Any Small Business Owners Out There? Advice Appreciated

[Heroesandvillains]

Re: Any Small Business Owners Out There? Advice Appreciated

Oh, I didn't understand from your earlier post that the loan you were talking about still had that much on it. I thought you were just going in to get $3,000 without anything else other than that Kay Jewlers thing out there.

Sorry my OP wasn't clear. I briefly mentioned it in my second post. Sorry.

My Kays balance is around $500, but I'd pay that tomorrow if needed.

The other is an issue, though. My biggest hang up. If that were wiped out this would go through very fast.

I may have misjudged my ability to pull this off. I may even need to go back to the negotiating table with my boss or walk away all together.

[Heroesandvillains]

Re: Any Small Business Owners Out There? Advice Appreciated

Definitely talk to other banks, but it's a safety net. They have 2 ways to get their money back if your payments to fall through. I doubt all would require it, but it would not surprise me if other banks want collateral in addition to a co-signer.

Credit unions are usually pretty good at working with people, but a major bank may be able to help. The problem you have is that you are getting a personal loan. Completely understandable because of the convenience. They are just going to be pickier than if it was a business loan where there is the potential gain from an investment. Can't hurt to talk to another bank about it and maybe they can help out or offer another approach.

But I can't even apply for a business loan without a Federal ID number, a business ID, and a business bank account.

Filing for those seems silly just to sit at a loaners table and possibly be rejected. Not to mention needing all of the businesses YTD's from my boss which would be a real headache for him right now as he owns several businesses (obviously it would be easier early next year when he prepares his taxes).

[Heroesandvillains]

Re: Any Small Business Owners Out There? Advice Appreciated

Just want to add that I do feel like meeting with another bank to weigh out my options is a good idea.

I hope my last post didn't sound idiotic. Getting the YTD's would be a good thing in general. It may just take longer than we'd hoped for.

[FlyingFinn]

Re: Any Small Business Owners Out There? Advice Appreciated

For one, taking out a personal loan for a credit score seems like a bad move. Could easily have been accomplished with a credit card instead... As a rule of thumb, you should have at least 30% of your yearly salary in the bank at all times. So if you don't have $3000 in the bank maybe now isn't the best time for more debt. Besides, it seems weird that your boss would sell a location that supposedly makes $50,000 a year for $10,000. Sounds too good to be true to me...

[kehlis]

Any Small Business Owners Out There? Advice Appreciated

But I can't even apply for a business loan without a Federal ID number, a business ID, and a business bank account.

Why not?

I'm in business banking for PNC and we have many business customers with loans booked solely with their social as the guarantor.

[Trevytrev11]

Re: Any Small Business Owners Out There? Advice Appreciated

I get blank checks in the mail from my credit card companies at least three or four times a month. Usually with 0% interest for the next 15-18 monhts.

I used it for the first time this year to purchase a water softener as an alternative to pulling it out of savings, putting on my card (which has an interest rate) or financing it through the water softener company.

I don't recall the exact terms, but I beleive you can use the check to borrow up to your available credit limit if needed. As I said, it was 0% interest for like 15 months and if you do not happen to pay it off in full, you are not penalized with interest on the entire transaction, you only pay on the remaining balance.

It was a win-win situation for us and definitely a solid alternative to applying for an actual load when we are talking about pretty small amount of money to borrow.

[Redacted01]

Re: Any Small Business Owners Out There? Advice Appreciated

For one, taking out a personal loan for a credit score seems like a bad move. Could easily have been accomplished with a credit card instead... As a rule of thumb, you should have at least 30% of your yearly salary in the bank at all times. So if you don't have $3000 in the bank maybe now isn't the best time for more debt. Besides, it seems weird that your boss would sell a location that supposedly makes $50,000 a year for $10,000. Sounds too good to be true to me...

That's not the best way to go about it. You should instead have at least enough money in the bank to cover your expenses for 6 months (and longer with how long it can take getting a good job these days). If you live beyond your means monthly, or work for peanuts, 30% won't get you far. Or it could be more than enough. Either way, it is much safer to be able to pay your bills for X months.

[Trevytrev11]

Re: Any Small Business Owners Out There? Advice Appreciated

That's not the best way to go about it. You should instead have at least enough money in the bank to cover your expenses for 6 months (and longer with how long it can take getting a good job these days). If you live beyond your means monthly, or work for peanuts, 30% won't get you far. Or it could be more than enough. Either way, it is much safer to be able to pay your bills for X months.

