How to raise capitol?

[joey895]

Hypothetically, If a person had their own carpet cleaning business. It is an s-corp been in business for two years. Solo operator, business is debt free but also has not established any credit as everything purchased has been paid for in cash so far. The business does not do a lot of volume yet, basically enough to pay the bills at this time.

Is it feasible and what are the options for a business like this to come up with say $175,000 to buy another business?

 

[Fred Homan]

It will take a miracle....

 

[diamond brian]

If this hypothetical person had decent credit, he or she could likely qualify for an SBA loan. If this person has poor credit, then finding a lender will be tough.

 

[Scott]

Angel investors seem like the only hope w/o established credit.

Know any Loaded Angels?

You could talk to a venture capitalist too (aka - "Loan Shark" with a fancy title) but be prepared to pay interest and/or equity out the yazoo.

Scott

 

[Guest]

Do you have personal assets that would be worth at least $175,000.00. That would be your only hope.

Dave

 

[Steve in Omaha]

Ya just have to prove that you don't need it

 

[joey895]

Thanks for the responses guys. By the way I am not talking about for me but it is a relative of mine that is considering it. You pretty much confirm what I already thought. I just didn't know if there may be some other less conventional ways to get business start up money besides just a bank loan. An SBA loan is an idea worth checking on. Where does one go to get info on them? He does have excellent credit. He also has a good paying job right now but if he did something like this he would have to dive right in and leave the job which of course is what makes the prospect of a large loan like that rather scary.

Maybe I should suggest he get a real dark tan and claim to be from India. :shock:

 

[Trevor Truitt]

http://www.businessfinance.com/books/Bu ... ookTOC.htm

This site has a quick read on building business credit. Not much help with your current situation but could help you down the road.

 

[joey895]

Thanks Trevor,

I was just about to start another thread about how to obtain business credit. Had I been smart I probably would have accepted one of the many credit card offers the business gets in the mail on a weekly basis. I'll read through that site then post any questions that it may raise.

 

[boazcan]

SBDC

SBDC

Small Business Development Centers

He needs to find the closest one to him and make an appointment to talk with someone. They will help you talk out your ideas, form a business plan (will never get a business loan with or without collateral without an awesome business plan), send you to good qualified lenders.

The SBA is almost shut down for the year in lending. Their defaults are way up and loan applications are not very good quality. Most banks doing SBA loans are out of money to lend as well. Not all but many. The finance crisis is much further along than just mortgages, trust me. It is getting scary out there for most financial institutions.

A second mortgage or silent partner is about the best options at this point.

Bryan

 

[truckmount girl]

Forgive my ignorance, but just what is a silent partner?

Take care,
Lisa

 

[Scott]

Forgive my ignorance, but just what is a silent partner?

Take care,
Lisa

one who doesn't say anything...shhhh!

Think of an investor who doesn't work in the company day-to-day. He/she still has say-so in company matters (esp financial decisions) but does not work in the business.

Scott

 

[truckmount girl]

Scott, can you sign me up for a few of those!!

:wink:

Take care,
Lisa

 

[Scott]

LOL! Ya know, I was gonna post something like, "well Lisa, I can't it explain it 'cuz you'd never believe me...." LOL!!!

Scott

 

[R W]

I bought my screenprint business from a silent partner. He is a DR, and had bought it for his brother, whom runs a "flea market". He hired a neighbor who had just about run it into the ground. So....me and the "silent partner" came up with a purchase agreement at about a 7% interest rate. It was rough for the first year, but things are picking up. The only other choice the previous owner had was to close up the shop and be stuck with a lot of equipment, that he would have to unload.

 

[Jim Nazarian]

I saw this in this weeks Barrons... http://www.prosper.com/

Prosper has more than 430,000 members and $90 million in loans funded. It's an open marketplace; borrowers and lenders set the interest rates in an online auction environment much like eBay's.

People who need money request it, and other people bid for the privilege of lending it to them. Prosper makes sure everything is safe, fair and easy. Here's how it works:

I haven't used the service but I thought it might help someone out.

 

[Steve Toburen]

Two words: "Owner finance".

Steve

PS Of course, if a business seller is desperate enough to unload this business to carry the paper (especially unsecured) then the logical question is, "Why does he want out so bad?" I'm not saying run away but you should be very careful.

And yes, I agree with the above posts on borrowing 175K with no credit. Not going to happen.

 

[hogjowl]

Why are your freakin PS's longer than the body of your message?

Do you do that just to be annoying, or are you ADD or sumptin? :roll: