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A solid business plan is one of the most important documents you’ll need to create for your company. This document provides a roadmap for your company’s future developments. However, no growth can occur without a sufficient amount of working capital. That’s why your business plan should include a source of funds section – it can remind you how to maintain the cash flow your company needs.

There’s another reason this part of your business plan matters. It can show certain lenders how much money you need beyond what the funding sources in your business plan can get you. That said, not all lenders will require you to share a business plan. For example, SmartBiz’s loan approval requirements don’t include business plans among the necessary paperwork. Either way, below are some source of funds examples in business plans.

What is a business plan?

A business plan is a document that guides your company’s growth. It helps define your business goals and provides a clear overview of how you’ll achieve them. You can also use it to plot out your marketing, operational, and sales approaches. Your business plan can be the foundation of a strategy to minimize risk and maximize growth.

Another reason why solid business plans are essential is that you’ll often need to provide them as you apply for business loans. Business plans provide an in-depth look at a company’s plan for profits, so lenders can more easily judge the borrower’s likelihood of repayment. Lenders are much more likely to finance borrowers whom they believe can pay back the loan amount in a reasonable timeframe.

8 source of funds examples

Having a source of funds – sometimes several sources of funding – is vital to growing your business . Common funding options include business loans, and sometimes, to qualify for them, you must show lenders your other funding sources. Understanding the below source of funds examples in business plans can help you better structure yours.

1. Personal savings

When you’re just getting your business off the ground, sometimes, the fastest way to fund it is directly from your current savings. However, entwining your personal savings into a company that could fail is a risky prospect – but it also shows commitment. Lenders and investors often respond well to a borrower who’s ready to go the distance with their ideas.

2. Money from friends and family

Money from family and friends, which you’ll also see called “love money,” is a viable source of funds in your business plan. However, just as it’s risky to get your own money wrapped up in a business, it’s dangerous with other people’s finances too. Plus, accepting money from a loved one can come with drawbacks. For starters, not everyone in your life has much to spare in the first place. Furthermore, if you borrow money from friends or family and you can’t repay it, the relationship could be damaged.

3. Federal and private grants

Occasionally, your business model can put you in line for federal grants. That said, rare is the business that qualifies for federal grants – technically, the government does not provide grants for small businesses growth. However, private companies ranging from FedEx to the NBA offer grants to small businesses that fit certain criteria. If there’s a chance your company could fit these criteria, you can include private grants as sources of funding in your business plan.

4. Share sales and dividends

Selling shares of your company to investors – as in, anyone who buys stocks – falls under a category of funding known as equity financing. This arrangement can be lucrative, which is a main reason why you see so many companies having initial public offerings (IPOs).

However, equity financing has a few drawbacks. For one, you’ll no longer have complete control over your company's future, as stockholders dilute your ownership. Additionally, you’ll have to account for dividends in your financial planning. You pay these sums to your shareholders every quarter.

5. Venture capital

If you need a large amount of cash, venture capitalists can be a viable option. Typically, though, venture capitalists are only interested in funding startup businesses in the tech sector with high growth potential.

Venture capital is a high-reward but high-risk funding source. It often requires you ceding a certain amount of ownership – and thus control – of your business. Furthermore, if your business fails, you may still need to repay any venture capitalists or firms that have funded your operations.

6. Angel investors

An angel investor is a wealthy private individual who invests in small businesses to help them get off the ground. They tend not to offer as much starting capital as a venture capitalist, but they can make up for the smaller amount with experience. Angel investors are often experts within a specific industry and put money back into it by investing in newer businesses within that sphere.

Although you’ll have to give an angel investor some control over your company, their experience and network can help your business grow. Additionally, the word “angel” in their name reflects that they typically don’t ask for their money back if your business fails. That makes them a safer bet than venture capitalists.

7. Business incubators

Unlike the previous funding options, a business incubator doesn’t offer direct monetary support. Instead, incubators help fledgling businesses thrive by allowing them into their workspace and letting them share resources as they get started. This type of funding is indirect – you’ll rarely get direct cash infusions, but you’ll get resources that would otherwise cost you money. It’s common in high-tech industries such as biotechnology, industrial technology, and multimedia.

8. Bank loans

Bank loans probably ring a bell for you. When a current or aspiring small business owner needs additional funds, these loans are often the first thing that comes to mind. They’re among the most in-demand funding options available given their large funding amounts, long-term repayment periods, and low interest rates . However, their high amounts introduce lender risk that can make them difficult to obtain. To minimize risk, most lenders impose strict qualification criteria that you might not make.

Why do you need to provide sources of funds in your business plan?

Providing a source of funds in your business plan paves a path toward obtaining and using your funding. Knowing where your money is coming from and what you’re spending can help with strategic financial planning. It also minimizes the chances of your business partners spending money the company doesn’t actually have.

In a lending context, your sources of funds may help you qualify for any loans you need in the future. Depending on the funding sources you’re using, lenders may view you as someone able to repay the debt financing they offer. For example, using personal savings shows your commitment to your business, meaning you’re likely a reliable borrower who won’t flake on a loan. You’ll show your commitment to your company and your business at the same time.

Parting thoughts

Reliable funding sources are essential to achieving your company’s objectives, and their presence in your business plan can help you obtain more funding. Namely, certain entities that offer small business loans require business plans as part of the borrower approval process. When your approval plan clearly shows why you need the loan money and how else you’re getting funding, lenders may trust you more.

However, certain lenders don’t require business plans. In fact, when you apply for SBA 7(a) loans , bank term loans, or custom financing through SmartBiz ® , you don't need a business plan. Check now to see if you pre-qualify * – the business funding you need might be closer than you think.

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5 Common Funding Sources For Start-Ups & Growth

Written by Dave Lavinsky

If you want to be successful in business, it is crucial to determine when, where, and how to obtain the startup funding you need. Whether you need $1,000 or $1 million to start or expand your business, if you can’t raise money, you can’t build the business you want.  

Before You Look For Funding

Before you look for funding, you need to create a solid business plan. In addition to explaining your business and your strategy for success, your plan must determine how much money you need and how it will be used.

Also, it’s very important for you to understand the timing of the funding. For example, do you need all the funding now (e.g., to build out a location), or can you receive your funding in stages or “tranches.”

The amount of funding you seek will affect the source of funding you approach. For example, if you require $250,000 in funding, angel investors are more applicable than venture capitalists. If you need $5 million, the opposite is true.

Secure Funding Quickly!

The key to securing funding for your business is having the right business plan. With Growthink’s Ultimate Business Plan Template you can complete your plan in just hours and secure funding quickly!

What is The Most Common Source of Funding for Entrepreneurs?

Personal financing is the most common funding source for entrepreneurs. This includes using both your personal savings and personal credit cards to initially fund your business. Other key funding sources, as discussed below, include business loans, friends & family, angel investors and venture capitalists.

What are the Different Ways Businesses can Find Start-up Funds?

While I have identified 41 sources of funding for your business , below are the 5 most common.

1. Funding from Personal Savings

Funding from personal savings is the most common type of funding for small businesses. The two issues with this type of funding are 1) how much personal savings you have and 2) how much personal savings are you willing to risk.

In many cases, entrepreneurs and business owners prefer OPM, or “other people’s money.” The four funding sources below are all OPM sources.

2. Business Loans

Debt financing is a fancy way of saying “loan.”  Credit unions and banks offer funding that you must repay over time with interest. This can come in the form of a personal loan, a traditional business loan, or different loans based on the type of asset you need to purchase (e.g., for equipment, land, or vehicles).

You must prove to the lender that the likelihood of you paying back the bank loans is high, and meet any requirements they have (e.g., having collateral in some cases). With a bank loan, you do not need to give up equity. However, once again, you will have to pay interest along with the principal.

3. Friends & Family

A big source of funding for entrepreneurs is friends and family. They can provide funding in the form of debt (you must pay it back), equity (they get shares in your company), or even a hybrid (e.g., a royalty whereby they get paid back via a percentage of your sales).

Friends and family are a great source of funding since they generally trust you and are easier to convince than strangers. However, there is the risk of losing their money. And you must consider how your relationship with them might suffer if this happens.

4. Angel Investors

Angel investors are generally wealthy individuals like friends and family members; you just don’t know them (yet). At present, there are about 250,000 private angel investors in the United States that fund more than 30,000 small businesses each year.

Most of these angel investors are not members of angel groups. Rather they are business owners, executives and/or other successful individuals that have the means and ability to fund deals that are presented to them and which they find interesting.

Networking is a great way to find an angel investor for your business.

5. Venture Capital

Venture capital funding is a suitable option for businesses that are beyond the startup period, as well as those who need a larger amount of venture capital for expansion and increasing market share. Venture capitalists and VC firms are professional investors that are more involved with business management, and they play a significant role in setting milestones, targets, and giving advice on how to ensure greater success.

Venture capitalists invest in new businesses and medium-sized businesses they believe are likely to go public or be sold for massive future business profits. Specifically, they want to fund companies that have the ability to be valued at $100 million or more within five years. They also go through an expensive and lengthy process of deciding on the best business to invest their venture funds. Hence, the application process and approval usually takes several months.  

What Are the Three Major Sources of Funding for New Businesses?

The three major sources of funding for new businesses are personal funds, loans and credit, and venture capital. Personal funds involve using one’s own savings or assets to finance the startup. Loans and credit options are sought from banks, credit unions, or online lenders to obtain the necessary capital. For high-growth potential startups, venture capital firms and angel investors can provide funding in exchange for equity. Other funding options like crowdfunding, grants, or government assistance may also be explored based on the specific business and its needs.  

The Bottom Line

As you search for the best funding options for your start-up business or to expand your existing business, you will discover that some sources are more complicated and time-consuming while others may offer a very small amount. While the five sources mentioned above are the most common, there are other ways of obtaining the financing you need including government programs including grants , crowdfunding sites, business credit cards, or a line of credit from a bank just to name a few.

