Capital sources: Life insurance

A life insurance policy that has accumulated a cash value can be a candidate for a low-rate loan. If, for instance, you have accumulated $15,000 in cash in your policy, you could borrow as much as 80 percent of that cash, according to the insurance company guidelines. Interest rates would be prime to subprime, or from 5 to 8 percent.

Best yet, for those with limited resources, only the interest need be paid back. You are borrowing money you have paid into the policy, essentially borrowing from yourself, so as long as you continue to pay the premiums and the interest on the loan, the policy remains active. But be careful. If you don't pay the interest, the insurance company will take it from the remaining cash value of the loan until the policy lapses. Remember, too, that the death benefit from the policy is reduced by the amount of the loan. Approach the life insurance policy issuer to discuss loan terms, as they administrate all policy changes.

By borrowing against the cash value in an insurance policy, you risk losing the coverage completely should you default. If others would suffer financially from your death, risking this loan may not be the right choice.

Only the business owner can decide whether to borrow money or liquidate savings to get cash for a company, but a sound business plan, complete with cash flow projections, can act as a guide.