I am looking to open shop number 2 and need some help getting some financing… I am not sure the right route to take and am wondering if there is someone here that can help mentor me and or point me in the right direction.
Some pertenant info:
Been in business almost three years
The business is an LLC
We Lease
Our sales are upwards of 500k a year… maybe a little better.
All I need is 20k, I am looking to not use my own money in pursuing this next location. I did it on the first and it took all of three years to get it back.
Any help from some seasoned veterans would be very appreciated.
Side bar question has anyone used the processor cash advances… are they benificial and or helpfull in builinding business credit scores?
Run . . . very quickly . . . from this sort of usury. You are mortgaging future “possible” sales for quick money. You’re paying fees to the CC company to run the sales, then paying that same company interest on top of that. PLUS they take their money off the top before you get to see your money. BAD, BAD idea. Sell blood or a kidney first.
I was going to suggest the Cash Advance option. First let me say IT IS NOT CHEAP. But funding can happen in as little as 7 Days.
The plus side is you don’t have to levarage any equity to get the advance. The advance is based simply on your Credit Card Sales. You negotiate the payback time and amounts with the Cash Advance company. Another Plus (or minus) depending upon perspective, the Advance does not get reported to the Credit Bureaus. If you are looking to build your Business Credit this option won’t help BUT if you are looking to get funding without all the hassles of a Bank this is a valuable option.
If you are opting for Cash Advance - before you do - Make SURE you are happy/satisfied with your existing Merchant Services provider before you apply for the Cash Advance. Often the Cash Advance is tied to your processor and the term of the advance locks you in with the processor.
If you are interested I can get you some information.
I have in the past, and probably will in the future, avoided any types of “loan shark” style loans… I am not trying to loose the stability of my current location. However I am in a possition to move on a pottentially very good location and am completely new to the whole idea of using other peoples money for financing… Any other sudgestions would be very much apreciated.
Is it possible to get loans and say 30K and put say 50% down… kind of like home loan???
Your making 500k in sales and you don’t have 30k, or can’t get it from your bank? Do you have a house? Home Equity Line is very cheap and you should be able to pay it back quickly.
If you borrow it… its your money too… Borrow from yourself
I agree with chicagobrospizza. If your doing 500k a year you should be more than capable to open your other store unless your way in debt or not making any profit.
Thanks for the imput… I am doing between 14k and 20k a week… (accept for durring christmas) But this is only durring the last 6 months… It took two years to build to this type of sales. However… I do have more than 30k but do not want to use personal money to do it. Keeping myself liquid is the best avenue for success… In my opinion. If there is a place or way to approach opening number two I am open to it.
I have a home, a rental. Maybe I can refinance it for the extra cash?
I would worry less about liquidity than if the new store is going to be successful with just 30k investment.
Whatever “loan” you get you’re going to have to secure it. Your home is going to be the best and most “liquid” for your bank to use as security, which will give you the lowest cost of funds. If you looking for long term success, that should be important to you.
I think your best bet is a home equity line, its got a low interest rate and you have your cash reserves should something go wrong. There are several benefits here including some tax benefits, talk to your accountant about it.
If you’re worried about putting the loan in your name, then you should rethink opening a second store, because you’re having too much doubt… when your doubt free… open store #2.
All other financing you’ve mentioned is going to be expensive and they’re still going to want a personal guarantee… so why not just get it from your house to begin with.
maybe a little better.