Choosing an inappropriate type of funding can lead to unfavorable outcomes such as feuds between the lender and business owner, shift of control, waste of resources and other negative consequences.

With this in mind, you should study the benefits and drawbacks of each financing option and select the ideal one that will help you meet your business goals. With the right sources of money, the sky’s the limit for your business.

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How to Finance a Business: 4 Options to Consider

• 04 Aug 2020

In entrepreneurship, the old adage “you must spend money to make money” often rings true.

Once you’ve developed an innovative business idea , identified a market need, and created a value proposition , you need to acquire funding to get your company up and running.

The key to financing a business is keeping expenses as low as possible. You also want to ensure invested money is used to gain insight into how to proceed.

In the online course Entrepreneurship Essentials , taught by Harvard Business School Professor William Sahlman, entrepreneurship is described as the process of "spending money to produce information about future possibilities."

For instance, using funds to rent a beautiful office may be tempting, but leveraging it to run tests, conduct market research, or identify more efficient means of production can help you learn about your product, pivot accordingly, and expand your company’s growth potential.

Here’s a guide for assessing startup costs and expenses, along with four business financing options to consider.

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How Difficult Is It to Fund a Startup Business?

Securing adequate funding for your business can be challenging. However, it’s important to remember that starting your own business is a large investment that should be given an appropriate period of time to succeed.

Often, new businesses need to raise funding quickly and efficiently to properly grow and thrive in their given market, but it can be difficult to adhere to various lending requirements without existing financial information. In spite of these challenges, there are various financial resources that can help you get your business off the ground.

Evaluate Startup Costs and Expenses

Before deciding how to finance your business, determine how much money you anticipate needing for startup costs and regular expenses. Whether you run a brick-and-mortar or online business, consider the following when taking stock of expenses:

• Licenses and permits
• Trademarks, copyrights, or patents for your brand and products
• Business insurance
• Legal or accounting assistance
• Rent and utilities (for brick-and-mortar businesses)
• Equipment required for production
• Website platforms
• Marketing materials (both print and digital)
• Shipping supplies
• Subscriptions to content management systems and sales or marketing platforms
• Market research

As your business scales , you may need to expand your expense list to include:

• Employee salaries
• Rent and utilities for office space
• Travel expenses
• Conferences, conventions, and networking events

These lists aren’t exhaustive—every business’s needs are different—but they provide a starting point for you to brainstorm all possible expenses for your startup. When your list is complete, calculate your total estimated startup cost. This number is the amount of funding you’ll need to invest when starting your company.

Before raising capital, it’s also wise to familiarize yourself with how to read and create a balance sheet, income statement, and statement of cash flows. Financial literacy is a critical skill for entrepreneurs , and being aware of these financial statements will ensure you’re taking the necessary steps to become a responsible business owner.

Now, how do you obtain this necessary capital? Here are four sources of funding for your business’s launch.

Related: 6 Questions to Ask Before Starting a Business

How to Finance a Business

1. self-funding.

If your projected expenses add up to a manageable amount, you may be able to fund the business yourself. This can involve taking money from your personal savings account, dipping into your retirement funds, using credit cards and paying back the debt, or asking for donations from friends and family.

Self-funding comes with the risk of long-term debt or losing personal savings and, potentially, money from loved ones. However, it’s a financing option that allows you to retain full ownership over your business, which is often seen as a downside of raising venture capital from investors.

2. Crowdfunding

If you believe your business can garner a fan base, crowdfunding could be a good option. Crowdfunding platforms, such as Kickstarter, Indiegogo, and Patreon enable entrepreneurs to pitch their products and request financial backing.

If people are intrigued and support your product, they can donate to your company in exchange for a free item, discount code, or acknowledgment once your business is up and running. For this reason, crowdfunding is typically a good fit for business-to-consumer startup companies with physical products, although there are exceptions. Each platform has its own terms and conditions, which you should read before selecting one.

Like self-funding, crowdfunding allows you to maintain full ownership of your company, as long as you’re willing to thank your donors with free or discounted products. A few brands that got their start using crowdfunding are Oculus, PopSockets, and Allbirds.

3. Taking Out a Small Business Loan

Applying for a small business loan is another way to secure necessary startup funds. Before applying to banks and credit unions, prepare a business plan, value proposition, expense report, and financial projections for the next five years. Most banks or credit unions will ask to see some combination of these documents when considering your application.

Be sure to weigh the pros and cons of every bank loan offer you receive. Which gives you the lowest interest rate? What are the terms and conditions?

As Sahlman says in Entrepreneurship Essentials , “The terms of financing have a major impact on the success or failure of a venture.”

Related: What Does It Take to Be a Successful Entrepreneur?

4. Raising Venture Capital from Investors

Another avenue for funding your business is raising venture capital from investors.

“Successful companies are always forming hypotheses and testing all aspects of their business,” Sahlman explains in Entrepreneurship Essentials . “Ventures typically need outside investors to run experiments.”

Before reaching out to investors, prepare a business plan, value proposition, financial projections, and a tight, effective pitch deck.

The process of obtaining venture capital has been likened to dating —investors typically want to get to know you and your business before they commit.

One way to start this process is by asking a mutual connection to introduce you to investors. Your contact can serve as a character reference, if needed.

This process can take a while. If you’re looking for quick, easy money to start your business, raising venture capital may not be the right choice. Investors often want to see how you run your company before deciding to invest. Even after they supply funding, they may bide their time to see what you do with the money before investing more.

“Sensible investors stage their commitment to a company—they give enough money to conduct a value-changing test,” Sahlman says. “They preserve the right to abandon the venture by refusing to invest more money. They also design contracts that give them the right to invest more if the test yields encouraging results.”

There’s one factor that sets this option apart: Investors want to own a large, valuable share of your company in return for their investment. This allows them to sell their share in the future, when they predict your company will be worth a lot of money.

In Entrepreneurship Essentials , Sahlman shares Facebook’s journey with various investors and notes that it received $500,000 from angel investor Peter Thiel in its first round of funding in 2004. Just one year later, Facebook received a $12.7 million investment from prominent venture capitalist Jim Breyer.

Resist the urge to go big right away. Perhaps raising venture capital from investors is a second or third step for the funding of your business.

What's the Best Way to Finance Your Business?

Keep in mind that no two businesses are the same—only you know the ins and outs of your company’s needs. By weighing the risks and rewards of each funding option, along with your personal finances, predicted startup costs, and business expenses, you can select the best option for financing your business.

Are you looking to learn more about financing your venture? Explore our four-week online course Entrepreneurship Essentials and our other entrepreneurship and innovation courses to learn to speak the language of the startup world. If you aren't sure which course is the right fit, download our free course flowchart to determine which best aligns with your goals.

This post was updated on June 3, 2022. It was originally published on August 4, 2020.

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Fund Your Business

Small business funding is a vital step to start or accelerate the growth of your business. Learn how to get ready for funding, review your options, master the art of pitching, and more.

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Learn the basics of funding

Do you really need funding.

Not every business needs to pursue external funding. To know for sure, you must consider why you want funding, how you’ll manage it, and what you intend to do with it.

How much funding do you need?

Lenders and investors want to know how much money you’re asking for. If you don’t have a clear number in mind—you’ll struggle to get or use any funding.

Is it hard to get funding for a business?

Securing funding can be challenging, as it depends on factors like the business's stage, financial health, and the investor's appetite for risk. A strong pitch, business plan, and network can improve your chances.

What is the best funding option for a business?

The best funding source depends on factors like the stage of your business, creditworthiness, and industry. Typically some combination of self-funding, friends and family financing, and a business loan is your best option.

What questions will investors ask?

You need to prepare for what investors will ask. If you don’t have answers to questions like ‘What problem do you solve?’ or ‘How will you make money’ then you’ll struggle to nail your pitch.

Can you get a business loan with bad credit?

It is possible to get a loan even with bad credit. However, the terms, total, and application process will likely be unfavorable. Luckily, there are things you can do to improve your chances of being approved.

Should you borrow from friends and family?

Friends and family financing is one of the most common funding methods for new businesses. To ensure there are no problems, you need to treat it like a loan or other more formal funding source.

What makes a great pitch?

A great pitch tells a real story, cuts out unnecessary details, demonstrates traction, and is backed up with facts and data.

Small business funding guides

Do you actually need additional funding to start a business? How much do you need? How do you successfully get funding? We have answers to all of these questions, plus additional tips to improve your chances of getting funding.

Funding and financing options

There is a wide variety of funding and financing methods available to small businesses. Learn what makes them unique and how to choose the best option(s) for your business.

How to create your business pitch

When seeking funds, you’ll likely have to pitch your business. Learn what you need to prepare and how to confidently pitch your business.

How to manage funding

An often overlooked part of pursuing funding is how you will track and use it after you receive it. Learn how to get the most from your additional cash and track its use for you and any external stakeholders.

Wow lenders with a professional business plan

Funding your business FAQ

What is the best source of funding for small businesses?

The best source of funding for your specific business depends on numerous factors like the stage of your business, creditworthiness, and industry. Typically some combination of self-funding, friends and family and financing, and eventually some sort of business loan is your best funding source.

How do startups get funding?

Startups and small businesses typically secure funding through loans, friends and family, angel investors, venture capital, grants, or crowdfunding. To boost your chances you need to be actively networking, craft a compelling pitch, and write a detailed business plan.

How do you get funding for an existing business?

Existing businesses can seek funding through friends and family, loans, lines of credit, investors, grants, or revenue-based financing. To better your chances, it’s crucial to demonstrate financial stability and growth potential.

What is the most common startup funding?

The most common startup funding is often personal savings, friends and family, or loans.

How can you fund a business without a loan?

