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    3 Replies Latest reply on Oct 11, 2007 8:57 PM by Marks Funding

    Need help with deciding on funding options!

    JavaJoe Wayfarer
      There are so many funding/cash options out there that it can get very confusing and overwhelming. I plan on using my savings to start my business, but will probably need some help on the order of $50,000 during the course of the year. Given this amount what are some of my options? What's the difference between a business loan vs. line of credit vs. simply maxing out a personal or business credit card?
        • Re: Need help with deciding on funding options!
          LUCKIEST Guide
          Java Joe, Those are great questions and I will try to answer them (with the limited info that you supplied).
          What kind of business?? and How soon??
          SCORE suggests you write a BUSINESS PLAN, explaining your plans to develop a successful business.
          Do you have a line of credit NOW?? A line of credit suggests that you own real estate.
          A business loan is a fixed amount monthly for 24 to 60 months.
          A line of credit can be used as NEEDED and paid back in different amounts.
          Maxing out a credit card is the last option as the interest rates are highest and then what after you
          used up all your credit??
          Good luck, LUCKIEST
          • Re: Need help with deciding on funding options!
            SCORE108 Wayfarer
            Here are some thoughts on your options. How much of savings are you using to start the business? If this amount is substantial and your business will show a profit before you will need to borrow the $50,000 you should have a good chance of getting a bank loan. You should first try to get a bank that will help you apply for a SBA guaranteed loan. In this arrangement the bank loans you the money but the SBA guarantees 80% of the loan. You will need a completed business plan as part of the application process. I would not recommend using a credit card to finance the business needs. Credit card financing of a business is a last resort and if your business is in this situation it will never be able to pay the excessive interest rates charged on a credit card and you will probably end up further in debt.
              • Re: Need help with deciding on funding options!
                Marks Funding Newbie
                Being inthe industry I can tell you that there are many alternative funding sources available. Most work through brokers though kind of like mortgages. A broker gets you the loan and then the paper is sold an resold on the market. There are collateral based loans, loans with guarantors pledging to pay the debt if your business does not, factoring - which is very efficient for increased cash flow, and if you have been in business for a while you can use credit card cash advances which are nice cuz they do not affect your balance sheet. These are just some of the options. I would be happy to share the details of how these work privately as space is small here. you may email me @ if you or anyone else reading this wants to lean more.