Financing Options for Starting a Business Later in Life

A survey by Rutgers University in 2005 found that 15 percent of working people in this country expected to start their own businesses when they retired. Given the continued impact of the economic crisis on retirement accounts and Americans' growing desire to stay career-active into retirement, this statistic seems very likely to grow.

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So how do retired entrepreneurs obtain the capital they need? How much does starting a business really cost? What loans are available? Should you break into your retirement nest egg?

Here are some considerations and options for financing a post-retirement business.

Starting a business needn't cost much.

Not all businesses need lots of capital to get off the ground. Many home-based businesses, for example, can be started for about $1,000 or less, with most of that funded with a business credit card. Home-based franchises can get going for as little as $2,000. To help determine how much your business venture would cost, read "How to Estimate the Cost of Starting a Business From Scratch," a U.S. Small Business Administration Web page.

Get advice from SCORE.

A great way to start weighing your financing options is to talk to an expert business counselor from SCORE, a nationwide nonprofit association dedicated to educating entrepreneurs and helping small businesses start, grow and succeed. SCORE pairs aspiring business owners with mentors who have extensive real-world experience.

Access capital via SBA-backed small-business loans.

Have you taken a look at an SBA-backed loan? Over the past year, small-business loans backed by the SBA reached the highest volume mark in the agency's history — more than $30 billion.

Loans are available for a variety of purposes, including starting and expanding a business, exporting products or services overseas, and supporting green industries. SBA's Loans and Grants Search Tool lets you quickly find financing for which you might qualify. You can also talk to your local SBA office.

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