Businesses can be funded without loans through bootstrapping, crowdfunding, grants, angel investors, venture capital, or investments from friends and family.

Securing funding can be challenging, as it depends on factors like the business’s stage, financial health, and the investor’s appetite for risk. A strong pitch, business plan, and network can improve your chances.

How much should I ask for when funding a startup?

Determine the amount needed by creating a detailed financial plan, considering costs, projected revenues, and growth goals. Be sure to request a realistic amount to justify the use to investors.

Can you get funding with just an idea?

While difficult, it’s possible to secure funding with just an idea, particularly if you have a strong network, industry experience, or an innovative concept. While traditional options like a business loan will require more information and traction, some early-stage investors or incubator programs may be interested.

What are examples of funding?

Examples of funding include self-funding, bank loans, lines of credit, grants, angel investments, venture capital, crowdfunding, and investments from friends and family.

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Startup Funding: What It Is and How to Get Capital for a Business

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Startup funding, or startup capital, is money that an entrepreneur uses to launch a new business. The money can be used for hiring employees, renting space, buying inventory and other operating expenses that help a business get started.

Startup capital often comes in the form of self-funding, investors or small-business loans . Knowing your financing needs and business goals will help you choose the right type of startup funding for your business.

How much do you need?

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We’ll start with a brief questionnaire to better understand the unique needs of your business.

Once we uncover your personalized matches, our team will consult you on the process moving forward.

How startup funding works

Securing startup funding can be challenging, especially if you’re hoping to go the traditional financing route. Although some banks will fund startups, the loans can be difficult to qualify for due to a startup’s limited time in business and revenue. In some cases, offering collateral to secure the funding can help in the approval process.

There are other startup funding options that exist outside of traditional lenders, such as online lenders, investors, grants and contributions of your own money.

In some cases, the type of funding you pick can affect the ownership of your startup. For example, small-business loans typically allow you to retain full ownership of your startup while getting funding from an investor may involve sharing equity and some control of your company.

» MORE: Startup business loans

Many traditional lenders aren’t an option for startup funding because they require at least two years in business. However, there are some online or alternative lenders that offer more flexibility by requiring as little as six months in operation.

Types of startup business funding

The amount of funding and how quickly you need it can help determine which funding options are best for you. Here are some specific types of startup funding to consider.

1. SBA microloan

The U.S. Small Business Administration offers several loan programs, some of which cater specifically to startups. One such program is the SBA microloan , which can provide up to $50,000 for working capital, inventory, supplies, furniture, fixtures, machinery and equipment. Generally, the lenders offering SBA microloans will require some form of collateral and a personal guarantee.

» MORE: How to get an SBA startup loan

2. Microlenders

Private and nonprofit lenders also offer microloans to startups that may not qualify for a standard business loan. These lenders tend to support minority or traditionally underserved small businesses. Microloans usually come with favorable terms, and making payments on time can help you build your credit — which, in turn, can make it easier to obtain more financing in the future.

3. Online lenders

Online lenders are normally nonbank or alternative lenders , and they can be a viable option, especially if you are looking for fast funding. Online lenders usually offer more flexibility related to time in business and credit score. They typically require less paperwork than traditional lenders and often don’t ask for collateral to secure a loan. The trade-off is that your loan may come with higher interest rates and more fees.

» MORE: Online business loan options

4. Personal business loans

Personal business loans can be a solid option for those with strong personal finances. Loan amounts may be smaller and terms may be shorter than traditional business loans, but funding can be quick, within a week of approval, in some cases. And depending on your credit score, personal loans can have lower interest rates than other financing options. Just be sure that your lender will allow the loan funds to be used for business purposes.

5. Friends and family

If more traditional lenders aren't an option, family loans may help fund your startup . While these loans may come with little or no interest obligations, they can be costly if they begin to affect your personal relationships. Putting the loan terms in writing can help set clear expectations for both parties, as well as make sure everyone understands and accepts the risks involved.

6. Self-funding

If you have enough personal savings, you may choose to self-fund, or bootstrap , your startup. This may include funding your startup with your own cash or with your retirement savings like Rollovers as Business Start-ups (ROBS) transactions. Self-funding can help you retain full control of your company, unlike with investor funding, and avoid paying interest as is the case with loans. However, a downside of self-funding is the possibility of losing your savings if your business fails.

7. Venture capital

Venture capitalists , which are primarily investment firms, tend to only offer funding to high-growth companies, because of the significant risk involved. If the startup doesn’t succeed, investors won’t see a return on their investment. In addition to the equity they’ve purchased, venture capitalists often want, at minimum, a seat on the board of directors of any company they’re financing.

» MORE: What is equity financing?

8. Angel investors

Angel investors , often wealthy individuals, want to invest in a new business because they believe it has potential. This form of startup funding doesn’t involve monthly payments; however, it will likely require you to give up partial ownership of your company. Also, some angel investors may want to take an active role in the decision-making process if they fund your business idea , while others may take a more hands-off approach.

9. Small-business grants

Startup business grants can be hard to get because competition is high. However, if you can secure a grant, you’re looking at free money for your startup. You don’t need to pay grants back or pay interest on them like you would a loan and you typically won’t need to share ownership, as is often the case with an investor. If you are a member of an underserved group, you may want to look into small-business grants for women , business grants for veteran s or grants for minority entrepreneurs .

10. Crowdfunding

Crowdfunding allows entrepreneurs to raise money for their businesses through online campaigns and social networks. To incentivize donations, gifts, rewards and free products can be offered to those who donate to your business startup campaign. Another option is equity crowdfunding , where investors receive actual equity in your business in exchange for their cash contributions.

11. Business credit cards

Financing your startup with a credit card can be an option when you haven’t been able to secure cash through other means. When used responsibly, business credit cards can provide short-term financing for key purchases and expenses. A 0% introductory APR credit card can be especially useful if you have a plan to pay off your balance before the introductory offer expires and higher interest rates are applied to your remaining balance. Also, business credit cards are often preferable over personal credit cards because they can offer higher credit limits and business-specific rewards.

Looking for a business loan?

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How to fund a startup

Though the process of securing funding for your business will vary, here are five basic steps you can take to fund your startup:

Identify how much funding you need . Calculate how much money you need before you start submitting applications or reaching out to your network. If you want to finance a large, one-time purchase, a business credit card might be the right move. Or, if you need to purchase machinery, an equipment loan may be a good option. If you’re looking for substantial capital, an investor might make more sense.

Write a business plan . Many lenders and potential investors will require a business plan . This document outlining your business model, funding needs and plan to turn a profit can help persuade others that giving you money is a smart decision.

Compile key documents . Lenders typically want to see business and personal tax returns, bank statements, profit and loss statements and other business financial documents, as well as any legal documents relating to your business such as articles of incorporation, commercial leases and contracts.

Decide which type of funding is right for you . Do your research to make sure you understand which type of funding is best for your business and then target your applications accordingly. You may also want to consider an alternative option if your first choice for funding doesn’t work out.

Make sure you can pay it back . Map out a plan for how you’re going to repay any money you borrow before you borrow it. Using a business loan calculator or credit card payoff calculator can help you estimate your payments and ensure the repayment amounts fit into your monthly budget.

Startups can get funding in different ways, including business loans, personal savings, friends and family, venture capital and startup grants.

The best type of startup funding depends largely on the type of business, funding amount and the business owner’s general financial situation. If you don’t have the option to fund your business personally or through family and can’t qualify for a traditional bank loan, an online lender can be a quick alternative.

This will depend on your type of business. A restaurant, for example, is an inventory-heavy business that requires equipment and property or rental space to operate. The startup costs for a small restaurant can range anywhere from $175,000 to over $750,000. Conversely, an online consulting business could start operating from a business owner’s home for the cost of a website, a phone and a computer.

On a similar note...

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1. Retained Earnings

2. debt capital, 3. equity capital.

• Funding Sources FAQs

The Bottom Line

• Corporate Finance
• Corporate Finance Basics

What Are the Sources of Funding Available for Companies?

Corporations often need to raise external funding or capital in order to expand their businesses into new markets or locations. It also allows them to invest in research & development (R&D) or to fend off the competition. And, while companies do aim to use the profits from ongoing business operations to fund such projects, it is often more favorable to seek external lenders or investors to do so.

Despite all the differences among the thousands of companies in the world across various industry sectors , there are only a few sources of funds available to all firms. Some of the best places to look for funding are retained earnings, debt capital, and equity capital. In this article, we examine each of these sources of capital and what they mean for corporations.

Key Takeaways

• Companies need to raise capital in order to invest in new projects and grow.
• Retained earnings, debt capital, and equity capital are three ways companies can raise capital.
• Using retained earnings means companies don't owe anything but shareholders may expect an increase in profits.
• Companies raise debt capital by borrowing from lenders and by issuing corporate debt in the form of bonds.
• Equity capital, which comes from external investors, costs nothing but has no tax benefits.

Companies generally exist to earn a profit by selling a product or service for more than it costs to produce. This is the most basic source of funds for any company and, hopefully, the primary method that brings in money to the firm. The net income left over after expenses and obligations is known as retained earnings (RE).

Retained earnings are important because they are kept by the company rather than being paid out to shareholders as dividends. Retained earnings increase when companies earn more, which allows them to tap into a higher pool of capital. When companies pay more to shareholders, retained earnings drop.

These funds can be used to invest in projects and grow the business. Retained earnings provide several advantages for businesses. Here's why:

• Using retained earnings means companies don't owe anyone anything.
• They are an inexpensive form of financing . The cost of capital of using retained earnings is what's called the opportunity cost. This is what companies make shareholders give up by not getting dividends. And corporations save on using retained earnings compared to issuing bonds because they aren't obligated to pay interest to bondholders.
• Corporate management can decide to use all or part of the company's earnings to pass on to shareholders. The leadership team can then decide how to use whatever funds to be reinvested back into the company.
• They do not dilute ownership.

