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    4 Replies Latest reply on Feb 26, 2010 6:47 PM by UncleLeon

    Which is better for starting a business?

    jasmin03 Newbie
      Which do you think is better to start a business? Equipment leasing or get a bank business loan?
        • Re: Which is better for starting a business?
          LUCKIEST Guide
          Which is better for starting a business??

          Equipment leasing
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          • Re: Which is better for starting a business?
            alytus Scout
            you might need bolth, but my answer would be, make a solid buisness plan, and apply for a bank loan, mabey a SBA loan. your welcome
            • Re: Which is better for starting a business?
              UncleLeon Scout
              More information is needed to make a sound judgement. But, generally, here are some considerations:

              You say you're STARTING a business. Therefore you won't be able to borrow money against the business. If you have other (readily negotiable) assets, you may qualify to borrow against them.

              If you borrow and buy, outright; you will end up paying less for the business equipment you buy. However, this will show as an obligation on your credit report.

              If you lease, you will end up paying more for the business equipment. At the end of the lease period, if you want to keep the equipment, you will have to "buy" it from the leasing company (usually about 10 % of origional price). BUT, the lease amount will not show on your credit report as a loan obligation.

              Here's another consideration:

              If you have SOME money and buy a VIABLE operating business, with a good cash flow; you have all equipment in place and operating. You have ready-made profits. And (assuming that the business has good records, good cash flow, and has been in business for 2 or more years (has filed two tax returns) you may be able to get an SBA guaranteed loan for around 70% of the value of the business (+ additional funds to begin operations), Normally, the seller must be willing to carry a second position loan of 10-15% of the purchase price.

              The final cash source break-down looks like this:

              Funds you supply: 20%
              Funds seller supplies (as a loan): 10%
              SBA guaranteed funds 70%

              NOTE: SBA guaranteed loans are funded by a bank. For most likely approval, look for a SBA preferred bank. You can get a list of local SBA preferred banks through your local SBA office.
              • Re: Which is better for starting a business?
                alytus Scout

                you should make a buisness plan, then apply for a loan.