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Startup Funding - Home Based Business

    • 50 posts
    January 3, 2013 12:03 AM EST

    Here are some points to be considered, which can help you to get a small business loan:


    1. Don't quit your day job
    2. Offer something of value
    3. Keep meticulous records
    4. Plan on providing a plan
    5. Character counts
    6. Check and recheck your credit

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    Invoice Factoring

    • 37 posts
    August 15, 2007 9:30 AM EDT
    good luck. i would start with friends and family first. try to get them onboard - if you`re doing well and they see progress they may invest more into your business.

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    No Eternal Reward Will Forgive Us Now for Wasting the Dawn.

    • 12 posts
    August 14, 2007 10:13 AM EDT
    Good afternoon startupnation!

    It seems I have hit the wall before I have even had a chance to get started. I have "started" a business that is in retail sales of certain electronics. The west and east coasts are currently doing very well in this market yet there is no one to supply this product in the central US or south US. Being located in South Texas I have the prime ability to no only saturate this market but also sell to our neighbors in the south.

    So heres the issue, as most have stated before many people want x amount of time your business has been open, a corporate location, total gross over x amount of time.

    But being a startup home based business you do not have any of that information as you are a "startup business". It makes me laugh when I go to my bank asking for a starup loan and there first question was how long have you been in business? Just doesn`t make since to me but then again I am a mer mortal.

    Suggestions? I was thinking about just doing a personal loan but the interest rates are higher on them.

    Here are some of my stats so you all can get a better picture on my situation.

    LIC / Loan Amount: 15 - 30K (mainly for inventory)
    Company: DBA (sole proprietorship)
    Location: Home Based (regional sales and internet)

    Current Income: 65K
    Own our home

    Thanks!
    • 12 posts
    August 14, 2007 12:39 PM EDT

    You`ll need angel money or friends and family to make the first push.  Then once established you can go to banks.  What kind of electronics?  Seems to me this is a very competitive field.

     



    Yeah some electronics are. I am leaning towards the FTA receivers market. In Texas with all the rural areas around and the lack of knowledge of what is available FTA using satellites and receivers there is a huge market.

    What is angel money? Is that money that magically appears :)
    • 12 posts
    August 14, 2007 6:37 PM EDT

    Based upon the info you`ve supplied, there are several possible approaches. I`m assuming that you have little (or no) funds to invest in getting started - but I would strongly recommend that you consider setting up the business as a separate legal entity. I`d also suggest a basic business plan which includes:

    • some research that confirms the existence of a market
    • a marketing plan (with budget)
    • The essential financial projections (which indicate that this endeavor can produce profits)

    Given the above, capital sources for inventory include:

    • your suppliers
    • your customers
    • lenders who loan on inventory
    • An government guaranteed loan (you may have more than one option)
    • A home equity loan

    This is just for starters. However, in all the above situations (except the home equity loan) the lender will want to understand how you are going to generate the money (profits) to repay them. So the basic business plan is pretty essential.

     



    This is some great advice! I am currently going through the "Business Plan Pro Premier" software and creating a full business plan. On the company as a separate entity, I am not sure as to why a DBA or (sole proprietorship) would not work in my situation. With minimal overhead and expected sales not to reach over 100,000.00 in the first year I thought it best to start off as a DBA.

    Either way the company would ride on my personal credit as the company itself has no history of sales or longevity.
    • 2 posts
    December 1, 2007 10:37 AM EST
    The Better Business Builders provides $5K, $10K, $15K, $20K, $25K, $35K or $50K to start-up or existing businesses. These loans are backed by the U.S. Small Business Administration (SBA) through Innovative Bank`s Community Express (85% SBA Guaranty) and Express Loan (50% SBA Guaranty) Initiatives.  The loan program does not require a business plan, collateral, credit score or financials.
     
    The Better Business Builders is a Small Business Administration (SBA) licensed technical provider and is approved to administer this loan program. Once the loan is approved The Better Business Builders provides 1 year free technical assistance which provides you with information and help to grow your business.
     
    You can find out more information about this loan program at http://betterbizbuilders.com/content/view/22/35/
     
    They are a reputable business and I have received a loan for my startup business through this loan program.
     
    Best wishes in your business.
     
    Sincerely,
     
    Janice Gentles-Jones
    JGJ Consulting, Owner

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    Janice Gentles-Jones
    Online Success Queen
    www.onlinesuccessqueen.com

    • 79 posts
    August 15, 2007 4:40 AM EDT

    I`d actually argue the opposite. My advice is almost always for start-ups to begin as sole proprietorships. As you`ve already seen, you`re going to have to sign personally for the loan as it is, so forming an LLC or corp isn`t going to help you any there.