But there are cons to using retained earnings to fund projects and fuel corporate growth. For instance:

• Shareholders can lose value even with retained earnings that are reinvested back into the company. That's because there's a chance they won't result in higher profits.
• There is also the argument that using retained earnings is not cost-effective because they don't actually belong to the company. Instead, they belong to shareholders.

Don't owe anyone anything

Inexpensive form of financing

Flexibility to use retained earnings as management desires

Do not dilute ownership

Loss of value for shareholders

Earnings actually belong to shareholders

Companies can borrow money just like individuals—and they do. Using borrowed capital to fund projects and fuel growth isn't uncommon. There are several instances when debt capital comes in handy. for short-term needs. And businesses that are deemed high-growth need a lot of capital and they need it fast. Borrowing money can be done privately through traditional loans through a bank or other lender, or publicly through a debt issue .

Debt capital comes in the form of traditional loans and debt issues. Debt issues are known as corporate bonds . They allow a wide number of investors to become lenders or creditors to the company. Just like consumers, companies can reach out to banks, other financial institutions , and other lenders to access the capital they need. This gives them a leg up because:

• Borrowing money allows a tax deduction on any interest payments made to banks and other lenders.
• Interest costs tend to be less expensive than other sources of capital.
• It can help boost corporate credit scores , which is especially beneficial for new companies.
• Because the funds are borrowed, there is no need to share profits with investors.

But there are downfalls to using debt capital. For instance:

• The main consideration for borrowing money is that the principal and interest must be paid to the lenders or bondholders. This may be problematic when profits are scarce.
• A failure to pay interest or repay the principal can result in default or bankruptcy.

Interest on financing is tax deductible

Interest costs less than other sources of capital

Helps boost credit score

Profit-sharing isn't necessary

Companies are obligated to repay lenders

Failure to repay can result in default or bankruptcy

It may be harder for smaller or troubled businesses to get debt financing when the economy is going through a slowdown.

A company can raise capital by selling off ownership stakes in the form of shares to investors who become stockholders. This is known as equity funding . Private corporations can raise capital by offering equity stakes to family and friends or by going public through an initial public offering (IPO). Public companies can make secondary offerings if they need to raise more capital.

The benefit of this method is:

• There's nothing to repay. That's because this type of financing relies on investors—not creditors .
• It allows companies with poor credit histories to raise money.

Disadvantages of equity capital include:

• Dilution . Equity shareholders also have voting rights , which means that a company forfeits or dilutes some of its control as it sells off more shares. This includes small businesses and startups that bring in venture capitalists to help fund their companies.
• Costs. Equity capital tends to be among the most expensive forms of capital as investors may expect a share in profit.
• There are no tax benefits like the ones offered by debt financing.
• Internal headaches. Bringing in outside financing can lead to increased tension as investors may not agree with management's views of where the company is heading.

No repayment

Don't need a good credit history

Dilution in ownership

Investors expect share of profits

No tax benefits

Possibility of tension between investors and management

How Can Businesses Raise Money From Internal Sources?

One of the main ways that companies can raise money internally is through retained earnings. This is the simplest and easiest way to do so. Retained earnings is a generalized term that refers to any net income that remains after any expenses and obligations are paid off.

What Are the Three Major Sources of Financing?

The three major sources of corporate financing are retained earnings, debt capital, and equity capital. Retained earnings refer to any net income remaining after a company pays off any expenses and obligations. Debt capital is funding that a company raises by borrowing money from lenders through loans or corporate bond offerings. Equity capital is cash that a public company raises or earns by issuing new shares to shareholders on the market. This could be done by selling common or preferred stock.

Is Debt Financing or Equity Financing Better?

Both debt and equity financing can be risky. Debt financing obligates companies to repay creditors. Failure to repay can result in default or bankruptcy. This can affect corporate credit scores. While companies aren't obligated to repay any debts with it, there are no tax benefits associated with equity financing. There's also a risk of dilution of ownership since it involves adding more shareholders to the mix. Investors (new and old) may also expect a share of corporate profits.

In an ideal world, a company would simply obtain all of the money it needed to grow simply by selling goods and services for a profit. But, as the old saying goes, "you have to spend money to make money," and just about every company has to raise funds at some point to develop products and expand into new markets.

When evaluating companies, look at the balance of the major sources of funding. For example, too much debt can get a company into trouble. On the other hand, a company might be missing growth prospects if it doesn't use money it can borrow. Financial analysts and investors often compute the weighted average cost of capital (WACC) to figure out how much a company is paying on its combined sources of financing.

Internal Revenue Service. " Publication 535 (2021), Business Expenses ."

U.S. Securities and Exchange Commission. " Going Public ."

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How to Create a Sources and Uses of Funds Statement

• The Sources & Uses of Funds Statement
• Steps in Creating the Statement
• Sample Statement

You might have seen the term "Sources and Uses of Funds Statement" on a list of financial spreadsheets needed for a bank loan and you wondered what it is. This statement is sometimes called a source and application of funds statement. Some banks require this statement as part of the application process for a business loan . 

Large public companies include a Sources and Uses of Funds statement in their annual reports, but even small businesses can find sources and uses statement helpful. The worksheet discussed here is a simplified, slightly different version that you can use to show a lender how much you need for startup financing and how much collateral you will contribute.

Lenders like the Sources and Uses statement because it is an excellent summary of your financial plans, showing where the money you need is coming from and what it will be used for. 

Even if you don't need a Sources and Uses of Funds Statement for a lender, consider putting one together. It's an excellent way to strategize on creative ways to finance your business startup or expansion. 

The Sources and Uses of Funds Statement

As you can tell from its title, a Sources, and Uses of Funds statement shows the reader the information needed to get the big picture of: 

Uses of Funds: The money needed for various purposes for business startup, including

• Beginning quantities of supplies, equipment, and furniture
• Purchase of building and land
• Initial startup costs for rent deposits for rent, initial payments for insurance, etc.
• Other working capital needs

If your business is considering expansion, the "uses" part of the statement would show the build-out or improvements you will need, and additional capital assets you will need to buy. 

Sources of Funds: Where the money for all funding is going to come from. A traditional statement might include sources like:

• Sales of assets
• Owner contributions
• Sales of stock
• Cash income  

You will probably have a mix of different funds for different parts of your plan. For example, you may be contributing office furniture yourself, getting a loan for purchasing major equipment, and getting aline of credit for working capital. 

The difference between the uses of the funds and the sources is what you are asking a lender to provide.

Steps in Creating a Sources and Uses of Funds Statement

The format of the Sources and Uses document seems backward: First, the uses of funds are described, then the sources, as if you were talking to a lender about your plans. 

Uses of Funds

Section One is "Uses of Funds." ​The total of startup funds and working capital needs is the total Uses of Funds.

In this section, use the subtotals for each section in your Startup Costs Worksheet : Facilities, Equipment and Vehicles, Supplies and Advertising, and Other Startup Costs. Total these numbers

In the Uses of Funds section, include an estimate of

Capital needed, for investments in buildings, equipment, or vehicles

Working Capitalneeds, the amount of money you need to have on hand to pay bills while you are establishing your business.

When you create a uses statement, think about what your company needs to create a "profitable and sustainable" business or project. It doesn't matter how the items would be paid for, just that they are needed.  

Sources of Funds

In the Sources of Funds section, list all the sources of funds you have for startup. It might include

• Income from shareholders who are investing in your business
• Collateral for the loan you are seeking or from a co-signer
• Other personal sources like equity in your home, a savings account, or an IRA (you don't have to cash it in, just be willing to let the bank take it if you can't pay on your loan).

It's a good idea to include a detailed sheet to explain the specifics of contributions.

Sample Sources and Uses of Funds Statement

This statement does not have to be complicated; it is just meant to show a lender how much you need for financing, what you have as collateral and the amount of loan you need. In some cases, you may not actually be putting the money into the business (if you have an IRA, for example); you are just showing the bank what you can do if you are in trouble on the loan.

The Uses section is always shown first, then Sources of Funds. The difference between the total Uses of Funds from section one and the total collateral you are providing equals the amount of financing needed. The Sources total must match the Uses total.

Here's a sample Sources and Uses of Funds Statement for a project that involves buying and renovating a building.

Creating Your Sources and Uses of Funds Statement

As you work on putting together this statement, you might want to be creative to find more funding sources. For example, you could do a crowdsourcing campaign (like Kickstarter) for a new product, or find an SBA loan  guarantee to help you secure that loan. 

Don't forget to include the costs of obtaining these funding sources in your uses of funds section. 

Be as accurate and complete as you can be when preparing your Uses of Funds section. Leave no question unanswered. Lenders don't like surprises. 

Purdue Center for Commercial Agriculture. " Sources and Uses of Funds Statement ." Accessed Jan. 7, 2021.

OPIC.gov. " Attachment1: Creating a Sources and Uses Statement ." (Download.) Accessed Jan. 7, 2021.

OPIC.gov. " Attachment1: Creating a Sources and Uses Statement ." (Download.) Accessed Jan 7, 2021.

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Key Considerations of the Sources and Uses of Funds Statements

Free Startup Fundraising Checklist

Rudri Mehta

• January 2, 2024

A flow of funds statement is a document created to examine the factors that led to changes in a company’s financial position between two balance sheets . It displays the movement of money in and out, i.e. funding sources and applications for a specific period.

In other words, the source and uses of funds statement explain where a company’s money came from and how the organization has put it to use in the past and how they will use the funds in the future. It is also one of the business plan elements.

It contains the cash inflows into the company, the cash received, the cash outflows from the company, or the money spent.

So, what purpose does it serve?

Mostly, lenders will ask for these statements when you apply for a  business loan . It will also help investors understand where the funds have been used.

