Filed under: Small Business Loans
Apple. Dell. Nordstrom. Mattel. Wrigley. These are all billion-dollar business empires. One thing they have in common: They started small. They started small with some loan from family and friends and now they are in the list of fortune 500!
One great thing about starting small is the potential to grow big, as the people who started the above mentioned businesses have proven. It depends largely of course, on the tenacity and perseverance with which we pursue our dreams. We all know that we cannot succeed in any venture, especially in business, without having these qualities (save for the few fortunate heirs and heiresses who were just handed down their billions without the need to sweat it out), and the most essential truth, a no-brainer, in fact: A capital to start that business running. All these are necessary components to start, run and maintain a business.
Realistically speaking, not all that start business with as much determination can end up becoming billionaires. But a small business that is well-managed, thus a source of a regular income, can mean survival for those who benefit from it; It also keeps intact the pride and self-esteem of persons who want to be productive in their own little ways.
In the light of the economic downturn where many who once used to be gainfully employed now find themselves laid-off from their jobs and have difficulty finding a new one, one best option aside from moping and blaming the world is to start a business. We often hear that if anything, one good thing brought about by the recession is the rise of business-ownership mindset in the people, especially those who have been badly hit by their companies’ strategic downsizing.
Now, they may be able to decide what business they would want to put up based on their passion or a feasibility plan, but the question is, do they enough savings to finance this venture? Can they borrow from their family and friends? If the answer to these questions are no, borrowing from a lending institution is the next best thing.
The first step is to know where to find lending agencies that can offer financial assistance with a reasonable interest. SBA or Small business Administration is a government agency that administers loan guarantee programs to encourage development and growth of small businesses. It has at least one office in every state so they may go there and inquire about the details on how they can obtain a small business financing loan.
Another option, for women, is to go to WBC (Women’s Business Centers). These centers provide support and services to women in rural and metropolitan communities, who are looking for capital for their small businesses. CDCs (Community Development Corporations), which major thrust is into low-cost housing and creation of jobs, also offers services and assistance for micro or small businesses and releases loans for small business of $10,000 or less.
These are the most recommended agencies for those who have sound business plans yet lack the funding. There could be many other lenders out there who also promise financial assistance but the most important thing before anyone jumps into borrowing is to plan carefully, check these agencies’ authenticity and study well their interest rates and compare it with your capacity to pay, and exercise sound judgment to minimize the risk.
Filed under: Credit for Small Business, Loans for Small Businesses, Small Business Financing, Small Business Loans
Loans for Small Businesses
Small businesses have proven beyond any doubt that they can be responsible. This has been evident in most countries all through the world. However, there are so many milestones which block small businesses from receiving credit openly without so many restrictions. Some of the major milestones are: history of poor repayments, poor state of assets, poor service delivery and so on.
The very initial and most essential part of the preparation is having an appropriate and most reliable business plan. A plan that can talk out the business, if it were to be presented to the loan providers, they will be able to scrutinize it and still decide to give you a loan. The second thing that needs to be handy is your business personal history. An outstanding history will definitely draw the attention of any loan provider. This means that your mechanism on how to settle external debts of the business must be reputable.
The other major aspects to lookout for are: First, you need to come up with a list of all individuals that you are certain can come to your aid whenever necessary. Secondly, make sure that your assets are not committed somewhere else, meaning that if a bank needs to access them and handles them as collateral, then they should not face any problems.
Once all the above have been accomplished, you should thereafter prepare yourself on how you will attend to the expectations of the loan provider. Remember that the level to which you can ask for small business financing depends entirely on the amount of security you have set aside the loan. Other things that you should put into consideration are: what strategies will you present to the loan providers on how you will repay the loan; and a full representation of both the personal and business financial statements.
You are now almost there! Carry out your research on the best providers of small business loans in your vicinity. Make sure that the financial institution you are yet to involve yourself with has all it takes to help a small business like yours. Banks are usually known to almost everyone. So, there must be a friend or two who must have received a small business financing loan from a well-known bank around you. Such information can help you to prepare in advance what you need to present to a bank or any other financial house in order to either receive small business financing.
