Heres the situation… when I opened I used cash and credit cards to buy all the equipment and everything I needed to open up.
It’s been over a year and I’ve already expanded to twice the size, I had all the credit cards payed off but now ran them all up again buying new equipment for the other side.
Is there, and if there is, what is it… a kind of loan that I can get to pay off all the credit cards and still have extra cash from the loan to get a little bit more equiptment?
I’ve seen “business loans” from places on-line but how they work is, you give them the list of equipment you need and where your getting it from, they pay them, then you get the equipment and pay 20% apr :shock:
I DON’T THINK SO!
Do yourself a favor…tough it out and build responsibly.
You are doing EXACTLY what you said " I don’t think so" to, its just on cards that you already have. The absolute best way to build a business is cash only. I know thats not always possible. You just have to have credit to operate but repeatedly maxing cards to expand is going to cause you heartache and wallet induced heartburn in the future.
If you are using someone elses money to build you are effectively buying a partner. They don’t care if business gets slow because they can liquidate you at the drop of a hat to get their money back. If you are experiencing a great growth spurt, use the money to expand in segments or hold out the money for a blow out build. You can’t second guess the economy and eventually someone is going to grab you by the throat if you don’t do it methodically.
Ive seen so many stellar businesses go broke from having all their cash flow tied up in loans.
Nick, you sure that wasn’t your bank looking for the lein on the casa? I always thought SBA loans up to a certain amount (I think around $200k) were 85% guaranteed with no collateral required, and it’s the evil banker that wants you to sign away your home, firstborn male child, etc.
Either way, they’re both right. A small business consolidation loan backed by the SBA will get your interest % down there in the 10% range last time I checked, based of course on your personal credit history, business credit history, P&L’s, and all that other paperwork crap.
You are actually right. The SBA guaranteed the lion’s share, and I had to put lien for the rest. Bank loaned big, big chunk of the total needs, more than 85% when said and done. My rate was in the 8.5% range to start, and it was variable by quarter, I believe.