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    2 Replies Latest reply on Oct 23, 2008 11:05 AM by Lighthouse24

    Financing a Small Business

    Scrappy Newbie
      I need money to expand my business and for marketing and need to know the best way for a small business to go about this? I started my business a Home Improvement (Interior Remodeling) Company in 2005 part-time and this year started working for myself full-time. My Company is set-up as an LLC and I sub-contract most of my work. I have been working stricly by word of mouth and am now getting too busy to manage, work on jobs, sell and run day to day operations alone. I want to hire someone but want to make sure I have some money on reserve to ensure payroll if work goes up and down during the winter and with the economy, I need not say more. I also have some marketing plans. I'm probably looking at needing $20-$30k.

      I have excellent credit and have been working on building credit for my business. Any suggestions on the best way to build business credit fast?
        • Re: Financing a Small Business
          squizzy Newbie
          Unless you have two years of financials and show sustaining value there isn't a bank rightnow that will loan you a "business loan". If your credit score is above 700 (considered very good), then some banks and credit card companies will provide you a revolving account or a credit card account that you can use as a revolving account. I have just found out that BoA has stopped their unsecured loan program which lended at rates between 9.99 and 14.99 percent depending on your credit score. I have a Capital One account that seems to be the most flexible. I suggest going to talk to one of their local offices and explain what you are trying to do. They and all other banks will require you to borrow under your own name and not under the LLC, because they want safety in their lending and unsecured lending now requires personal responsibility to pay back the loan if the company defaults. The SBA is also a good place to get interest in lending you money, but keep in mind, everytime someone looks at your credit score for a loan or credit card your credit score takes a hit and goes down - this represents the potential risk of a person getting their credit exposuie too high and not having any offset in the score for when you get over extended (like our wonderful banks with Credit Default Swaps) with credit cards without someone raising a red flag.
          • Re: Financing a Small Business
            Lighthouse24 Ranger

            I hope you'll excuse me for butting in to your business a little here, but does the person you want to hire possess a rare or hard-to-find skill set or qualifications? If so, then a decision to hire him (or her), given the business conditions you noted, should ensure that you DON'T have a drop in revenue. In other words, it doesn't make business sense to hire new talent and keep them on payroll while revenues are declining -- it only makes sense to hire someone right now if he will help keep or drive your revenues up (in which case, you won't need the loan or credit line to pay him). If the person you're considering wouldn't bring anything special to the table that would virtually guarantee the growth or stability of your business, I would consider hiring the person on a project/job basis right now, not as a full-time employee. Again, I apologize for offering unsolicited advice, but I hope it provides another pespective that helps. Welcome to the community and best wishes.