Filed under: Small Business Loans FAQ
Helen asks…
How to provide financing at small car dealership?
My uncle has a small used car dealership, he used to sell nice quality cars, and being the honest person he is, he even let some customers make payments (some of which who never paid) He still had his business but dealt with much lower quality cars that people in the town he’s in could easily afford. He’s wanting to begin selling nicer cars again, and I’m wondering how he could provide financing for his customers? How would he go about this?
admin answers:
He’s being entirely too nice. If his customers can’t get financing at the bank, he shouldn’t finance them. If he does anyway, then he needs to put his name on the title as lien holder and go get his property if payments are not made as agreed.
He can hire a towing company and give them a list of those cars which need to be picked up, and they will gladly do it for him at a price.
Mandy asks…
Is the 30 billion dollar small business stimulus another Obama failure before it has even started?
(AP) NEW YORK – President Barack Obama’s $30 billion small community business lending program faces one big challenge: many of the community banks and businesses it’s supposed to help don’t want it.
The lending program is part of a bill that passed the House of Representatives on Thursday and now awaits the president’s signature. The legislation contains a mix of tax cuts and credits aimed at helping small businesses. The centerpiece of the bill is an effort to make billions of dollars available to community banks for loans to small businesses.
It seems like a simple effort to unclog a credit pipeline that has been blocked since the financial meltdown two years ago. But interviews with seven community bankers, as well as small business owners, show a reluctance to participate.
“People in my constituency can’t get credit, and this will get money out to small businesses, who are the engine of job creation for this country,” said Republican Sen. George LeMieux of Florida, who co-authored the amendment that created the lending program.
Bank executives say their customers don’t want loans, even at low interest rates, because the sluggish economy has chilled expansion plans. Some say the federal money isn’t worth it because they fear it will come with too much regulatory oversight.
“We have taken a strategic decision not to have our primary regulator, the government, also be a partner in our bank,” said William Chase Jr., CEO of Triumph Bank in Memphis.
Chase said the bank already has enough capital to meet the paltry demand for loans. “Our business customers are mired in uncertainty and are reluctant to invest in their businesses,” Chase said.
Ninety-one percent of small business owners surveyed in August by the National Federation of Independent Business (NFIB) said all their credit needs were met. Only 4 percent cited a lack of financing as their top business problem. Plans for capital spending were at a 35-year low.
Jack Rajala just laughs when asked if he wants to take out a loan today. He’s in a fight to save his family’s lumber business that has been buffeted by the recession and housing meltdown.
http://kstp.com/business/stories/S1759224.shtml?cat=1
admin answers:
This answer should apply to all businesses. Why should any government money (taxpayers money) go towards stimulating any business? By pure definition a business is a a commercial organization designed and paid for by it’s shareholders to produce and sell a product or service in order to make a profit. If the business makes bad decisions that forces the business to fail or go out of business, then the business needs to fail and no government bailouts or subsidies are necessary.
Our government money (taxpayer money) should not be spent on subsidizing any business including any banks, insurance companies,auto makers, or any other types of business. If the business can’t make it on it’s own, for any reason, then the business deserves to fail, should fail, and if necessary regroup and try again, but on it’s own without any help from the taxpayers.
As far as bailouts are concerned this option should not be left up to the politicians but be up to the taxpayers to decide if they want to bailout a private corporation or not, as it is the taxpayers money or future monies that would be used to bail-out these private for-profit businesses. The ability of politicians to spent taxpayers money for the purpose of bailing out private corporations should be taken away from politicians. Politicians have shown in the past that they can’t or won’t spend tax payers money properly or responsibly.
William asks…
Where can i find details of finance companies for customers purchasing a vehicle from me?
I am in the process of planning a small business selling cars and am looking at providing finance for customers through h.p. can anyone give contact details of companies in this field and any recommendations.
I am based in England UK
I want to provide this as a broker or similar so i can do the deal there and then.
admin answers:
If you want to stay small you should be purchasing auto’s at wholesale price and obtaining at least 70% of your investment in the form of a down payment.
