 | Any tips on how to finance startup cost for small business with no money down but excellent credit? |
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Question: Any tips on how to finance startup cost for small business with no money down but excellent credit?We are going to sell autos on eBay motors and off our lot, auto detailing and repairs. We have been to a couple of local banks and just don't quite seem to fit their criteria. We've always been self employed in some form so our tax returns are pathetic. We don't have any money to put into the business which, well, that's why we need financing. Am I to believe that a business can't be started unless you have thousands of your own money to put into it? SBA apparantly requires 25% of the loan amount to be available from us as cash. If I had that money, I probably wouldn't need much of a loan. Anyway, I'm a bit frustrated because we're not fitting into the commercial lending 'box'. We are talented intelligent people with excellent credit but short on cash. Any ideas?
Answer: -This is a free capital society ---- you are able to raise capital from private investors. "Friends and families" or someone that would really get how lucrative this could be. You don't need banks at this stage. SHORT SUMMARY---Put the numbers together, a short biz plan, talk to people about having them invest in you and offer your own interest terms using a promissory note or offer stock in your new company. You'll need the help of someone that has done it or a legal professional but it is VERY common...I've raised a million plus. Or get people to invest with their services for a piece of the pie. Any local auto dealers would be interested in your deal? Also, consider doing something smaller to start and scale it up so people will have confidence in investing. -When we bought a nail salon we were stupid to use a credit card at 9.9%. The interest rate went up, the business only lasted for 3 years, and we ended up paying increasing interest rates for about 3 years after the shop closed.Don't do that.Take out a home-equity line of credit (i.e. 2nd mortgage). The interest rate is much less (than typical credit-card rates), will be fixed for the long term, and is tax-deductible.
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