If sources and uses of funds statement are accurately prepared, it can communicate well with the readers, and hence, it is quite crucial to prepare compelling sources and uses of funds statement.

This article explains the sources and uses of funds statements and the step in creating the statements with examples.

Table of Contents

What is the Sources and Uses of the Funds Statement?

Steps to create the sources and uses of funds statement, sample sources and uses of funds statement.

A company’s sources and uses of funds is a statement that provides information on how much did the company raise the money and how they were applied to achieve the company’s goals.

The sources and use of funds statements reflect the impact of changes in the balance sheet contents on the organization’s cash-in-hand. These are the statements that also guide organizations in their short-term planning decisions that involve available funds.

These statements are widely used for

• For business loan purposes,
• Attracting investors, and
• Predicting the impact of changes in the balance sheet

The Sources and Uses of Funds have two parts,

• The first part is the sources from which the company gets its funds, and
• The second part is the uses, applications, or spending of the money

Let’s understand both sections of the statement in detail.

Uses of Funds

It generally consists of the following components:

1. Money Required for Operational Activities

Organizations will need cash and working capital to run the business and perform day-to-day activities.

2. Opening Quantities of Supplies, Equipment, and Furniture

The opening balance of the supplies, equipment, and furniture tells us where the organization has already spent its money.

3. Purchase of Land and Building

The amount spent on acquiring land and building for business use is a huge  capital expense  and results in cash outflow.

4. Initial Startup Costs

These costs include rent, deposits paid for the rented building/apartment, machinery acquisition costs, initial payments for insurance, company setup costs, etc.

5. Other Working Capital Needs

These include other operating costs such as the rental expenses of the leased machinery, repairs and maintenance expenses, outsourcing costs, etc.

Sources of Funds

Hence, the sources of funds also include the money your investors have given to you.

Below are the other elements of the sources of funds for most businesses.

1. Owner Contributions

Owners of the businesses bring specific amounts of capital to start the company and they also contribute more capital as and when needed from time to time.

2. Sales of Stock

It includes the sale of  finished goods  and any other inventory that will not be used by the company.

3. Sales of Assets

The assets that the companies sell due to the discontinuance of some of the operations or assets becoming non-operatable are another source of funds.

4. Cash Income

Any other cash income generated from the sale is also considered one of the sources of funds.

Funds statement’s uses

The following are prominent uses of funds:

• Adjusting operating net loss
• Purchase of non-current assets
• Repayment of either long-term or short-term debt , such as bank loans (debentures or bonds)
• Redeemable preference share redemption
• Payment of dividends in cash

One of the essential tasks of an organization in preparing the financial statements  of the company would be to prepare the sources and uses of funds statement.

It is because the statement reflects the efficiency of the business in depicting how effectively funds were utilized from the available sources. Even if you want to fund, then you will need these fund statements in your business plan. If you are not aware of that, then worry not, visit our business plan app .

The uses of funds section are prepared first, and then the sources of funds.

Let’s learn how to prepare the uses of funds section of the sources and uses of the fund’s statement.

Steps to Create Uses of Funds

• Note down all the costs included in the uses of funds, such as plant and machinery, initial startup costs, suppliers and marketing expenses, and other working capital costs.
• Add all the numbers and make a total to name ‘total of startup costs’ as shown in the example below.
• The capital costs required for purchasing the buildings, machinery, and vehicles and
• The working capital requirements to fund day-to-day operations.

While generating the uses of funds statement, focus on all the needs for the smooth and profitable functioning of the business rather than on the sources of funds.

Steps to Create Sources of Funds

• This section lists all the sources of funds, depicting where the money has come to fund the business.
• List the contributions received from the owners and the investors.
• Write the security that you offer for the loan you wish to secure.
• Any other sources of funds that you can use to fund the business in case you cannot pay the loan?
• It is also advisable to include all details concerning the contribution particulars.

While preparing the statement for sources and uses of funds, please note it has to be simple, and easy to understand. If you complicate the statement by adding difficult terms or complex numbers, readers may misinterpret the statement, and you may lose a potential investor or a bank loan.

Statement of Sources and Uses of Funds:

The Bottom Line

As you  grow your business , you may need more funds to meet the business expansion costs, and hence, it is important not only the startup companies but the well-established businesses as well to craft a compelling statement of sources and uses of funds.

How Can We Help?

We can help you prepare the statement of sources and uses of funds faster and more accurately along with other reports such as  financial statements , and ratio analysis  to help you better understand the financial position of your company.

Request your free demo at  Upmetrics  ~ a business plan app to input only the minimum elements so that we can compute it for you.

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Frequently Asked Questions

What are the factors to be considered in choosing the source of funds.

• Tax benefits
• Flexibility & ease
• Purpose & time period

What are the 2 most important sources of funds?

• Equity shares
• Retained earnings

What is the importance of the sources and uses in the fund flow statement?

An organization’s working capital movements are described in a flow of funds statement. It takes into account the inflows and outflows of money (the sources and uses of money) throughout a specific period. The statement aids in analyzing how the financial situation of a company has changed across two balance sheet periods.

What are the uses of the funds flow statement?

Thus, the funds flow statement help in locating liquidity blockages and in formulating an efficient dividend policy. This declaration also acts as a company’s financial road map. It highlights the monetary difficulties that an organization can have soon.

About the Author

Rudri is a passionate financial content writer and a Chartered Accountant by profession. She enjoys sharing knowledge through her writing skills in finance, investments, banking, and taxation while also exploring graphic designing for her own content.

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Yahoo Finance

Principal real estate income fund announces notification of sources of distribution.

DENVER , April 30, 2024 /PRNewswire/ -- The Principal Real Estate Income Fund (NYSE: PGZ) announces the sources of a distribution paid on April 30, 2024 of $0.1050 per share to shareholders of record at the close of business on April 16, 2024 , pursuant to the Fund's managed distribution plan. This press release is issued as required by an exemptive order granted to the Fund by the U.S. Securities and Exchange Commission and includes the notice below sent to shareholders regarding the source of the distribution.

Statement Pursuant to Section 19(a) of the Investment Company Act of 1940

The following table sets forth the estimated amount of the sources of distribution for purposes of Section 19 of the Investment Company Act of 1940, as amended, and the related rules adopted thereunder. In accordance with generally accepted accounting principles ("GAAP"), the Fund estimates the following percentages, of the total distribution amount per share, attributable to (i) current and prior fiscal year net investment income, (ii) net realized short-term capital gain, (iii) net realized long-term capital gain and (iv) return of capital or other capital source as a percentage of the total distribution amount. These percentages are disclosed for the current distribution as well as the fiscal year-to-date cumulative distribution amount per share for the Fund.

The Fund estimates that it has distributed more than its income; therefore, a portion of your distribution may be a return of capital. A return of capital may occur, for example, when some or all of the money that you invested in the Fund is paid back to you. A return of capital distribution does not necessarily reflect the Fund's investment performance and should not be confused with 'yield' or 'income'.

The timing and character of distributions for federal income tax purposes are determined in accordance with income tax regulations, which may differ from GAAP. As such, all or a portion of this distribution may be reportable as taxable income on your 2024 federal income tax return. The final tax character of any distribution declared in 2024 will be determined in January 2025 and reported to you on IRS Form 1099-DIV.

The amounts and sources of distributions reported in this 19(a) Notice are only estimates and not for tax reporting purposes. The actual amounts and sources of the amounts for tax reporting purposes will depend upon the Fund's investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations. The Fund will send you a Form 1099-DIV for the calendar year that will tell you how to report these distributions for federal income tax purposes.

Presented below are return figures, based on the change in the Fund's Net Asset Value per share ("NAV"), compared to the annualized distribution rate for this current distribution as a percentage of the NAV on the last day of the month prior to distribution record date.

While the NAV performance may be indicative of the Fund's investment performance, it does not measure the value of a shareholder's investment in the Fund. The value of a shareholder's investment in the Fund is determined by the Fund's market price, which is based on the supply and demand for the Fund's shares in the open market. Past performance does not guarantee future results. Shareholders should not draw any conclusions about the Fund's investment performance from the amount of this distribution or from the terms of the Fund's Managed Distribution Plan.

Furthermore, the Board of Trustees reviews the amount of any potential distribution and the income, capital gain or capital available. The Board of Trustees will continue to monitor the Fund's distribution level, taking into consideration the Fund's net asset value and the financial market environment. The Fund's distribution policy is subject to modification by the Board of Trustees at any time. The distribution rate should not be considered the dividend yield or total return on an investment in the Fund.

Please retain this document for your records.

ALPS Advisors, Inc. is the investment adviser to the Fund.

Principal Real Estate Investors LLC is the investment sub-adviser to the Fund. Principal Real Estate Investors LLC is not affiliated with ALPS Advisors, Inc. or any of its affiliates.

ALPS Portfolio Solutions Distributor, Inc. is the FINRA Member.

*  Registered Representative of ALPS Distributors, Inc.

PRE000413  4/30/2025

View original content: https://www.prnewswire.com/news-releases/principal-real-estate-income-fund-announces-notification-of-sources-of-distribution-302132104.html

SOURCE Principal Real Estate Income Fund

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Biden-Harris Administration Announces $7 Billion Solar for All Grants to Deliver Residential Solar, Saving Low-Income Americans $350 Million Annually and Advancing Environmental Justice Across America

EPA announces 60 selectees under Greenhouse Gas Reduction Fund grant competition to deliver solar to more than 900,000 low-income and disadvantaged households nationwide through the President’s Investing in America agenda

April 22, 2024

Contact: EPA Press Office ( [email protected] )

Washington – Today, April 22, as the Biden-Harris Administration celebrates Earth Day, the U.S. Environmental Protection Agency announced 60 selectees that will receive $7 billion in grant awards through the Solar for All grant competition to deliver residential solar projects to over 900,000 households nationwide. The grant competition is funded by President Biden’s Investing in America agenda through the Inflation Reduction Act, which created EPA’s $27 billion Greenhouse Gas Reduction Fund. The 60 selections under the $7 billion Solar for All program will provide funds to states, territories, Tribal governments, municipalities, and nonprofits across the country to develop long-lasting solar programs that enable low-income and disadvantaged communities to deploy and benefit from distributed residential solar, lowering energy costs for families, creating good-quality jobs in communities that have been left behind, advancing environmental justice and tackling climate change.