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Filed under: Small Business Loans FAQ
Linda asks…
Small business loan with no credit, no income to speak of?
Here’s my dilemma. I’ve been recording my band and other bands around the area for 7 years now and I’d like to start a recording studio. I just graduated college and have no job at the moment. (Summer job lined up, but not much money)
I checked with my bank about a small loan and was told that I need at least 30% of that money to apply. I also have no credit at all, (no debt either) and no collateral to speak of.
My plan at this point is to work and save up what I need to start. But – I thought even though it sounds ridiculous, maybe there’s some other way to get the money? I’ve also been turned down by every credit card I’ve applied for, so that’s also out. Any ideas?
admin answers:
Word of advice..
1. Don’t listen to these people telling you to go to these websites. They are either spammers or work for the company.
2. Try to save up money, Its going to be very difficult and I also recommend applying for a capitol One credit, They offer a credit card for people who dont have credit..Although its going to be a high interest rate around 21%. Just don’t use it for stupid things, use it for buying gas then pay most of what you spent off every month off. Keep paying on time and you will soon build a credit score. Do not forget about paying every month because it will effect your score for years.
Ruth asks…
Small Business Loan Advice Needed-Bank or Credit Union?
I am looking into applying for a small business loan within the next year. I have my business plan & cash flow projections together and even a retail space I want to look into leasing (Gift & Decor store). Anyone out there who works for or has been in this situation that could offer advice? I don’t have bad credit, but not over 700 (which I hear if it is less than 700 it is difficult to get a loan from a bank) and my husband and I have bought a house in the last year but not enough equity to try to go that route.
My question is….without perfect credit but w/ a great business plan and no negative inquiries on my credit, would going to a Credit Union be a better plan than applying with a national bank chain?
New to this and trying to do as much research as possible before applying for anything. Looking for a $10,000 start up loan. Any help is appreciated. Thanks!
admin answers:
You would likely be better off going to a bank and try to get an SBA loan. There are strict requirements for it but you can talk with a lender who can walk you through it. Also check in your area for a chapter of SCORE. They have free assistance for starting small businesses and often can help you qualify for a loan if your business plan is sound. Good luck!
Mary asks…
Start up Loan for new Incorporated Small Business? Poor personal Credit.?
Good day,
I’m planning out a new business that will be Incorporated in the State of California. I was wondering if anybody has a few good leads to a loan for a new startup Incorporated Business with no credit history, where the only person behind the corporation has poor personal credit.
Thank you for your help in advance!
admin answers:
You’ll need a well documented business plan and I would talk to a business counselor before you do anything especially spend money. You have to determine whether you’ll start a web based business or one with a store front. I’d call the local office of SCORE (go to http://www.score.org and input your zip code to find the chapter nearest you), the advice is FREE.
The counselor at SCORE will help you write the business plan because it will force you to dig out all of the start up details and the costs of starting your small business and force you to also understand all of the aspects of this business including the customers you’ll concentrate on (your market ) and how you’ll go after them.
You’ll need to register the business with your state controller’s office and make sure that you have any city and county licenses if any are needed where you live. Your counselor can help you get in front of and prepare a proposal for the SBA to guarantee a loan for you. You can also try http://www.prosper.com the people-to-people lending place. All of this will come out in a business plan.
Try this link :
http://www.ychange.com/small-business-consulting-articles.html and read some of the articles especially the ones about a business plan and starting a business.
Good Luck
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Filed under: Small Business Loans FAQ
Robert asks…
I’m a small business owner with bad credit in need of financing. Is it possible?
I am currently leasing a suite in an office building. I have opened a nail salon and am having a hard time keeping up with the rent. I want to get some sort of financial help to purchase equipment that would allow me to rent booths to other operators, which would help me generate revenue. I need money to purchase manicuring tables and chairs. If I could just get a little help, I could really get this thing up and running, I have been told that I am very good, and being self-employed is wonderful. I am a licensed manicurist and I have big dreams of having my own franchise of nail salons. I just don’t know how I can do that when I don’t have the money already. I’m just trying to better myself and provide stable work environments for others. You can check out some of my work at http://www.myspace.com/nailit2em
admin answers:
First of all you need to, if you haven’t yet, draft a business plan to show a lender what you plan on doing to generate money. A lender will look at your plan and decide what the risk is. Unfortunately your credit is a problem, but some lenders will take the risk if you have been in business for at least 24 months. You may to take a higher interest loan or use collateral to secure the loan as well.