I thought about this last night and was going to post the same. A person who makes $120K a year with a modest house and other modest bills won't need to save as high of a % of their salary as someone who makes $80K with the same bills. Based on their monthly expenses, they should both have a similar reserve in terms of dollars.

I'm assuming on average for the average person/family, this works out to be about 30%, which is probably where Finn was coming from.

[Heroesandvillains]

Re: Any Small Business Owners Out There? Advice Appreciated

For one, taking out a personal loan for a credit score seems like a bad move. Could easily have been accomplished with a credit card instead... As a rule of thumb, you should have at least 30% of your yearly salary in the bank at all times. So if you don't have $3000 in the bank maybe now isn't the best time for more debt. Besides, it seems weird that your boss would sell a location that supposedly makes $50,000 a year for $10,000. Sounds too good to be true to me...

I'm actually buying the business for around $18,000. If I can get the money. The $10,000 was the upfront buyout (which we've since negotiated down). The rest is essentially a lease paynent, except I'll be the business' owner.

The $50,000 is before expenses, by the way.

I have $2000 in the bank and am trying at all costs not to use it.

Why not?

I'm in business banking for PNC and we have many business customers with loans booked solely with their social as the guarantor.

Interesting.

What sort of documentation from the business would I need then (Profit and Loss Statement for 2013, etc)?

I get blank checks in the mail from my credit card companies at least three or four times a month. Usually with 0% interest for the next 15-18 monhts.

I used it for the first time this year to purchase a water softener as an alternative to pulling it out of savings, putting on my card (which has an interest rate) or financing it through the water softener company.

I don't recall the exact terms, but I beleive you can use the check to borrow up to your available credit limit if needed. As I said, it was 0% interest for like 15 months and if you do not happen to pay it off in full, you are not penalized with interest on the entire transaction, you only pay on the remaining balance.

It was a win-win situation for us and definitely a solid alternative to applying for an actual load when we are talking about pretty small amount of money to borrow.

What is the name of the credit card company?

[Fresh Tendrils]

Re: Any Small Business Owners Out There? Advice Appreciated

What is the profit per year?

[Heroesandvillains]

Re: Any Small Business Owners Out There? Advice Appreciated

What is the profit per year?

$30,000-$35,000.

Give or take, depending on how aggressively one wants to fill the inventory.

The real opportunity here is to add. Currently there is ZERO online presense. Our cost on the goods are extremely low and can easily be flipped on sites like Ebay and possibly Amazon. Even at competitive internet proces, which is lower than our retail, the profit margin would be very good.

We also do not dabble in pre-paid phones or phone repair, both of which I'd like to (learn how to) do.

My boss estimates I'll make $70,000 next year before expenses, but I want to play it on the safe side in my mind. It's in his best interest to project high for me but it's in my interest to only expect to make what I've seen.

[Heroesandvillains]

Re: Any Small Business Owners Out There? Advice Appreciated

Well, I just applied for a $3,000 loan. Will hear in the morning if I get an approval or not. Wow, I'm nervous.

My boss and I came to a new agreement.

Original: $6,000 down. $4,000 by the end of February. $750 per month there after until paid off.

Now: $4,000 down. $1,500 by the end of January. $1,500 by the end of February. $1,500 by the end of March. $750 a month there after until paid off.

I know, not much better in the long run; but it's easier on me on the front end and he's throwing in some other things on my end to sweeten the deal.

If this loan attempt fails, I can kiss traditional banks goodbye. They seem to be the most reasonable of the one's I've talked to so we'll see. On paper, my mother and I look really good securing this, but my work history is **** and I don't make very much at the moment (hence me wanting the buyout).

If this sinks, I'll have two choices:

1. A major credit card company
2. Try to borrow it from my parents.

Honestly, they think this is an excellent opportunity for me (which is why they'll co-sign), but they haven't offered (and I've been too nervous to ask).

Realistically, I *should* be able to come up with the $4,000 before the end of December without the loan. Except, January is notoriously slow here. I'll feel much better if I have this loan *just to be safe.* I'm have a tendency to be a very "but what if BLANK happens, what will I do?!?!?!" kind of guy.

I'll update again after I hear back. Hopefully enough of you are interested in this to lend a word of a advice if this loan thing goes south.

Maybe I should add memes or gifs? That could help!

I saw a really cute one of a golden retriever petting a cat the other day. Let's see if I can dig it up...

[Heroesandvillains]

Re: Any Small Business Owners Out There? Advice Appreciated

Here it is!

There, there...