im thinking of getting a front from the bank for 6 months of operating expenses (and personal expenses). would i need to submit a business plan and possibly have guarantors that have money that will pay the bank if my business falls through? i have some people with good jobs/degrees/income that could probably sign on the dotted line to back me up. has anyone done this before? i only really need $40K for 6 months - - thoughts? i am confident i could generate at least $50K in sales in 6 months to pay back the banks. it would be nice to be able to spend my full days on this venture and have the freedom to concentrate on marketing and strategy. i currently have a full time job, but would like to quit it if this gets approved. does anyone know what kind of banks would be open/supportive to something like this? the first 6 months would only be training wheels to growing the business.
Do you have collateral you are willing to give up if things don’t work out the way you planned?
in the current market conditions, the only way you will get a $40k loan is through collateral, must likely it will need to be real estate. check out the SBA programs as well if your are in the USA: http://www.sba.gov/financialassistance/borrowers/guaranteed/ Depending on the business area you plan to work in, local and community banks tend to be willing to take more risk on small businesses, especially if it is likely to reflect well on their community relations.
If you have a guarantor w/ 40k in cash sitting at a bank you could have them roll that into a 6M CD (which they will still be earning interest on) and have them pledge that as collateral to secure your loan. Most any institution would make you that loan with or without a business plan.
ok - cool - thanks guys for the info
Don’t know about USA but some friend of mine in Montreal had a hard time raising 15k to buy a business he is now operating. Pretty hard to believe. The guy was not in debt and was never bankrupt, but had nothing to pledge. What’s that venture of yours if you don’t mind me asking ?
Just thought of this due to the credit card discussion in the other thread with QuantJock, but why don’t you try a fatwallet style AOR? If you have good credit I know of people getting as much as 600K (per SSN) interest free for anywhere from 12-18 months.
Viceroy Wrote: ------------------------------------------------------- > Don’t know about USA but some friend of mine in > Montreal had a hard time raising 15k to buy a > business he is now operating. Pretty hard to > believe. The guy was not in debt and was never > bankrupt, but had nothing to pledge. > > What’s that venture of yours if you don’t mind me > asking ? That’s why Canada is considered to have the most stable banking industry and has not been hurt by the crisis.
I dont see this happening, except for the secured CD method. But then why not borrow that money from your friend and pay him interest cutting out the bank? He is already exposed to your success/failure and being paid 1% interest vs. the WSP+ that you will be paying. Contrary to popular belief, banks dont like to lend money for people to “start” businesses.