Joseph Laforte: Acquiring Small Business Financing for a Startup

Joseph Laforte: Acquiring Small Business Financing for a Startup

Joseph Laforte is the director of sales at Par Funding with over two decades of small business finance industry experience, Joseph Laforte is noted as one of the small business industry’s most distinguished and accomplished leaders, PR Distribution reports. He has steered Par Funding through various market cycles and industry changes and led the sales team at Par Funding to unprecedented growth. Since 2013, Par Funding has helped than 5,000 small business achieve funding and finance solutions by assisting small and mid-size businesses to access working capital when it matters most.

In the current financial environment, business financing is often difficult for non-established businesses to obtain. Banks often shy away from lending to small businesses at all, especially those that are not already cash-flow positive. Fortunately, there are several strategies you can use to acquire funding for your small business when you need it most.

Invoice Factoring

For many small businesses, invoice factoring is one of the most effective strategies for acquiring the funding you needed. When you choose invoice factoring, you sell your current invoices—that is, the funds that you are owed by your customers—for a fee, generally a little less than you are already owed. Not only does this often help clean up your finances, since the lender will take over collecting from those customers, but it will also help you acquire capital when you need it.

Equity Partnership

In an equity partnership, you give up a large portion of your anticipated profits to an investor in exchange for startup capital. This is a highly popular option for unproven startups, who need an investor willing to buy in on their vision. Ideally, you want an investor who aligns with the vision and purposes the founders have already imagined from the company. You don’t want to fight the investors over the future of your company, so it’s important to establish how much control and decision-making ability you want to give up to the investors before you allow them to buy-in.

Small Business Financing for a Startup
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Using Your 401K

Have funds already accumulated for retirement? You can transform those accumulated funds into the funds you need to get your new business off the ground. You can tap into 401K fees to start a new business without having to pay extensive fees, as you would in the other cases of early withdrawal; however, this should be done under the counsel of an accountant and a lawyer, since they can help ensure that it is done correctly.

Using a HELOC

Do you have available equity still in your home? If so, you can transform it into the funds you need for your business. A home equity loan typically has a fixed rate, a fixed loan amount, and a fixed repayment schedule. The terms of that loan are also often more convenient for the borrower. Unfortunately, home equity loans do come with a higher level of risk: even if your business fails, you still have to repay the loan or risk losing your home.


Does your business stand out from the crowd? Think it will make a great digital pitch to investors? Crowdfunding may be the best choice for you. Try either rewards-based or equity-based crowdfunding, which both have their own unique pros and cons, to better understand how they can help you get your business off the ground. Ideally, you want your campaign to focus on innovation or product that people already know they need and can relate highly to: something that sets you apart from the crowd and generates genuine interest in what you have to offer.

Merchant Cash Advances

When you use an MCA provider, you get a cash advance based on projected future credit card sales. You pay back the loan in installments at previously-agreed intervals based on a percentage of your daily sales totals: often between 9 and 20%. The amount that goes to the MCA provider will vary from one payment to the next, based on your current sales, which makes it easier to fit into your business’s current finances. Often, MCA loans have higher interest rates, since they also come along with a higher risk for the lender. They have, however, gone from often being a loan used for cars and other smaller purchases to being a loan readily used by small business owners and founders, since many lenders are making it more difficult to get a loan.

Small Business Financing for a Startup

The funding source that works most effectively for your small business or startup will vary based on a variety of factors. How much do you believe in your business? Do you expect it to be successful, or do you worry that you may struggle? Are you comfortable with having investors buy-in on your business, or do you want to handle most of the decision-making on your own? By answering these key questions, you can choose the right funding source for your business and get the funds you need to succeed. In case you are unable to raise funds, you can always fall back on your piggy bank savings and stick to a frugal lifestyle for as long as it helps. Are you using too many credit cards? Click here to know. Are you partying every weekend or indulging in impulsive shopping? By dropping all these habits, you can save up for your venture and truly become your own boss.

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