3 months before the application process is completed.

Home equity loan or line of credit

Many people are becoming more financially savvy enough to reason that a house could be an investment as well as a shelter. If you consider you house as an investment or if you have a second house, you should consider raising funds for your business by taking an home equity loan or line of credit. With a home equity loan or line of credit, you can borrow as much as 90% of the value of your house to start business. To qualify for a home equity loan, you’ll obviously need to own a home, you’ll also need to have at least 30% equity in the house. More so, you’ll need to have a credit score of at least 650.

The main upside of home equity loans or lines of credit is that you’ll get to enjoy the lowest interest rates in the market. You can reasonably expect interest low as low as 3% APR.

The main downside to using funds from a home equity loan to fund a business is that you’ll be under pressure to make the business succeed. If the business fails and your are unable to recoup your money, you could be on your way to becoming homeless.