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Business Startup Loan – Negotiations, Thieves, and a Pot of Gold
Small business startup loan, lets keep this simple. If you are trying to get a larger loan (one over $100,000), then you will probably need collateral. You probably already knew that. But what you may not know is that for some smaller loans, you may be able to get by with several other alternativeshome equity and unsecured loans. You may even be able to negotiate your accounts receivable as a form of collateral if none of the other options work. The government provides several programs to help you as well.
USE THE MONEY IN YOUR BACKYARD
If you have no collateral and your lenders require it, you may be able to convince them to use your home equity as collateral. This should be exciting news for all of you homeowners that are starting businesses with less than sterling personal credit. However, this tactic will not work if you have already borrowed significantly against your home equity.
TAKE THE THIEF APPROACH (LIKE BANKS DO)
You may not understand why you need collateral for smaller small business startup loan amounts when you are already paying interest for borrowing the money. This is a perfectly good question. And the answer is simple: for small amounts, they dont. So either find a lender that provides unsecured small business startup loans or convince traditional lenders to give you money without requiring collateral. If you are looking for $15,000 or less and your preferred lender will not do the deal without collateral, make like a thief and run (to the next lender.) Just dont do anything illegal on your way out.
TAKE THE MONEY FROM YOUR CUSTOMERS POCKETS
Instead of trying to use assets you dont have, try using the cash that customers already owe you. Some banks let businesses use accounts receivable as a form of collateral instead of real estate or other assets, so if your banks primary objection is your lack of collateral, negotiate to see if they will accept accounts receivable. This may reduce the amount a lender feels comfortable providing, but any number is better than zero when you are desperate.
CALL YOUR UNCLE SAM
If all else fails, ask lenders if they can distribute SBA funding. The 7(a) Guaranty program can help allay their doubts for larger small business startup loans, and the Microloan program can help for start up loans. You must qualify for these programs, so do some research about the SBA loans to make sure you are eligible. Be aware that even if you qualify and are approved for an SBA loan, banks can still choose not to loan money to you.
Some states have grant programs to foster business growth. Consult your local chamber of commerce for information about those or use the internet for additional information.
DONT GIVE UP
If you are completely out of options, keep a positive attitude. Learn from your mistakes and do everything in your power to correct them as soon as possible. If you do this, the small business startup loan check will appear in your bank someday. In the meantime, maybe one of your family or friends will decide your business is great and provide some funding. You never where a pot of gold may be hidden!
Home Equity Loan Rates: Why Theyre So Damn Low
Whos the “girl” thats always there for you when things go sour for you with everyone else? The answer is not your life partner or your mother, but its your home shes been there for you no matter what happened, does a good job at keeping you safe and sound, as well as “comforting” you in times of trouble. Aside from acting as a place for you to crash and relax, what else can your house do for you? For those that dont know, you can use it to pull off a home equity loan. Whats so good about this type of loan anyway? Well for starters, home equity loan rates are considered to be one of the lowest there is today, because of the loan collateral youll have to put up to apply for one.
And you know what that is, dont you, old chum? Thats your house there is a “condition” that needs to be met, in order to harvest the cheap home equity loan rates, naturally. These rates will be dependent on the equity of your house, and the lending companies will take it as one of the biggest factors for the determination of your worthiness. Im sure that you understand what that means, if not, dont break a sweat; let me explain. Equity is in some sense the “value” of your house. Its computed by simple math, and the formula thats used here is: how much of the house youve paid for so far, minus the amount you havent paid for yet.
Its a simple formula, and yet there are many out there that dont fully understand the whole thing. For every simpleton and dim-witted friend of mine out there, Ill give an example, in hopes that you ALL understand it better. Here it is: you own a house, and so far you paid for $300,000 for it. But you still have a remainder of $100,000 to pay. To solve for the equity of your abode, you take $100,000 from $300,000, which gives you $200,000. Therefore, the equity of your house is 200 grand I hope this I perfectly clear to all readers.
This isnt the only determining factor when it comes down to knowing the home equity loan rates youll get, hell no. The knowledge you have on the entire matter and process on how all of this works will be your “best friend” when it comes to talking down the rates. In order to get the best rates possible, youll have to go to a number of different financial institutions dealing this type of service. Having good negotiation skills would also be an edge. Theres a lot to take into consideration before applying for this type of loan, like whether or not the value of your shack can get you approved for the loan in the first place.
Also, youd most definitely want to be sure whether or not youre actually capable of paying off the debt when you actually do get approved. This is one of the most important things you should think about. Having defaults with your payments can spell trouble for you. Ask other people that have taken out one for themselves you might find one that has lost his home because of his incapability to pay.