Hi to all and thanks for all the wisdom shared here. First time post, long time lurker.
Here is my dilemma - probably not all that unique:
I have a terrific start-up retail concept, and have devoted the better part of the past eighteen months to developing my business plan - a difficult but very rewarding process, to say the least.
This summer, I made three trips to the local SCORE office and now feel as ready as I`ll ever be to aggressively pursue the majority of the start-up funding. If I want to avoid being under-capitalized, I would need about $200K. (Actually, I`d be more comfortable with $300K, but I can make it work for less.)
My FICO is over 800, and I am fortunate to have a lucrative and flexible day job that I will hang onto as long as possible.
So what`s the problem, you ask?
Well, in a perfect world, I`d have my owner`s injection of $70K sitting in the bank earning interest, but I just went through a divorce and wound up paying off his debts and giving him a settlement. He more or less held me hostage financially this past year because I outearn him by quite a bit -- so I "bought" my freedom to get it over with and avoid future support and legal costs.
So . . . I`m cash poor, but I have perfect credit, strong monthly income and very low installment debt (car and house only) .
I know that I need to move on my idea NOW -- the perfect location is up for sale, the concept is enthusiastically received by lots of potential customers -- but I don`t have any of my own capital left to work with. I used the Circle Lending guidelines to draft a possible loan schedule to borrow the seed money from my father, only to discover that he lost about $125K to his wife`s cousin a few years back and is understandably gun-shy - even with his own daughter.
I could sell my house, but I`d rather not put it on the market until the spring. I only bought it a year ago and don`t have any real equity built up yet, and in a shaky market I don`t want to take a loss if I can avoid it.
My question is this - more or less:
Is there a way to secure SBA or other start-up loans using one`s credit and ongoing/future income as "collateral"?
Or should I try to pull this off by truly bootstrapping it and running up credit card debt and the like?
Any thoughts or insights would be greatly appreciated. It seems that everywhere I look, someone opens another store in this area and it`s driving me nuts knowing that my store would not only thrive, but bring a lot to the community.
I`m more than willing to take risks, but don`t want to do anything foolish if a better alternative exists.
"Do something every day that scares you." - Eleanor Roosevelt