Donna asks…
I have bad credit and need financing for my business to expand? Does anyone have any ideas on how to do this?
Hello,
I have a small residential and commercial cleaning business that I am looking to expand. I have been shopping around for financing through traditional lenders, but due to my 518 FICO score and millions of charge-offs, I can’t get fianancing. I have applied to a few non-profits in the state that I live in. I have also been pitching my case to some friends. I don’t have any family that can help. They all have bad credit and so do much of my friends. I really do not know anyone with cash on hand either. I have been looking into getting an angel investor or a venture capitalist, but I do not know if that’ll work. I’ve posted an ad on Prosper and I never get responses. Again, I think that this is due to my bad credit. I am seriously running out of ideas. I have 15 months invested in this and I do NOT want to give up. Does anyone have any suggestions or can anyone suggest a place that can help me? I know I need to fix my credit, but I need the money to do it. Please, please, help!
admin answers:
I think Prosper.com may be your last best chance. Maybe you need to change your writeup. Potential lenders want to know about your past but, most of all, they want to hear your honest description of why and how you think you’ll be successful this time. Potential lenders like to invest in people, not in businesses.
Just be careful that any solution you decide on is not taken in desperation and quick judgement. The results could make your situation worse than it already is.
I’m sure you realize it now, but others should learn from your experience that poor financial responsibility has very serious long-term effects that are extremely difficult to overcome.
Best wishes to you.
Donald asks…
how do i get start up finances to start a small business with bad credit?i have a great idea,just no money…?
i have a business plan.but the finances aren’t here to imploment it.
admin answers:
Entrepreneur offers a great site dedicated to money & finance – see below.
Research, research, research – this cannot be stressed enough. Read as much as you can. Here are some book titles that are relevant:
* Free Money for Small Businesses and Entrepreneurs by Laurie Blum
* Finding Money: The Small Business Guide to Financing (Small Business Series) by Kate Lister, Tom Harnish
* Financing Your Business Dreams With Other People’s Money: How and Where to Find Money for Start-Up and Growing Businesses by Harold R. Lacy
* No Cash No Fear: Entrepreneurial Secrets to Starting Any Business with No Money by Terry Allen
* Starting on a Shoestring: Building a Business Without a Bankroll by Arnold S. Goldstein
There are plenty of free informational resources out there. Check the source box for links to articles.
Hope that helps! I wish you much success & happiness in all your ventures!
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Filed under: Small Business Loans FAQ
Chris asks…
Poll: Pizza Hut or Dominoes Pizza or Sbarro Pizza?
admin answers:
Sbarro Pizza
Linda asks…
Does anyone have a Sbarro Pizza….?
Menu with the prices? I’m taking my son and his friends there for a pizza party. I don’t see the prices on their website and it’s been years since I’ve ate there.
LOL….Actually there’s one on the turnpike where I live and the only shop that makes the NY style pizza. All the other pizza places are pretty bad.
admin answers:
You’re better off going to Chuck E. Cheese. That way they can eat pizza and play lots of games and have a lot of fun. You could also try an indoor amusement park (most serve pizza) or a dine-in Pizza Hut since I believe they do parties. Look at local pizza places also. As has been said, Sbarro is a mall and airport chain and I don’t believe they have any stand-alone stores.
David asks…
Is Sbarro pizza good?
admin answers:
No, it is too greasy. There are many other places with better pizza.
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Filed under: Small Business Loans FAQ
Ken asks…
can i get a business loan with bad credit?
i own a small business. i need a loan but i have really bad credit. its a sole ownership, does anyone know any good banks or where i can get info
admin answers:
I agree with Victoria Dingley check them out and you might be able to put you r business if not already used good luck
Chris asks…
How can I get a loan of $30,000 to $40,000 to start a small business? No job and bad credit here.?
