Business Loan

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Open Question: Investment in a small business, what is the time and money required? Income?
I have a lot I could type out about what I plan to do, but I really have 2 big main concerns that I'm looking for any advice on. I only have $40,000 saved up. I'm 22 with excellent credit and about 8 months with a s-type corp (ebay business). I was approved for a $275K home loan, but am sticking with my cheap apartment for now. Should I buy into a local business such as a pizza joint or subshop, or should I buy into a larger franchise like papa john's for example. And is it even possible for me to get a large enough loan from the bank for any of them? I have seen local shops for $80-200K, and large franchises I've read about look to be $200K-800K. I'm thinking I'd only be able to go for the smaller local business's. So onto my main questions: 1. Would I have to work 40, 60, 80 or more hours a week? 2. Would I be able to make at least $30K a year and hopefully $50K-$80 a year net? Thank you so much for your advice! read more...

Open Question: buying a pizza shop, good idea? Money potential? Is my plan any good?
I'm 22. I've saved up nearly $40K. I have a 2 year degree which will get me no where I want to be. I can go back to school, but I hate school and see no purpose in only getting a better career. I've had my own online business over the past 2 years and the average income was about $30K annually, but the economy has killed my business literally. Would I be able to even get a loan at my age and status in order to buy an established business and run it? Of course I would do more research on whichever industry, and have my cpa comb over the financial statements of the business. I just want to know simply, from everyone here's experience, if I would be able to shop around for say 2 months, find the best deal, use only $20K (plus loan money) and buy a business? AND would I be able to make at least $30K net per year from this business? How about $50K per year? Would it be a 60 hour per week thing or more? Would it be pretty reasonable to sell it and buy a bigger one on and on upwards? OR buy several business's, perhaps putting a manager in position doing more work but I get paid less so that I could have the time to open new business's? Thank you SO much! thanks you guys for the answers and encouragement so far. The biggest thing I'd like to know though, is really if I can make at least $30K a year, but hopefully $50K per year for my personal net income, and if it will require 20/40/60/80+ hours of my time each week forever. Those are the 2 biggest concerns I have, money and time. It wouldn't make sense to work 80 hours a week for a $30K income, 80 hours a week can make me $50K a year at my old job because of overtime and base pay was only $10.50 (3 years ago). read more...

Getting a business loan during a time in which the economy and market is not as stable as it was a few years ago, may be a bit more challenging than you may think. Not to say that it is not highly possible to get a business loan; it just means that banks and financial institutions are being quite picky about their clients. A current business with established credit and profits is more likely to get a positive response than a start-up business at the moment.

In order to get a business loan as a start-up company, be prepared to give the lending institutions more information than you ever knew existed. Most places will ask you for a very detailed business plan. Sure, creating a business plan is a major challenge and time consuming but a vital part of establishing a business. A bank wants to see that your business plan has outlined every possible scenario and step that your company will be facing. Seeing all the details meticulously put together in a folder shows that you are organized and quite serious about your business venture. If you are able to obtain a new business loan without showing anyone a business plan, consider yourself either lucky or the victim of a scam.

Also, when pursuing a business loan, be prepared to show several years of your personal tax returns, paystubs and have a credit report pulled. If you own your own home, you may even have to agree to put a lien on your home. The lien allows the bank to recover their money should your business turn out to be a bad investment for them. Once the loan is paid off, the lien disappears. If you do not own a home, do not panic, there are lots of ways to still go about getting a business loan. Having a home and allowing a lien to be put on your residence simply assures the lenders that they are guaranteed to see a return on their loan.

Having a stellar business plan is key to applying for a first time business loan. If you do not have a business plan or have one that is unprofessional and unorganized, your chances are very slim in obtaining the funds that you need. There are lots of places on the internet that have advice on how to create a business plan and even templates that will make the creation much easier. It may require some research and a lot of thought but in the long run, it will be helping you think through all aspects of your business as well as provide facts for the lenders. All-in-all, the more organized that you are when pursuing a business loan, the smoother and faster the process will be for you. That is something that the lenders are sure to appreciate as well.