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    6 Replies Latest reply on Feb 22, 2009 9:46 AM by bmt2008

    Need Working Capital

    alove952 Newbie

      I have a business that opened 2/08 and I am now looking for additional capital.

      Right now I have an SBA with a balance of 170k (7 year fixed at 8.569) and 130k in other revolving debt. This debt occured because I had construction delays, underestimated my expenses and there was a family matter than needed 50k.

      My spouse is employed outside of the business and makes 200k a year, we have 2 other franchise territories that I am attempting to sell but I would like to find a lender that would use those as potential collateral for a working capital loan. I am willing to consolidate debt and would even be able to add another 20k in a secured CD for colleteral. With fairly modest numbers I am projecting a 60k loss for 2009 (gross sales 260k).

      Is anyone familar with an instituion that be able to fund such a loan? I dont want to hear about Merchant Advance companies, the amount they offer with my volume of credit card sales isnt worth it, plus the cost of that money over such a short period of time isnt worth it (yet).

      Any info will be greatly appreciated.
        • Re: Need Working Capital
          LUCKIEST Guide
          Need Working Capital, Welcome Aaron

          You Need Working Capital. I need to see a Business and Marketing Plan.

          Sources of capital, investors and lenders will not consider providing funds to you without a plan.

          Talk to me, LUCKIEST
          • Re: Need Working Capital
            LUCKIEST Guide
            Need Working Capital, Welcome Aaron
            • Re: Need Working Capital
              bmt2008 Adventurer
              Not sure there are many options for you in this market. You should already have a relationship with your SBA lender. Are they not willing to help you through consolidation or restructure? Further, banks and other financial institutions don't like the word "consolidation." It just means trouble and are very hard to get approved.

              On our website, we may have a few sources that could help you. Under our commercial mortgages link - you can search for financial companies that could help you - just search for what you are looking for - e.g. re-finance or consolidation. Under our business loans & lines of credit link - you can search for some companies that could help with the working capital side.

              The reason I suggest doing both is this: If you were to refinance or purchase a piece of property - your LTVs would be in the 70% to 80% range - meaning you would only need 20% to 30% equity. But, the minute you say 'cash out' for working capital - your LTVs (Loan-to-value) drop to 55% to 65% - meaning you need a whole lot of equity in the property.

              But, think about refinancing the properties under one note - which could help minimize your anticipated cash flow losses. Then, look for a business or personal loan (could even use only your husband's income and credit for a personal loan) to get the working capital you need.

              While this is a great time to start a business (e.g. low costs of entry and low operating expenses - more power for the entrepreneur) it is a very hard market to get financing.

              Good luck,

              Business Money Today
              www.businessmoneytoday.com
                • Re: Need Working Capital
                  alove952 Newbie
                  Thanks for the reply. I dont need to consolidate, I am mention that as just another option to a potential lender. I really just need the extra capital and I am willing to do what it takes to get the funds. I will check out your website.

                  A big problem for me is that my business is a non-inventory, non-equipment based business so there isnt much to take a security interest in.
                • Re: Need Working Capital
                  LUCKIEST Guide
                  Need Working Capital, Welcome Aaron