Forums: Discussions for entrepreneurs and small business.

Hi,

I would like to change my home-based business, because I have outgrown the space. 

Right now, I need to locate a physical location for my business and acquire the proper equipment and safety gear, to conduct my classes.

My problem is that I have no cash to pursue my business venture. 

What I am looking for is a small business start up loan, preferably an unsecured business loan. 

I’ve been having problems getting a loan, because I don’t have enough collateral.

Can anyone offer me some guidance, advice, or even a reliable resource that will cater to a person in my situation?

One of the biggest hurdles I faced as I tried to make my business a reality was how to convince a lending institution that my business would make enough money to repay the requested loan amount.  The bottom line is that I found out, in each attempt I made to acquire a small business loan, that collateral is one of the biggest setbacks most entrepreneurs and small business owner have to face and overcome. 

I found it very difficult to convince any bank that my home-based business could be a tremendous success, if I could acquire the resources I so desperately needed to get things on stream.  The fact remained that my efforts were fruitless.

 I discover an online lending resource, www.thesnaploan.com.  Based on my experience with this site, I was able to successfully acquire a start up loan for $100,000.  What’s event better is that I was able to apply online, and I got my approval pretty fast, about two weeks.  It sounds like this website could be right up your alley. 

 

roblue,

Generally, lenders are interested in (1) the borrowers ability to repay the loan and (2) what assets exist to "encourage" the borrower to repay.

Whether your business can get an loan depends on several factors including:

1. How long you have been in business
2. How much you want to borrow

Plus the above ability to repay (business profits).

 

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Business Growth Masters, LLC -
Capital Catalysts for Entrepreneurs
Home of the Scalable Business Plan and QuikStart Capital Programs
http://www.bizgrowthmasters.com
info@bizgrowthmasters.com

RobBlue,

RobertJ is exactly right. Also a decent credit score helps. If you are looking for an advisor or mentor to help you figure these things out a great place is advisorgarage.com. I think building a relationship with a bank is important and can help you grow your business in the long term. Have you maybe set up a meeting or a lunch with someone at your bank. A local based bank may be best for you becuase they are invested in the community. There are tons of "home based" business that make millions a year, so being home based should not stop you. Do you own any equipment? Vechiles?Home? ETC? This helps. Have you gone to your local sba and asked for guidance to make sure you are fully prepared when you ask for a loan? They will tell you what you have and what you need still to do, and it will give you a better chance. What amount are you looking for? What Must you have to get this safety equipment? Borrow only what you must and grow from there and then is you need to expand again you will hopefully of built more value in your business. BTW, can you prove a client basis of cash flow for 1 year, 2 or three? This also helps when banks are considering you. Try and lock down commitments from your current clients.

Erin

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Our Goal Is Your Success!
Founder Girls with Goals

After you got the loan from the bank, where ever you decide to lease a space, they are going to be looking for liquidy and assets too. Your best bet is to continue working out of your home and get more organized. You could find yourself doing the same amount of business, but with extra expenses. This is a red flag for lenders.

Thank you for the suggestion.  I will take some time to look into it.

You are absolutely correct.  I am finding that each lending institution I approach those two factors seem to be my biggest obstacles preventing from acquiring an approved small business loan. 

Your point about my business` ability to repay is another tricky issue I cannot seem to get around.  The reason for this is that my business is stagnant because it needs more space to provide for expansion.

However, in order for my business` bottom line to improve, I need to be able to acquire the space so that the expansion can occur and hence allow my business income to grow.  I believe this projected income will allow me to cover the loan payment to the lending institution.

In reality, I find that convincing banks or lending institutions is next to impossible.  It`s almost as if they don`t believe in making dreams a reality any more.

Hi Erin

Thanks for taking the time out to respond to my question.  I have included my assets in my business plan.  In addition, my established client base is not enough to cover the projected loan amount.  I think in my situation, the lending institutions I approach are not as confident as I am that my business will expand as I project, once I am granted to venue to offer a larger space for my services.  I will continue to search out local community banks and see what progress I make in that sector of the industry.

Thanks for the suggestion.  Right now, I have no choice but to continue conducting my home based business.  However, in its current state, I am just breaking even.  However, I am receiving a lot of interest from my market.  I simply don`t have the space I need to accommodate any new clients, which means I am limiting my potential income because of my current limited capacity.

However, I am still in research mode, and  I am not quite ready to give up this dream yet.

Thank you again for your suggestion.

Think about ways you can demonstrate or convince a lender that your income is "limited" because of capacity constraints and how this will change with a new facility. 

-------------------------

Business Growth Masters, LLC -
Capital Catalysts for Entrepreneurs
Home of the Scalable Business Plan and QuikStart Capital Programs
http://www.bizgrowthmasters.com
info@bizgrowthmasters.com