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    3 Replies Latest reply on Dec 8, 2009 5:33 AM by marchse

    Small business loan with shady credit???

    bmullen Newbie
      I have an opportunity to purchase a business for a very good value.
      The potential for the business is huge and we have a good group of people to contribute to the business in various ways.
      My concern is that I am paying personal debt and working towards getting debt free. In the meantime, I am considering a SBL for this business but my personal credit is stretched, so I am not sure what my options are.
      Can anyone offer any thoughts or experiences?

        • Re: Small business loan with shady credit???
          envisionary Wayfarer

          Believe it or not, you do have some options. A lot of business acquisitions are structured where you go in with the existing owner at an agreed upon percentage ownership (i.e. 49% owner), work with that person using your portion of the profits to cover your portion of the business expenditures and thereby creating some business equity. Later on, you can leverage that equity toward a loan. This works best in a small business scenario.

          Another option is to find C-Credit financing. The economy finds plenty of people in the same situation as yourself, but business can't come to a screeching halt so some companies are adapting their lending to help. C-Credit financing can work with you if you have poor credit and even a past bankruptcy. The sticking point here is that you will need collateral for the loan. Fortunately, you can use all manner of things as collateral, you'll just need to find out what types a particular lender will accept. And remember that the collateral, or security deposit, should be refundable. I don't want you to get scammed and there are plenty of financial lending scams out there.

          I'm not sure about the current SBA guidelines, but you will almost certainly need some hefty collateral depending on the amount that you are seeking.

          Good luck and hope this helps!
          • Re: Small business loan with shady credit???
            phanio Pioneer

            As stated, there are many options. First, will the current owner hold the note to the business? If so, you might work a deal that you put down a small percentage, say 10% and let the owner carry the rest of the note. If the owner beleives in the business - this may work for both of you. This will also allow you to raise less money.

            Other financing options really depend on the amount you are seeking and the use of funds. New business owners are hard to finance the traditional way (i.e. bank debt, SBA loans, etc). But, there are many creative ways to overcome this. However, each depends on the amount you are seeking and the use of the funds. If you could provide that information, might be able to point you in the right direction. I realize that you are purchasing a business and that is your main use of funds, but, is it just the business name and its products/services or does it include property, assets, etc?

            Business Money Today
            • Re: Small business loan with shady credit???
              marchse Newbie
              I would suggest you to make clear all your debts...
              Mean while have a second thought of the business, becoz if you are sure that the credit what you make is not a good one better leave that.

              Orange county investment criteria