Are you considering starting a business as you enter your later years? Are you retired and looking to make a little extra money working from home? Whatever your reason may be for starting a business in your senior years, you are not alone. In fact, a 2010 AARP study found about 17 percent of baby boomers who are currently working for someone else want to be self-employed someday. This article should help you secure the financing you need.
Seek out Business Loans with the Government’s Help
Nobody wants to finance a golden ager who is looking to start a business late in life, right? This is a myth that keeps many older adults from pursuing business loans. Fortunately, the government has faith in you. Government-backed loan programs encourage lenders to take greater risks than they would otherwise because if you were to default on the loan, the government would still repay a portion of it.
Billions in lending for small businesses are supported by government loans. And, the loans tend to have lower fees. It is worth your time talking to local financial institutions about government-backed loan programs they have.
The Right Way to Borrow against Your Savings
Rather than dealing with third-party sources for money, you can get increased control and flexibility over your enterprise when you use your own retirement money. Before you make this decision, you should seek professional advice.
You might consider borrowing from your 401(k). If you go down this route, reduce personal liability by incorporating your business first. Then, use the loan to buy all of the stock in your business. Finally, roll your remaining 401(k) assets into your business’s plan. Depending on your age and situation, you might want to withdraw directly from your 401(k).
Your Senior Business Does Not Need to be Expensive
The average cost of starting a business is about $30,000. However, you do not necessarily need financing to get your organization up and running. For just $1,000, you can easily launch a home-based business. The definition of ‘home-based’ can also stretch to those based in a retirement facility. Modern technology makes it easy to run a senior business wherever you reside. A credit card could cover the cost of your startup launch. Another option is to start a home-based franchise. These companies can be as inexpensive as $2,000.
There are numerous ways to keep your costs low, including using independent contractors instead of hiring your own workers, buying surplus, and other lean business practices. Do not spend the cash if your investments are not going to help you generate revenue. And, you can always start small and grow your business later. Just make sure it is scalable.