Is there any way I could use the small business as collateral once I get it up and running? Is there any way I could use the loan as collateral? I have no job or funding to start off with.
admin answers:
In your dreams…and even there they do a credit check.
Donald asks…
Legitimate small business loans/grants websites/companies?
Is there a secure site or company I can visit in Florida that deals with small business loans or grants even with bad personal credit?
admin answers:
The SBA, which guarantees loans thru your local bank is best.
I used them to borrow $750 K for mine some years back, and they guaranteed 80% of the loan…
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Filed under: Small Business Loans FAQ
Susan asks…
why is it so difficult for minority bussinesswomen to be funded?
Why does the color of my skin as a female, make my life a living hell to ve funded as a business woman?Whites.asians,and illegal
aliens have a better chance of bing funded for thier businesses
than “dark women of color”/For five years i have tried to ecome funded for my nursing medical registry, no one will fund me, no one will hear me. I questioned other minority “women of color”,
no one would fund them ,no one will listen. The laws of society were made for all, because of my color i struggle in the bsiness world. NO ONE HELPS US
admin answers:
There are many programs specifically designed to fund minority and woman owned businesses. Spend some time on the Small Business Administration site http://www.sba.gov to get started. Contact your local chamber of commerce. There is funding out there for people that are willing to invest in themselves and that have a great plan put together. It’s out there but you have to search for it, it’s not looking for you.
Robert asks…
Are there any small business startup grants for women right now?
I would like to start up an public accounting business in Arizona and need funds to start it up. Any ideas?
I have found most of the available sites are pay sites….
admin answers:
It is hard to find grants to start a business. Unlike the myths that some perpetuate, federal government and even private foundations hardly give grant money for starting a for-profit business.
One possible exception is for companies developing or exporting agricultural goods, including food and forest product. Another exception could be the Small Business Innovation Research (SBIR) or Small Business Technology Transfer (STTR) programs http://www.sba.gov/aboutsba/sbaprograms/sbir/index.html , which fund the research and development of technological innovation that meets specific government needs.
Your best bet actually will be from the states if they offer grant programs for women (or any other special interest groups — minorities, women, disabled, veterans, etc). Or check with non profit organizations, particularly women organizations if they offer grants. Examples include
Iowa Women’s Foundation http://www.iawf.org/
New Mexico Women’s Foundation http://www.nmwf.org/guidelines.html
Even SBA does NOT give out grants. From the SBA website http://www.sba.gov/mostrequesteditems/CON_FAQ2.html
“The U.S. Small Business Administration does not offer grants to start or expand small businesses, although it does offer a wide variety of loan programs. (See http://www.sba.gov/financing for more information) While SBA does offer some grant programs, these are generally designed to expand and enhance organizations that provide small business management, technical, or financial assistance. These grants generally support non-profit organizations, intermediary lending institutions, and state and local governments.”
Nonetheless, you can go to the Catalog of Federal Domestic Assistance (CFDA) http://www.cfda.gov and Grants.gov http://www.grants.gov – these are two sites created by the federal government to provide transparency and information on grants. Browse through the listings and see if you can find any grant that would support a for-profit venture.
Here is a listing of federal grants for small businesses. See if there is any available for individuals for starting a business — THERE’S NONE.
Http://12.46.245.173/pls/portal30/CATALOG.BROWSE_BENEF_RPT.show
Most of the federal grants are given to specific target groups with specific requirements (e.g. Minority business owners involved in transportation related contracts emanating from DOT – Grant#20.905 Disadvantaged Business Enterprises Short Term Lending Program
Grants are also often given to non profit groups or organizations involved in training or other similar activities (grant 59.043 Women’s Business Ownership Assistance that are given to those who will create women’s business center that will train women entrepreneurs
Laura asks…
Small business start up financing?
