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    5 Replies Latest reply on Aug 4, 2008 1:15 PM by Lighthouse24

    What are my options?

    TileMike Newbie
      Hello everyone,

      I am trying to restructure the financial position of my company and I need some advice. My company is a service-disabled, veteran-owned small business flooring subcontractor for general contractors working on federal construction projects. I have four employees, one admin assistant, one estimator and two in "sales" or project management. Our monthly overhead costs are around $4,000.00 with out payroll or interest.


      The business has been running for just short of two years. In the first year we were in business for only two months and had no income. In the following 12 months our total income was just south of $40,000.00 but so far this year our gross sales are close to $900,000.00 and we expect to gross close to $1.75mil by the end of the year.


      I started the business using my personal credit which has been a combination of credit cards, a line of credit and some equity out of my home along with one credit card in the company's name. When is came to the purchase of material for the projects, I used the credit cards and cash advances in the beginning to establish relationships with the vendors. This has led to a number of Net 30 accounts or we are able to negotiate some type of terms based on the situation.


      My goal is two fold. First, I would like to try and move the majority of the debt to the company to start establishing some history. All of the bills regardless of what type of an account has been paid with a company check. The second half of my goal would be to have capitol in the bank to reinforce the company's ability to bond projects. The larger the bond capability the more projects we can pursue and the more money we can make.


      I'm not too sure if I have a case for the traditional approach of refinancing or if I should focus my pursuits on a more creative solution? Thanks for taking the time to read my post.
        • Re: What are my options?
          JVCruz Adventurer
          I know you'll hear this alot on here; however, do you have an accountant and a lawyer? They would be better suited to give you advice on moving the debt to the company.

          Also, how is your company structured? Corp, LLC, etc.? I know you already have an EIN since you have employees.
          • Re: What are my options?
            Lighthouse24 Ranger
            Both goals are good for you, good for the growth and future of your business, and therefore good for your bank. I would suggest making an appointment with your bank officer at the bank where your business account is located. Bring your business history and projections to the meeting and lay out exactly what you're trying to do. Your banker should be able to advise you on how to best make that happen. If not, find a different bank.

            This really is the kind of expertise and service that a good commercial banker should be able to provide (free -- well, sort of, they're getting to use your money). Also, having your banker involved now will really help you down the road when you come to a tough period or a sudden opportunity for unexpected growth -- because he/she will know you, your business, and your plan -- and be in a position to make things happen fast for you when you really need it.

            Congratulations on your success so far, and best wishes for the future!
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