Posted on 08/31/2010 12:58:01 PM PDT by Windflier
My wife and I recently shot our wad on some high-grade advertising, in a desperate bid to resurrect our (formerly successful) small construction business.
That advertising is suddenly producing new leads better than we ever imagined it would. Our phone is literally off the hook. We're being inundated with calls for our services, and are scrambling to answer them all.
Trouble is, we're in no position to properly service all of this sudden demand, mostly due to the lack of some basic equipment, and a fully operational crew.
Finding the qualified labor is no problem, but to produce the product that is most needed and wanted by our customers requires specialized equipment that would cost us somewhere around $10,000 to purchase.
Our business was in a state of affluence for about ten years before it stuttered and failed some four years ago. Since then, our personal credit has dropped to below 600, so we're nervous about applying for an equipment loan through conventional sources.
I would very much appreciate any suggestions or info regarding SBA micro loans, or any other leads to sources of capital for small business expansion.
If my wife and I can find the money to do this, we'll finally put our business back on the map, and recover the life we once had.
Thank you!
How about renting the equipment on a per-job basis until your finances improve?
Friends and Family first. 0% loans are the best.
Next, you could max out your credit cards, but make sure you pay these off first.
Try the local bank for a business line of credit. You have to put up your assets as collateral though.
..ask your Senator
The advantage would be that you wouldn't be going into debt to meet what might be a momentary spike in demand.
They should go for $10 K.
SBA Backed micro loan. Up to 35k for 6 yrs. Check online for a local bank.
I honestly don’t know anything about these folks, but check it out.
http://www.sballiancecapital.org/store/pg/10-Frequently-Asked-Questions.aspx
My wife and I want to start a business early next year so I’ll be watching this thread closely...
My first thought is the SBA also. In any event, a loan broker might be another source. Be prepared with your documentation. They will require yards and yards of documentation.
I would call the companies who sell the equipment, or see what short term leases would cost you on the equipment. You could also, re-sell the leads to other contractors. The leads themselves have value.
Nervous? But you've got to try it anyway, assuming you have nothing to hide. Most small or regional banks really like SBA loans - they can get guarantees for up to 90% of the value from Uncle Sam. $10,000K is not a large amount either. Do your calculations carefully and be sure you include enough working capital. Doesn't look good to run out of money quickly after getting a loan.
Getting a loan thru your bank would be best.
Or you could try American Express Open.
If demand is that hot, just put expenses on a credit card and then pay them off pronto when you have the $$.
Congrats to you. That is a quality problem you have there.
Can I see your ad? (I’m in the ad game myself).
Not possible with the sort of equipment I need. No one rents the sort of rig I need.
We do rain gutters. What we need is a machine that turns metal coil into rain gutter and a small box truck to haul the operation from job to job.
There are independents who will come to a jobsite and roll out gutter for us, but what they charge per foot would eat up most of the profit from our jobs.
Check out Clark Howard.
All good suggestions, Lance, but none of them will work in our situation. Due to the failure of our business some years back, we lost nearly all of our assets, and our credit rating took a nosedive to below 600.
I’ll have to look hard at the friends and family solution to see if there might be someone who could help, but that’s a stretch.
Thanks.
Friends or family looking to be a silent partner? Can you lease the equipment with option to buy or buy it used? Are there programs in your area for seed capital for start up businesses? Call the SBA in your area and ask the questions there.
That's one option we were looking at for a temporary solution, just this morning.
No mortgage (lost the house four years ago), and no car loans (lost all the vehicles except the work truck, at the same time).
Screaminsunshine mentioned that I might be able to get an SBA loan for up to $35K. I need to explore that, although when we approached the SBA in our first year in business, all we got was the run-around.
I can’t help you with any advice but I can sure pray about it!
I thought you applied directly with the SBA for those micro loans. I wasn't aware that you could do it through a local bank. I'll check with our bank to see about this.
Thanks.
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