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    2 Replies Latest reply on Aug 11, 2008 9:28 AM by Milleisen

    Looking for financing for 1 year old cleaning company

    JVazquez Newbie
      I have made it through my first year of business. By December of this year I will have made over $150,000 (this is a conservative estimate). My business is located in a greater metro city area. I purchased a professional maid service franchise. I have spent close to $30,000 in marketing to get the phones to ring. I have advertised on the Internet, direct mail (post cards and coupons), local papers, inserts, door hangers, yellow pages, networked with local businesses, and a few other advertising venues. I have approximately 70 regular residential customers, a few offices and I have a couple hundred occasional customers. My weekly revenue is over $3,000; I had hope to be at $5,000 in revenue by now but the summer months were very unkind to all of the cleaning companies in the area and I believe in the industry as a whole. Competition in my area is stiff and I worried about posting too much information in this forum, hence, why I do not mentioned the city.

      I want to branch out into commercial cleaning (offices) to offset the recession and its impact on residential services but I need additional working capital to get me to the next level. The couple of banks I have spoken to request collateral such as my home which my wife and I are not willing to put up as collateral. I have put in over $100,000 of my own money to start up the business. My accountant, fellow business franchise owners as well as the home office feel I am about to break out this next quarter. They tell me to hang in there which is easy for them to say. I have weathered so far a weak economy and the slowest months for my type of business (summer) without loosing too many clients. Actually, I have broken even in customer turn over between the ones that cancelled for financial reaons and the new customers I gained in this period.

      But I need working capital -- approximately $30,000 but have not been able to raise it as of yet. Credit card companies can be expensive especially if I use it for cash advances. Does anyone have any suggestions on how I can raise working capital for a business that is only one year old but with great potential?
        • Re: Looking for financing for 1 year old cleaning company
          Milleisen Scout

          If you own your home, have you considered a home equity loan? They are tax-deductible in many cases and the rates and terms are almost always better than for a business loan. I know you said you don't want to use your home as collateral, but banks are leery of small business startups due to the high rate of failure. Another alternative could be peer-to-peer lending website like prosper.com. You can create a listing and people will bid on your loan based your credit, DTI etc.

          Be careful of so-called unsecured lending websites. They charge outrageous fees like 10-20% of the loan amount.
          • Re: Looking for financing for 1 year old cleaning company
            LUCKIEST Guide
            Looking for financing for 1 year old cleaning company, Welcome

            The first year is always the hardest. (and yes the economy is weak). Hopefully as you say,
            you will break out in this current quarter. I would like to talk to you.
            You can reach me at pdeig@juno.com and please include a phone number.

            Have you developed a Business and Marketing Plan that I can read. a Bus Plan is one of the
            first items an investor or lender wants to see.

            Do you know about SCORE?? SCORE is FREE, LUCKIEST