I was wondering if anyone knows of funding sources for women starting a small business. I have heard there are grants and loans available for women but don’t know how or where to access them. Also, any info on small business loans is appreciated. Thanks!
admin answers:
I can think of a few resources for you to look at. We started a Yahoo Group with grants and loan programs especially suited for small businesses and real estate. I’m not sure what kind of business you want to do but you could “double dip” by taking advantage of women’s grants/loans as well as real estate grants/loans. If you are getting into commercial real estate, we also developed a program to purchase commercial properties with only 1% of the purchase price as down payment instead of the usual 20% or so, which greatly reduces the demands on your cash reserves. I’ve put links to the resources I’ve mentioned below my answer in case you wish to check them out.
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Filed under: Small Business Loans FAQ
Mary asks…
I need a small business loan with really bad credit. Is this possible?
I have read all of the other questions in this category all answers are about the same. Have done some research but serious about needing a loan with bad credit. Bring in $70,000 a yr from job that will be kept!! Need aproximatley $5,000 to $10,000 to start business that I know will take off! The only problem is I have seriously bad credit. No collateral. I know this sounds far fetched, but is it possible? All bad credit is from medical bills or little things.
admin answers:
If you make 75,00 a year then you should be able to make it happen. Collateral is how i have done all of my larger loans, but you may have to either have a co signer, or just take a high interest rate on the loan in your name.
Lizzie asks…
cani get a small business loan/grant with bad credit?
i have a $8,000 with a bank and a few old phone bills and would like to borrow any where from 5,000 to 30,000
admin answers:
Grant maybe, loan no
Linda asks…
how can i get a loan with bad credit to start a small business?
10,000 dollar loan to start a carpet cleaning business.
admin answers:
Unless you have collateral like a house or newer car to take a loan against, you can probably forget about getting a loan to open your business. I know a lot of people think the Small Business Administration will help, but their funds are limited and so they can help only select applicants with good credit and a sound business plan that will likely succeed, after they have been turned down by a couple of different banks.
The other route is to find someone with good credit or assets who will guarantee the loan, and there really aren’t a lot of people willing to take that risk, even for a friend or family member. I’ve started businesses before, I had good credit in a time when the banks would lend money to almost anyone, but they turned me down. I ended up having to run up my credit cards and pay off high interest from them. That’s what a lot of entrepreneurs do. It’s sad you have to put your personal credit and all your personal assets at risk but that’s what most of us do when we are starting out.
Now, if you have limited assets and no one who trusts you personally enough to lend the money, here’s a few options:
Start a general cleaning business on the side. Using your vacuum cleaner, home carpet cleaner, a mop and bucket, some rubber gloves and other general cleaning supplies which you probably already own. Some people will even provide the cleaning supplies if you will do a good job and come when you are supposed to. It pays pretty well and it really mostly all labor. Don’t forget to with-hold enough to pay your own taxes, use the rest to set aside as extra income toward your goal of opening your own carpet cleaning business.
Ask the person selling you the equipment for the carpet cleaning business if he/she will let you pay it out in installments as you earn money with it. If someone is selling a used van and carpet cleaning system, they might let you do that. Even offer to “technically” work for them, but with the total profit of doing each job they send you to going toward the selling price of the equipment. Work other carpet cleaning jobs you line up in the evenings or on weekends for personal income. They may charge you a little more for the equipment to do this, but figure that as finance charges. Just be honest, true to your word and pay them no matter what, no excuses. If the equipment breaks down, be ready to fix it yourself, they are doing you a favor, you shouldn’t expect them to pay for it.
Start lining up carpet cleaning jobs, rent the equipment at the hardware store or tool rental place. Most people don’t care if it is a van, they just want a clean carpet.
Make sure carpet is popular where you live. Many people have been switching to wood floors and laminate wood floors. Go to work for one of the companies installing wood laminates. Learn how to do it, it really isn’t that difficult to install them with just a little practice. The customer picks out and purchases the flooring and sound barrier, at one of the “do it yourself” stores, all it takes for you is a power saw with the correct blade, a tool to snug the planks together…very inexpensive and some knee pads. Try to learn how to sand and refinish existing wood floors. Again you could rent the equipment when you have a job until you can afford to buy your own.
If you do things that will be mostly all competitive labor cost to get the money, you will find it will add up within a year or less. Just don’t spend the “extra” money for anything else.
