Help With Working Capital
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Generally Banks (SBA) included will not lend on a start up without substantial collateral. Beware of "hard money lenders" looking for assets. Within our financial practice we aid and assist clients buying and selling businesses. Typically those willing to sell you money are looking for assets they can attach or property they can lien. Always be careful with these types of folks. Others will attempt to lend you money on credit card financing at interest rates that are in the 20% + range. Without substantial time in business along with a business track record it is very difficult to get a loan on working capital. You would need to have several years of tax records, consistent business income and a proven track record of profitability. We structure sales and mergers of businesses and people assume they can run out to a bank and borrow the money to buy a business, unfortunately, unless you have something the lender can take if you fail there is not much to lend on. Many business people who "fall into" a business either with luck, something left to them, or starting as a hobby rarely run the business like a business and more like a cash register. Failing to properly structure the business i.e. C Corp, S Corp, LLC etc and take payroll as opposed to just taking money out of the register. Payroll is an indicator of an actual business and then you can value the business based on owner interest and income. Hope that helps.
Fortunately I run a debt free business, I am fortunate and never use credit , however, I work with a lot of potential borrowers and without substantial time in business it is impossible, in addition to the fact that many have lending minimums that are $500,000 or more . They will not do $60,000 or $80,000 loans on main street businesses or franchises. I have been round and round with lenders. You are welcome to call me and let me know what you can do I have no shortage of buyers. As far as credit counseling and the promise of "raising someone's score " goes, that's just simple math, pay your bills on time and don't be late. Telling someone you can have late pays and debts removed is almost impossible, it may disappear for a month but then it will come back. Building credit and paying off debt is the only true way to increase a credit score. More than just that other factors increase a score too, bad checks, overdraft records, moving from home to home, rental history, driving records, there is so much data out there that paints the real picture of determining economic maturity and financial stability. Gradual income increases, education, signs of stability and so on. There is an algorithm , that is trackable, for every type of behavior.