    In my opinion the question is whether or not your particular business is likely to create any liability issues (from defective products for instance?), and would those be covered more cost effectively with an insurance policy.

    Best of luck to you whichever way you decide to go!

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    Accounting Made Simple | Sole Proprietor Tax Guide

    • 10 posts
    April 11, 2012 12:32 AM EDT

    People looking to start a home-based business sometimes look to franchises. Franchises are available from no investment to hundreds of thousands of dollars and include vending, specialty retail and glass repair, among others.

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    Thanks
    Ricky Mik
    All about Home Mortgage

    • 926 posts
    August 14, 2007 1:20 PM EDT

    Based upon the info you`ve supplied, there are several possible approaches. I`m assuming that you have little (or no) funds to invest in getting started - but I would strongly recommend that you consider setting up the business as a separate legal entity. I`d also suggest a basic business plan which includes:

    • some research that confirms the existence of a market
    • a marketing plan (with budget)
    • The essential financial projections (which indicate that this endeavor can produce profits)

    Given the above, capital sources for inventory include:

    • your suppliers
    • your customers
    • lenders who loan on inventory
    • An government guaranteed loan (you may have more than one option)
    • A home equity loan

    This is just for starters. However, in all the above situations (except the home equity loan) the lender will want to understand how you are going to generate the money (profits) to repay them. So the basic business plan is pretty essential.

     

    ---
    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


    • 926 posts
    August 14, 2007 8:45 PM EDT

    I`m glad you found it useful.

    There are several reasons to set up a separate business entity including -it`s really not the best idea to leave all of your personal assets open to any business liability.

     

    robertj2007-8-15 1:46:8

    ---
    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


    • 926 posts
    December 5, 2007 6:39 AM EST

    If there is enough equity in your home, you might be able to get a lender to refinance.

    Have you checked out Top-Line Business Consulting system?

    What "benefits" do you expect to get from them?

    ---
    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


    • 154 posts
    August 14, 2007 12:22 PM EDT

    You`ll need angel money or friends and family to make the first push.  Then once established you can go to banks.  What kind of electronics?  Seems to me this is a very competitive field.

     

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    Travis Tschepen
    Hibachi Bros. LLC

    --My goal in life is to be as good of a person my dog already thinks I am.--

    • 154 posts
    August 15, 2007 5:30 AM EDT
    Angel money is money form wealthy people(s) who like your idea and hopefully have some experience in what you are trying to do.  Mostly a passive role.

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    Travis Tschepen
    Hibachi Bros. LLC

    --My goal in life is to be as good of a person my dog already thinks I am.--

    • 12 posts
    August 26, 2007 7:50 AM EDT
    I truly can sympathize with you.  When I was beating pavement trying to get my own personal home-based business off the ground and establish it in a professional physical location, I almost lost hope.  I kept hearing the same thing over and over again at every bank I tried.

    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.

    However, I discovered 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 even 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. 
    • 12 posts
    December 3, 2007 2:50 PM EST
    When applying for a business loan do they look at your personal credit vs. starting a business?

    That would depend on the lending institution, in my experience.  There are some financial institutions that cater to entrepreneurs with no collateral and a low credit score.  However, your credit record must be healthy, meaning no discrepancies or bankruptcies.
    • 16 posts
    September 1, 2007 11:19 PM EDT
    Sidneywash,
    Thanks for the resource.

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    4Corners Web Services - Your Partner for Online Success!

    Looking for capital to start or expand your business?

    • 1 posts
    December 4, 2007 10:14 PM EST
    I am a Veteran.  I am in foreclosure.  I have operated an undercapitalized small business for approximately 10 + years with limited success.  My business provides marketing, fundraising and management consulting services to non-profit organizations.
     
    IDEA - I want to buy into the Top-Line Business Consulting system, start a new "Home Based" business with their system, utilizing my wifes credit to obtain a SBA Patriot Express Loan large enough to pay off either my total mortgage or the arrearage, enough for the Top-Line Association/Training fee and enough for all other operational expenses for this new "Home-Based" Business where I would use the home as collateral and the business plan to show projected cash flow to service the loan.  Does this make sense???
    • 2 posts
    December 3, 2007 1:56 PM EST
    When applying for a business loan do they look at your personal credit vs. starting a business?