“Today we’re delivering on President Biden’s promise that no community is left behind by investing $7 billion in solar energy projects for over 900,000 households in low-income and disadvantaged communities,” said EPA Administrator Michael S. Regan. “The selectees will advance solar energy initiatives across the country, creating hundreds of thousands of good-paying jobs, saving $8 billion in energy costs for families, delivering cleaner air, and combating climate change.” 

“Solar is the cheapest form of electricity—and one of the best ways to lower energy costs for American families,” said John Podesta, Senior Advisor to the President for International Climate Policy. “Today’s announcement of EPA’s Solar for All awards will mean that low-income communities, and not just well-off communities, will feel the cost-saving benefits of solar thanks to this investment.”

“Residential solar electricity leads to reduced monthly utility bills, reduced levels of air pollution in neighborhoods, and ultimately healthier communities, but too often low-income and disadvantaged communities have been left out. Today’s announcement will invest billions to ensure that affordable housing across the U.S. can access solar and increase energy efficiency and climate resilience,” said U.S. Department of Housing and Urban Development (HUD) Acting Secretary Adrianne Todman. “HUD is honored to have played a key role in today’s monumental announcement, which will provide meaningful household savings to households in low-income and disadvantaged communities, reduce both greenhouse gas emissions and energy costs, and deliver electricity during grid outages for low-income households.”

“Sunlight is powering millions of homes across the nation, and we're working hard to ensure Americans everywhere can benefit from this affordable clean energy resource,” said U.S. Secretary of Energy Jennifer M. Granholm. “DOE is proud to work alongside our partners at EPA and across the Federal government to help communities access the limitless energy of the sun to light their homes and power their businesses.”

“The United States can and must lead the world in transforming our energy systems away from fossil fuels,” said U.S. Senator Bernie Sanders (VT). “The Solar for All program – legislation that I successfully introduced – will not only combat the existential threat of climate change by making solar energy available to working class families, it will also substantially lower the electric bills of Americans and create thousands of good-paying jobs. This is a win for the environment, a win for consumers, and a win for the economy.”

EPA estimates that the 60 Solar for All recipients will enable over 900,000 households in low-income and disadvantaged communities to deploy and benefit from distributed solar energy. This $7 billion investment will generate over $350 million in annual savings on electric bills for overburdened households. The program will reduce 30 million metric tons of carbon dioxide equivalent emissions cumulatively, from over four gigawatts of solar energy capacity unlocked for low-income communities over five years. Solar and distributed energy resources help improve electric grid reliability and climate resilience, which is especially important in disadvantaged communities that have long been underserved.

Solar for All will deliver on the Biden-Harris Administration’s commitment to creating high-quality jobs with the free and fair choice to join a union for workers across the United States. This $7 billion investment in clean energy will generate an estimated 200,000 jobs across the country. All selected applicants intend to invest in local, clean energy workforce development programs to expand equitable pathways into family-sustaining jobs for the communities they are designed to serve. At least 35% of selected applicants have already engaged local or national unions, demonstrating how these programs will contribute to the foundation of a clean energy economy built on strong labor standards and inclusive economic opportunity for all American communities.

The Solar for All program also advances President Biden’s Justice40 Initiative , which set the goal that 40% of the overall benefits of certain federal climate, clean energy, affordable and sustainable housing, and other investments flow to disadvantaged communities that are marginalized by underinvestment and overburdened by pollution. All of the funds awarded through the Solar for All program will be invested in low-income and disadvantaged communities. The program will also help meet the President’s goal of achieving a carbon pollution-free power sector by 2035 and net-zero emissions economy by no later than 2050.

Solar for All will expand existing low-income solar programs and launch new ones. The 60 selected applicants will serve households in all 50 states, the District of Columbia, Puerto Rico, and territories, as well as increase access to solar for Tribes. EPA has selected 49 state-level awards totaling approximately $5.5 billion, six awards to serve Tribes totaling over $500 million, and five multistate awards totaling approximately $1 billion. Solar for All will deploy residential solar for households nationwide by not only providing grants and low-cost financing to overcome financial barriers to deployment but also by providing services to communities to overcome other barriers such as siting, permitting, and interconnection. A complete list of the selected applicants can be found on EPA’s Greenhouse Gas Reduction Fund Solar for All website.

The 60 selected applicants have committed to delivering on the three objectives of the Greenhouse Gas Reduction Fund: reducing climate and air pollution; delivering benefits to low-income and disadvantaged communities; and mobilizing financing to spur additional deployment of affordable solar energy. Solar for All selected applicants are expanding existing low-income solar programs and launching new programs. In at least 25 states and territories nationwide, Solar for All is launching new programs where there has never been a substantial low-income solar program before. In these geographies, Solar for All selected applicants will open new markets for distributed solar by funding new programs that provide grants and low-cost financing for low-income, residential solar.

To date, many of the 60 selected Solar for All applicants have supported low-income and underserved communities in installing innovative residential solar projects. With this new funding, selectees can launch thousands more projects like these throughout every state and territory in the nation:

• The threat of storms is a major reason Athens, Georgia resident Delmira Jennings and her husband John used selected applicant Capital Good Fund's Georgia BRIGHT leasing program to install a 13-kilowatt solar and 10-kilowatt-hour battery system in February. “Last year, we spent two days without power after what seemed like a mini tornado,” Jennings said. After a recent outage, Jennings noted that she didn't even know she lost power. “The batteries kicked in and all the power items we were using were on battery backup.”
• Last year, the Northern Cheyenne Tribe, whose successful pilot initiative served as the basis for selected applicant Mandan, Hidatsa, Arikara (MHA) Nation’s Northern Plains Tribal Solar for All program, took major steps toward a clean energy future with the completion of the first phase of the White River Community Solar project. This project will deploy 15 solar systems at the homes of elders while piloting a groundbreaking approach to solar ownership and management that is intended to set an example for Tribes across the nation.
• Through its existing Solar on Multifamily Affordable Housing (SOMAH) program — a model for equitably providing solar to low-income renters in disadvantaged communities — selected applicant GRID Alternatives’ team in San Diego installed a solar energy system at Trolley Trestle, home to youth transitioning out of the foster care system. Energy cost savings estimated at over $600k over ten years, will be reinvested to provide additional services to those who call Trolley Trestle home, including more job and life skills training.

Review and Selection Process Information

The 60 applicants selected for funding were chosen through a competition review process. This multi-stage process included review from hundreds of experts in climate, power markets, environmental justice, labor, and consumer protection from EPA, Department of Energy, the Department of Housing and Urban Development, Department of Treasury, Department of Agriculture, the Federal Emergency Management Agency, Department of Labor, Department of Defense, Consumer Financial Protection Bureau, and the Department of Energy’s National Labs – all screened through ethics and conflict of interest checks and trained on the program requirements and evaluation criteria. Applications were scored and selected through dozens of review panels and an interagency senior review team.

EPA anticipates that awards to the selected applicants will be finalized in the summer of 2024, and selected applicants will begin funding projects through existing programs and begin expansive community outreach programs to launch new programs in the fall and winter of this year. Selections are contingent on the resolution of all administrative disputes related to the competitions.

Informational Webinars

EPA will host informational webinars as part of the program’s commitment to public transparency. EPA has scheduled a public webinar for the Solar for All program, and registration details are included below. Information on other GGRF webinars can be found on EPA’s Greenhouse Gas Reduction Fund Engagement Opportunities webpage .

• Solar for All webinar: Monday, April 29, 2024, 4:00pm – 4:30pm ET. Register for the April 29 meeting

Release updated to reflect minor changes. 

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$22 million in public, private funds will build new Africa Center in Southwest Philly, developer says

The plan includes offices, stores, and a restaurant. Next door will be a community center, school, and medical clinic.

Federal, state, and city taxpayers, banks, and nonprofits have committed the $22 million needed to build Africa Center, the long-sought social services and retail hub planned by ACANA , the African Cultural Alliance of North America , led by members of West African immigrant communities in Southwest Philadelphia and nearby neighborhoods.

Voffee Jabateh, founder and executive director of ACANA, said in a statement that he hoped the 37,000-square-foot Africa Center would also anchor a larger redevelopment project he calls Dolakeh Square , meaning “people rising together” in the Mano language used in parts of Liberia and neighboring Sierra Leone. He said he envisioned an African-immigrant version of Philadelphia’s Chinatown retail and government-assisted housing district.

On the site of a former dry cleaner and neighboring properties at 5432-36 Chester Ave., ACANA plans offices, stores, and a second location for Youma Ba’s Kilimanjaro Senegalese restaurant and catering, according to Ahsan Nasratullah, the project developer.

Next door at 1511-17 S. 55th St. plans call for a community center on the first floor, a branch of the Woodland Academy on the second and third floors, and a clinic on the fourth floor, to be run by Helena Kwakwa, a Ghana native who runs two n onprofit Newlands Health clinics in Northeast Philly and works as HIV medical director for the city’s outpatient health centers.

The project includes renovation and new construction — and a series of land and financing deals put together with help from the Philadelphia Industrial Development Corp ., the city’s public-private economic development entity focused on finding and financing projects for vacant commercial properties.

The funding arrangement is “a complex financial transaction” designed to attract jobs and investments through a “cultural, economic, and social community epicenter,” said Lawrence McComie, chief credit officer and senior vice president at PIDC.