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Filed under: Small Business Loans FAQ
Lizzie asks…
Does anyone recall the database started so people could provide small business loans to developing countries?
I saw it on TV a year or so ago. If I’m not mistaken, the creator was in the running for the Nobel Prize. It was started so anyone who had some money to invest, could provide small loans to individuals in developing countries to start their own businesses. Then the loans were repaid with interest and the satisfaction of helping develope the economy of a small country. I think the preliminaries were had positive results, as people were repaying as they should. Does anyone have any information on it or a link?
admin answers:
It was Mohammed Younus, the economist who put the word “microloan” on the map with the Grameen Bank in his native land of Bangladesh.
Here is his profile on the BBC website:
http://news.bbc.co.uk/2/hi/south_asia/6047234.stm
Joseph asks…
Are there any companies that offer small business loans with a deferment period?
New business loans for small businesses with an option to have a deferment period in order to start your business without the stress of loan payments.
admin answers:
Go to http://www.score.org/ and in the upper left hand corner, enter your zip code. On the next screen, you will get information on the nearest SCORE chapter. Call them and arrange for a free meeting with a SCORE counselor to review your business plan and discuss various loan options available to you.
SCORE is a nonprofit association dedicated to entrepreneur education and the formation, growth and success of small business nationwide. SCORE is a resource partner with the U.S. Small Business Administration (SBA).
SCORE has 389 chapters in locations throughout the United States and its territories, with 10,500 volunteers nationwide. Both working and retired executives and business owners donate time and expertise as business counselors.
Steven asks…
What is Unsecured Loans For Small Businesses?
admin answers:
In contrast to large companies that have equity in assets, small businesses with little assets and no property depend on loan options that are unsecured. In addition to missing collateral, most entrepreneurs that develop small businesses struggle in early stages creating a less than perfect financial history making approval for an unsecured business loan or line of credit unlikely. For this reason an unsecured business cash advance tends to be a more suitable option for small businesses.
Cash Advance as an Unsecured Business Loan Alternative
Business cash advances offer the following benefits not available through unsecured loans:
•Flexible repayment options!
•Unsecured, no collateral necessary!
•Bad credit not an issue!
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Filed under: Small Business Loans FAQ
Maria asks…
Best computer programme to deal with finances of small business?
Microsoft money and quick books have been recommended – any feedback greatly appreciated!
admin answers:
Quick books, TAS books or Sage. If you realisticaly anticipate growing your business then Sage has the easiest upgrade path. Sage is also probably easier to get staff if you need to or consulatants to help you set it up.
Laura asks…
Whats my next step, I finished my business plan…?
I finished my business plan, I printed out the app for small business financing authority loan guaranty program….whats next? Apply for a loan…or are there other steps to do first? Business license?
admin answers:
Go to http://www.score.org/ and in the upper left hand corner, enter your zip code. On the next screen, you will get information on the nearest SCORE chapter. Call them and arrange for a free meeting with a volunteer SCORE counselor. They will guide you through the process.
SCORE is a nonprofit association dedicated to entrepreneur education and the formation, growth and success of small business nationwide and is a resource partner with the U.S. Small Business Administration (SBA).
SCORE has 350 chapters in locations throughout the United States and its territories, with 13,000 volunteers nationwide. Both working and retired executives and business owners donate time and expertise as business counselors.
Susan asks…
Would $300,000 combined with a $200,000 loan be enough?
I’m looking to purchase a Tim Hortons franchise in Vancouver, BC, Canada. I have $300,000 but I still need about $200,000 to meet Tim Hortons requirements (up to $480,000 not including tax). I was hoping to get a loan from the Canadian Small Business Finance Program to support me. Is this possible? Will it be enough? Thanks!!!
Franchising Program
Franchise Cost: $430,000 to $480,000* plus all applicable taxes (this includes a drive-thru)
Additional Working Capital: (start-up costs) $50,000 (unencumbered)
At least $144,000 of the franchise cost must be unencumbered (cash or liquid assets) in addition to the $50,000 working capital which must also be unencumbered. The remaining amount may be financed through various lending programs offered by the chartered banks, providing, of course, the candidate meets the normal borrowing requirements.
