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jonik1979 · Jun 25, 2008, 09:07 AM

I found an oppurtunity to buy a buissness for less than 50,000 to start up. How do I qualify for a loan I have no credit, poor credit but lots of ambition.

rockinmommy · Jul 5, 2008, 12:24 PM

Are there any small business groups in your area. They're often linked to community colleges. The chanber of commerce might be able to direct you to them. They have counselors that will meet with you and help you analyze your plans - or make plans.

From what you described your funding source is likely going to have to be private money. You can either call on friends and family to loan you the money. (Offer them an attractive rate of return.) Just consider the ramifications if your business doesn't pan out and you can't pay them off. Not always worth it. Or you could try a "hard-money" lender. They offer loans at a high rate of return, but aren't as concerned about your credit. They'll need to attach the loan to something, though. Real estate, etc. Does this business opportunity come with any property or equipment, etc?

rjsnyder114 · Jul 11, 2008, 12:41 AM

Small business loans are not for small businesses. SBAs are insurance for banks. Banks will loan you money if you meet the following criteria. You must have a great credit score 730 plus. You must have the opportunity to purchase an existing business at a reasonable price to value. The business must show three years of profitability. You must be able to show through a business plan that you know the business and have a organized plan of action on how to operate it. You must have 10% cash down payment or land. You must be able to give the bank collateral of 130% of the loan amount. This includes the apprasial of the real estate with business, personal real estate and cash down payment.

rockinmommy · Jul 11, 2008, 08:38 AM

Originally Posted by rjsnyder114

Small business loans are not for small businesses. SBAs are insurance for banks. Banks will loan you money if you meet the following criteria. You must have a great credit score 730 plus. You must have the opportunity to purchase an existing business at a reasonable price to value. The business must show three years of profitability. You must be able to show through a business plan that you know the business and have a organized plan of action on how to operate it. You must have 10% cash down payment or land. You must be able to give the bank collateral of 130% of the loan amount. This includes the apprasial of the real estate with business, personal real estate and cash down payment.

Right, I thought that's why you were asking for other alternatives - because you don't meet these criterea. I wasn't saying to get a small business LOAN. I'm telling you to work with an advisor who can help you find other options.