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    0 Replies Latest reply on Feb 23, 2012 2:49 PM by jeanbay

    Can a Micro Loan save my business, or am I too far gone?

    jeanbay Newbie

      First, apologies in advance if this is too long and ramble-y -- I've been searching online for solutions to my current quagmire and found this forum with some similar questions/concerns to my situation, but I think I've made such a snowball mess I may be in too much trouble to do anything about it.


      I've been working as a freelance designer for the past 5 years, after being brutally laid off from a PR job.  The first year was awful; I ran my finances into the ground and had a lot of credit cards get charged off for non payment.  The subsequent years found my business growing at a healthy rate and I did what I could where I could to fix those problems, but there are obviously still marks against me on my credit report that only 7 years can fix.


      As my business grew, I recolated to a new state and rented a large enough house to split the space between my living and working environment. It was perfect: location, space, opportunities to meet and host new neighborhood clients, etc.  A year after occupancy, the owner of the house informed me of their intent to put the house on the market.  I checked my credit scores and spoke with lenders only to be told that my credit scores simply weren't good enough to qualify for a loan.


      So I entered into a lease-purchase agreement with the owners of the house wherein I put a substantial amount of money down toward the purchase of the house ($30k, non-refundable) plus an additional $1k per month to be credited toward the purchase of the property as the agreement extended my tenancy for another year.  Adding in the intial deposit on the property as well, I've already paid for nearly $50k on the established purchase price of $220k.  During the year, my goal was simple: work with credit repair companies, establish new/good credit, and keep my nose clean.


      My agreement is set to expire on April 1 and I just found out that my credit scores still do not qualify me for a loan.  No further extensions will be made.


      I have been making upwards of $80k year for the past 3 years.  My client base and billables are totally stable, but because I'm all-in (and quickly losing) with this house deal, I have no cash reserves on hand for any sort of fix or move of any kind.  Ideally, I would like to find a loan situation that's beneficial to both the lender and myself wherein I don't have to move or uproot/damage my business (because of the nature of my work, my clients expect my availability at all times; shuttering the business for a few weeks for any reason would be the same as shouting "forget about me, go find someone else!" -- my client list would vanish).


      I work alone, and while I do have an LLC that I filed for last year at my father's insistence, there has been no activity with that entity as all payments for my work continue to filter through my personal account.  This was surely a poor decision on my part and I see now that I should have also focused on building the business' financial profile over the past year as well.  My "company" and its history is basically me and mine.  But I do have the paperwork available for that LLC and could establish a bank account for it if necessary.


      The trouble is that I have a month to figure this out and am admittedly an idiot with this stuff.  Any and all help/advice is hugely appreciated, I'm really freaking out.  (And yes, I know, this is all on me and I put the handcuffs on myself; I've made my peace with that and will deal with the consequences as they fall, but can't be expected to not go down fighting, you know?)