The specific cost of a Tim Hortons license will depend upon the Tim Hortons building size and the required furnishings and equipment to be installed. The cost of a Tim Hortons license may exceed $480,000 in certain locations due to higher development costs.
Included in the cost of a franchise is the following:
all equipment, furniture, display equipment and signage
8 week training program in the Oakville, ON, Training Centre
a store opening crew to assist the openi
a store opening crew to assist the opening of the Tim Hortons store (for a maximum period of 2 weeks)
the use of all Tim Hortons Manuals
right to use trademarks and trade names
support from Head Office personnel who have vast knowledge in the food service business.
Not included in the cost of the franchise:
The building
The property on which the restaurant is built
The term of the License agreement is usually 10 years and usually with options to renew for up to a further period of 10 years.
The Real Estate and Development Department approves and secures all locations upon which Tim Hortons stores are built, whether they are leased or purchased. Therefore, an applicant is not expected to bring forward a site and/or concern themselves with the development of such. Once the site is secured, the Construction department begins the process of building the store.
* Subject to change without notice.
admin answers:
You’d better check with Tim Horton’s themselves – my brother managed a Tim Horton’s for nearly 10 years and wanted to buy one and they had a lot of requirements after 16 months he still couldn’t meet.
I don’t remember the financial specifics, but they wanted a great deal of the money to come from him – not from a loan. His inlaws were more than happy to loan him money of their own, but Tim Horton’s didn’t want any silent partner owners or anything along those lines – they want every single owner to be hands-on involved in the day to day operation of their store.
Do also keep in mind that Tim Horton’s is extremely protective of their brand. They carefully select each location to succeed – to the point there are more people wanting to own a franchise than there are locations available so they can choose to be very picky and will not just accept anyone who has the money. Good long experience with restaurant/store management is a must – and sometimes even that’s not enough.
I would suggest since you do seem to be quite serious that you start making formal inquiries to Tim Horton’s to understand their application process for a franchise and to see the cost of a franchise.
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Filed under: Small Business Loans FAQ
Robert asks…
How many years can you finance an SBA loan for?
How many years can you finance an SBA loan for?
I am interested in getting an SBA loan for my business. Is it possible to borrow lets say $500k on an SBA loan and finance over 30 years. And what would the typical interest rate be?
admin answers:
The SBA is a guaranteer of loans. They don’t actual give the loan. Typically to borrow that kind of money, your business would have to be operating for a least 2+ years. You can get a microloan for up to $50K. The APR is decent and repayment time depends (7-10 yrs). I am in the process of trying to get a microloan, it requires less, but it is a great way to get money for your start-up. Good luck!
Mandy asks…
Has anyone ever heard of getting an SBA loan for the downpayment of real estate investment property?
is it possible? is it permissible? i want to buy a plex and on the verge of closing a hardmoney loan to get it, i have the score for conventional stated just not the downpayment required. I have a real estate investment LLC, would it be possible to get an SBA loan just for the downpayment in order to get me started. any all tips welcome. thanks
admin answers:
The SBAdoes not make this kind of loans.
Richard asks…
How hard is it to get an SBA loan?
I am trying to start a new manufacturing company. I already have my product prototyped and have a strong business plan. I need $500k for initial marketing and production expenses. I have about $50k. If the SBA doesn’t pan out, what terms should I offer to investors? How much control of the company should I expect to sacrifice to investors?
Action business coach. Thanks for your help. I would be very interested in going over this in more detail. How can I contact you. my email is slozar1313. it is a yahoo email.
admin answers:
It’s not very hard. The thing is that there is usually a limit of around 120K. Once you get over that amount, it gets difficult.
As an investor, I would want a very detailed breakout of the 500K and what you plan to do with it. Many investors want to see you growing the business before investing. When it comes to control of the company, you have to breakdown how much you want from each person and how that will play into their ROI. From there you can determine the percentage. They key is that you want to always control the company. You must maintain 51% ownership.
I’d be happy to discuss this in more detail with you and would love to review your plan.
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Posted on December 16th, 2011 by admin
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