Nasratullah credited City Councilmember Jamie Gauthier with connecting him to Im Kwang, a Korean immigrant who formerly operated the dry cleaner. Kwang agreed to sell the property for $300,000, which Nasratullah said was less than market value, in a deal conducted entirely through text messages. PIDC helped ACANA acquire the 55th St. property at a nominal price through the city Land Bank.

ACANA’s current headquarters and the programs it supports are housed in a three-story building at 5532 Chester and attached two-story buildings at 5534-36 Chester.

PIDC officials, ACANA leaders, and Africa Center supporters say they hope the project will draw more construction and investors to the aging neighborhood business district at a time when some business-minded immigrants and their children have relocated to nearby Delaware County and other suburban areas.

About one-quarter of Southwest Philly residents were born outside the United States, compared to one in seven Philadelphians and one in 11 across the metro region, according to the 2020 U.S. Census. The neighborhood’s median income is below the city average, though it is located between University City and the Philadelphia International Airport district, both of which are attracting substantial development.

Instrumental in the fundraising were JNA Capital, an investment company cofounded by developer Nasratullah and his wife, first-term City Councilmember Nina Ahmad; and Fattah Capital Advisors , a consulting firm founded by former U.S. Rep. Chaka Fattah , according to ACANA.

A list of Africa Center funders provided by Nasratullah and confirmed by city officials includes:

$9 million in state matching funds awarded by the state Redevelopment Assistance Capital Program, which subsidizes private and public construction projects across Pennsylvania.

$4.5 million in equity investment by Capital One N.A., the Virginia-based credit card giant, financed by federal New Markets Tax Credits arranged through PIDC and the Lancaster-based Community First Fund and its Finanta unit.

$3 million from the Philadelphia Commerce Department, mostly from the federal Community Development Block Grants program.

$2.4 million from Nasratullah’s Global City Regional Center LLC , which raises money from wealthy immigrants under the federal EB-5 dollars-for-visas program. Nasratullah’s company also raised $8.8 million for the $75 million Crane apartment tower in Chinatown, which ACANA leaders see as a model for the Africa Center development.

$2 million in federal Community Project Funding dollars, with help from U.S. Rep. Mary Gay Scanlon, a Democrat who represents portions of Philadelphia and its suburbs.

$1.5 million lent by United Bank of Philadelphia , a $55 million-asset lender, focused on the city’s Black communities, that reported $3.3 million in profits in 2023, its best result since the bank’s founding in 1992, according to FDIC records

Temporary funding to pay for construction while waiting for the government and loan money to arrive will be provided by the Philadelphia-based Reinvestment Fund, with help from Beech Capital Venture Fund Corp. and the Neighborhood Progress Fund.

“We are thrilled to partner with [ACANA] and provide bridge lending to this community-supported, Black-led project,” Kareem E. Thomas, the Reinvestment Fund’s chief credit officer, said in a statement. He added that the fund supports “ACANA’s mission to help refugees, immigrants and other community members access critical health care and social services.”

This story has been updated to correct information about Rep. Mary Gay Scanlon.

Citadel's flagship fund rose 2% in April, defying market turmoil

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Amgen 'encouraged' by weight-loss drug interim data, shares jump

Amgen said on Thursday it was encouraged by the findings after completing an interim analysis of a mid-stage study of experimental weight-loss drug MariTide and will no longer develop its oral obesity candidate AMG786.

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Who Can Be Trusted for Retirement Advice? New Rules Strengthen Protections.

More investment professionals will be required to act in their customers’ best interest when providing advice about their retirement money.

By Tara Siegel Bernard

When you walk into a financial adviser’s office, you expect them to put your best interests above all else — in the same way a doctor would, rather than, say, a car salesman. But many people don’t realize that the rules financial professionals must follow vary, depending on where they work and what products they’re selling.

One of those federal regulations, which governs retirement plans, was just tightened: The Biden administration announced new rules on Tuesday that will require more financial professionals to adhere to a higher standard when providing financial advice about your retirement money.

Starting Sept. 23, investment professionals who hold themselves out as trusted advisers will be required to act as fiduciaries — that is, they can’t place their interests ahead of the investor — when customers pay them for advice on individual retirement accounts, 401(k)s and similar buckets of tax-advantaged dollars. The goal is to minimize conflicts of interest, or at least ensure that they aren’t influencing investment professionals’ advice that lines their pockets at the customers’ expense. The rule, which will be published in the Federal Register on Thursday, will be fully effective in September 2025.

The changes, issued by the Department of Labor, which oversees retirement plans, close loopholes that made it easier for many investment professionals to avoid fiduciary status — including, for example, when workers roll over their savings from a 401(k) plan to an individual retirement account. Those transactions, which totaled nearly $800 billion in 2022, weren’t always covered by these investor protections, even though these sums often amount to a person’s life savings.

“If you’re a retirement investor looking for help with how to manage your retirement investments, it’s only reasonable that you get advice that is prudent, loyal and doesn’t involve misleading you,” said Tim Hauser, deputy assistant secretary for program operations of the Employee Benefits Security Administration at the Labor Department. “It shouldn’t matter what product you’re recommending, and that’s what the rule does.”

This isn’t the first effort to update the federal retirement law known as ERISA , which was enacted in 1974 to oversee private pension plans before 401(k)s existed. Strengthening its protections has been the subject of intense debate for more than a decade, over three presidential administrations.

Indeed, critics (including financial industry stakeholders) say the new regulation — initially introduced in October — was rushed, but the Labor Department has been working on different versions since it introduced its first proposal in 2010 . The Obama administration issued a more stringent rule in 2016 , but the Trump administration hit the brakes before it was fully implemented . An appeals court later struck it down in 2018 . Agency officials said they took comments from the financial industry and others into account and made several changes that are reflected in the final rule . But Lisa M. Gomez, assistant secretary for Employee Benefits Security, said the investor protections remain. “There is nothing in these clarifications or changes that one should interpret as a watering down or a real change in position from the proposal,” she said on a media briefing call.

When the onus is on individuals to save and invest for a financially secure retirement, with money that must last through advanced age, investor protections are paramount. Still, individuals might be wondering why they aren’t entitled to fiduciary-level advice on all of their money, all of the time, regardless of what account it sits in or what type of product they’re investing in.

Here’s an overview of how the rules have changed and what it means for you — and how to find fiduciary-level professionals, regardless of the political climate.

What’s changed and where do these rules apply?

The regulation redefines who is considered an investment fiduciary. Before the changes, financial professionals had to meet a five-part test before they were held to that standard — and one part stated that the person making the recommendation must provide the advice on a regular basis. That means one-time recommendations were not necessarily included, which left 401(k) rollover guidance at risk.

The new rule aims to level the playing field for all financial professionals — including investment brokers and insurance salespeople — who describe themselves as trusted advisers when providing advice about your retirement money. It doesn’t matter whether they’re recommending mutual funds, stock investments, insurance products like annuities, illiquid real estate investments — it’s all covered. Investment brokers selling retirement plans to businesses would also be held to the fiduciary standard.

Why is fiduciary status important? What does it even mean?

Fiduciaries under the federal law known as ERISA must follow strict rules of conduct and avoid conflicts of interest. That means they can’t provide advice that affects their compensation, unless they meet certain conditions to ensure investors are protected. This includes putting policies in place to mitigate those conflicts. Investment professionals must also be upfront with customers about their roles as fiduciaries — if they have conflicts, and many do, they must now acknowledge their fiduciary status in writing.

That should go a long way in helping retirees who land in their offices, said Joe Peiffer, a founding partner of Peiffer Wolf Carr Kane Conway & Wise, a law firm in New Orleans. He said he has represented thousands of investors who have received poor advice, including from insurance salespeople who call themselves financial advisers when selling indexed annuity products and universal life policies — often with “disastrous” results.

“They’re exactly the kind of case that the new D.O.L. rule is trying to address,” he said, referring to the Department of Labor. “Because, currently, when we sue these ‘advisers,’ their response is that they are nothing more than insurance salesman that do not have a fiduciary duty.”

I want to work with someone who will always act in my best interest, on all of my money, not just retirement accounts.

No financial adviser is entirely conflict-free, but the ecosystem in which your adviser works matters — and will influence what type of conflicts are embedded in the way they do business. Some brokers, for example, may be paid more to sell one product over another product. Or, the firm itself might have complex revenue sharing agreements, which is when a mutual fund company makes payments to a brokerage firm — and some funds may pay a firm fatter fees than others.

Under the new rule, any financial professional making recommendations must have “policies and procedures to manage conflicts of interest and ensure providers follow these guidelines,” department officials said.

The simplest way to buy advice is to hire a “fee-only” independent certified financial planner who is a registered investment adviser, which means they are required to act as fiduciaries when providing investment advice about securities (stocks, mutual funds and the like). As part of that fiduciary duty, they must eliminate conflicts or disclose them.

“Your odds of conflicts go up, the longer their disclosures are,” said Benjamin Edwards, a professor at the William S. Boyd School of Law at the University of Las Vegas.

What questions should I ask when choosing an adviser?

There are several , but the most important: Are you a fiduciary who promises to put my interests ahead of yours 100 percent of the time with 100 percent of my money? How do you get paid — and will you get paid more for recommending one investment over another? What’s your investment philosophy — does it involve mostly low cost index-based investments?

Oh, and by the way, will you sign this fiduciary pledge ? If they refuse, find a new adviser who will.

Where can I find a trusted adviser?

There are more places now than there have been in the past: XY Planning Network , Garrett Planning Network and the National Association of Personal Financial Advisors (NAPFA ) are all trade groups whose members accept only fee-based compensation, which minimizes their conflicts of interest. They also allow you to search for professionals based on their expertise (retirement planning, for example, or stock option exercise strategies), “You don’t want the adviser to be learning about how to help you on the fly,” said Alan Moore, a financial planner and co-founder of XY Planning Network.

There are also newer entrants, including Domain Money and Facet , which connect people to independent financial planners who get paid flat fees.

Roboadvisers , or companies that lean heavily on technology to manage your investments but also often have human financial advisers, may be a solid option for people who are just starting out — or who have an investment plan they want to put into place and let run on autopilot.

One of the most valuable services an adviser can provide is saving us from ourselves, in the darkest market moments, when an individual may be most likely to give into emotion and sell investments (or buy) at the worst possible time. Just make sure the adviser is a fiduciary.

Tara Siegel Bernard writes about personal finance, from saving for college to paying for retirement and everything in between. More about Tara Siegel Bernard

A Guide to Making Better Financial Moves

Making sense of your finances can be complicated. the tips below can help..

The way advisers handle your retirement money is about to change: More investment professionals will be required to act in their customers’ best interest  when providing advice about their retirement money.

The I.R.S. estimates that 940,000 people who didn’t file their tax returns  in 2020 are due back money. The deadline for filing to get it is May 17.

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Whether you’re looking to make your home more energy-efficient, install solar panels or buy an electric car, this guide can help you save money and fight climate change .

Starting this year, some of the money in 529 college savings accounts can be used for retirement if it’s not needed for education. Here is how it works .

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Term life vs. permanent life insurance

• Term life insurance 

Whole life insurance

Universal life insurance, variable life insurance, variable universal life insurance, simplified issue life insurance, guaranteed issue life insurance, group life insurance, choosing the right type of life insurance, types of insurance faqs, exploring the types of life insurance: a comprehensive guide.

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• Permanent life insurance lasts your lifetime and accrues cash value in addition to offering a death benefit.
• Term life lasts for a specified time and then expires, but it's cheaper than permanent life.
• There are several types of term and permanent life policies, and some don't require a medical exam.

Life insurance is a contract between you and the life insurance company. You'll pay monthly or annual premiums for coverage. If you pass away while your policy is in effect, your insurer must pay a death benefit or your policy's proceeds to your chosen beneficiary.

Life insurance is a crucial tool to manage your risk and protect your loved ones financially. "If you don't make it home and someone relies on your income to live, you need life insurance," says Mark Williams, CEO of Brokers International.

The best life insurance policy for you depends on your budget as well as your financial goals. There are two main types of life insurance policies to choose from: permanent life and term life.

The difference between term life insurance and permanent life insurance is similar to the difference between renting an apartment (term life) and owning a home (permanent life).

When you rent, you have a lease for a certain amount of time. When that lease is over, you can renew it. Likewise, term insurance lasts for a specified period. When it ends, you can reapply for coverage, but your premiums will likely increase based on your age and health status.

Permanent life insurance has a death benefit for your beneficiaries and a cash value you can use during your lifetime. It's like owning a home. Like a home, you build equity in your policy, which you can use as collateral. You can also use your cash value to leave a larger death benefit to your heirs when you pass away. 

Whether you choose permanent or term life insurance, you must undergo the underwriting process. During the underwriting process, your insurer gathers information about your health, job, income, finances, and other personal information to evaluate your risk level. It may require a medical exam, which includes collecting a blood and urine sample. Based on your risk level, the insurer determines your eligibility, premiums, and coverage amount.

The table below highlights the core differences between term and permanent life insurance. 

Term life insurance 

What is it .

The most popular type of term life insurance is a level term policy. You pay fixed premiums for a designated term—usually between ten and 30 years—for a fixed death benefit. If you die during your term, your beneficiaries receive a death benefit. If you outlive your policy and pass away without renewing your coverage, your beneficiaries won't receive a death benefit.

There are also other types of term life insurance policies, some more popular or expensive than others. Take a look at the list below for the top term life policies and their features.

• Annual yearly renewable (ART): This policy provides coverage one year at a time up to a specified age, without an additional medical exam. However, premiums increase each year as you age.
• Return of premium: Returns part or all of the money you've already paid if you haven't used the policy once your term ends. You'll pay an extra premium for this feature.
• Convertible term life: This allows you to convert a term life policy into permanent life insurance without additional evidence of insurability.

Who is it best for? 

Term life insurance provides coverage for a certain amount of time. This makes it suitable for most applicants, as most people's financial obligations decrease as they age. It's also the most affordable life insurance policy, making it accessible to most individuals. You can find our guide on the best term life insurance here.

Whole life insurance is a lifelong or permanent policy in which you pay a fixed premium for a guaranteed death benefit. The insurance company saves a portion of your premium in its own portfolio to increase your policy's cash value. Since whole life insurance offers many guarantees, it's one of the costlier life insurance policies.

Whole life insurance is an excellent option if you need long-term coverage, like if you have lifelong dependents or are a business owner. If you'd like to build a tax-free legacy for your dependents with little to no market risk, a whole life policy may be the way to go. You can find our guide on the best whole life insurance here.

Universal life insurance allows more flexibility than a whole life policy. You can raise or lower your death benefit, which increases or decreases your premiums based on your financial situation and needs. For example, if you find that you need less coverage because your children are grown up and your mortgage is almost paid off, you can lower your death benefit. As a result, this decreases your premiums. 

If you'd like lifelong coverage, steady cash value growth, and flexibility in your premium payments and coverage amounts to align with changing financial needs, universal life insurance could be the perfect policy for you. You can find our guide on the best universal life insurance here.

Variable life (VL) insurance policy, a type of permanent life insurance , was created years after universal life for people who didn't like how whole and universal life commingled their investments with the insurance company. 

Your money is invested in subaccounts that track underlying mutual funds, bonds, and stocks. If the market does well, so do you. If the market falls, so does your cash value, making it riskier than whole and universal life.

VL insurance is best for someone who wants control over how their cash value is invested and can tolerate increased market risk for higher returns. Since life insurance policies tend to yield subpar returns, VL may be best suited for high-net-worth investors who have maxed out other tax-advantaged investment vehicles (i.e., 401(k)s, Individual Retirement Accounts (IRA)s, etc.). 

Variable universal life (VUL) insurance is a combination of universal and variable life insurance. You can raise or lower your death benefit and have your cash value invested in subaccounts that mirror the performance of underlying investments. Again, this is risky, but if the market does well, so does your cash value.

Like a VL policy, VUL is best for those who want lifelong coverage, more investment options, and the ability to weather increased risk for higher returns. It's also suitable for those hat want flexible premium payments and coverage amounts. You can find our guide on the best universal life insurance here.

Simplified issue life insurance doesn't require a medical exam, but you still have to complete a health questionnaire and provide access to medical records. If you fail to disclose a condition and die, your insurance company can deny death benefits to your beneficiaries. 

It's worth noting that some insurance companies enforce graded death benefits, which refers to your insurer withholding your full death benefits for the first few years of coverage.

Simplified issue life insurance is suitable for applicants of all ages with mild to moderate medical conditions (e.g., asthma, obesity, mental health issues, etc.) You can find our guide on the best no exam life insurance .

Guaranteed issue life insurance is easier to obtain because it doesn't require a medical exam or health questionnaire. However, it has several drawbacks. One of those drawbacks is you must be 50 and older to apply. Plus, since this policy is catered towards high-risk applicants, premiums are usually higher, and coverage amounts are limited. 

Guaranteed issue life insurance is also known as final expense insurance since it offers low death benefit amounts and tends only to cover funeral and burial expenses. 

Guaranteed issue life insurance is a viable option for individuals who struggle to obtain traditional life insurance, like seniors, smokers, and applications with chronic, severe, terminal illnesses or multiple health conditions. You can find our guide on the best life insurance for seniors here.

Group life insurance is employer-provided life insurance, usually offered for free as part of the company's benefits. However, if you are discharged, retire, or quit, you will lose coverage. Plus, group life insurance usually has limited coverage amounts and options compared to private life insurers. 

Consider group life insurance if you're employed with a company that offers this benefit and you anticipate staying with the company in the long run. 

The best life insurance policy for you depends on your budget and financial situation. If you have a fixed income with temporary needs, term life insurance may be best for you. If you have health issues that may prevent you from traditional coverage, you may want to consider no medical examination life insurance . If you want coverage for your dependents in the event of your untimely death, then a term life policy works. If you want to build wealth and leave a legacy, a permanent life insurance policy is best.

Your life insurance needs will change as you age, and you'll need to consider children , marriage, divorce, retirement, and caring for aging parents. Consider consulting a financial advisor, estate attorney, and accountant to ensure you have the proper coverage for your goals and life changes. Also, talk to your insurance agent or financial planner about what works best for you and your budget based on your financial situation.

Term life insurance provides coverage for a certain period of time (usually ten to 30 years). Whole life insurance offers lifelong coverage along with a cash value component.

Many term policies have built-in term-to-perm conversion options. If not, you can include it as a rider or an add-on to your policy at an additional premium. This allows you to convert your term policy to a whole life policy without undergoing an additional medical exam or health questionnaire. 

Policies like variable life and variable universal life insurance insurance allow policyholders to invest the cash value in separate accounts that track underlying investments, This offers the potential for growth but exposes you to market volatility, increasing your risk. 

If you don't qualify for traditional life insurance, no medical exam policies like simplified issue or guaranteed issue may be an option. However, these policies tend to have higher premiums and lower coverage amounts.

Consider your financial goals, coverage needs, budget, and any current or potential health issues. Work with a financial advisor for personalized guidance on your individual situation.

Editorial Note: Any opinions, analyses, reviews, or recommendations expressed in this article are the author’s alone, and have not been reviewed, approved, or otherwise endorsed by any card issuer. Read our editorial standards .

Please note: While the offers mentioned above are accurate at the time of publication, they're subject to change at any time and may have changed, or may no longer be available.

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