Does anyone know where I can get a substantial private loan at a decnt rate, approx. 7%, looking for around 100g's plus to help open a business, I have good credit and a good income but it's tough in this environment to borrow too much from the banks.
Private Money?
- Thread starter BallzDeep
- Start date
What you are after is called venture capital and carries a much heftier than 7% rate.
Tough market these days even for established businesses.
Good luck with it though.
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Tough market these days even for established businesses.
Good luck with it though.
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LancsLad said:
Actually for a 100k it would fall into category of angels, friends or family. Angels would want a chunk of the equity for their participation. Banks and traditional financial institutions probably wouldn't touch it without it being fully collateralized. They would want a personal guarantee along the lines of equity in your home, or an assignment of an equal amount of bond type investments. Your best bet would be family and/or friends on a straight loan...but this of course has other problems.
Good luck.
Shades said:
i agree, family and friends are the best bet. private lenders wouldnt look at such a small amount. even than their required return would be north of 25%/yr.
You need some serious advice-
For sure. VC money starts at 18% plus equity.
You better believe it.
It is even hard to find an honest angel for a deal as small as $100,000. My company is based on bank turn downs, so we hear the story all the time.
BallzDeep-PM me if you want some free education (nothing I could sell you at this point). Among other things, it helps to know the nature of your new venture, which will determine the best direction. But, for sure, no matter how good your business plan- the banks do NOT care
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BallzDeep said:
LancsLad said:
For sure. VC money starts at 18% plus equity.
Shades said:
You better believe it.
It is even hard to find an honest angel for a deal as small as $100,000. My company is based on bank turn downs, so we hear the story all the time.
BallzDeep-PM me if you want some free education (nothing I could sell you at this point). Among other things, it helps to know the nature of your new venture, which will determine the best direction. But, for sure, no matter how good your business plan- the banks do NOT care
.Just for asking the question and assuming such a thing is possible, I think you should be declined for ANY loan. A 7% interest rate for a loan like this? Are you nuts?BallzDeep said:
As previous posters have mentioned, friends, family, angel capital is the best, and you'll need collateral of at least that amount. Are you buying a fixed asset or a machine? The residual value may be taken into account. However, if you just need the money for basic expenses, employee salaries and marketing, you better have LIQUID collateral.
Oh... where's your business plan, five year cash flow projections, your legals (corporate structure/partnership agreements, can the business operate legally, employee contracts, financing agreements), your business number, your accountant and accounting information? I work hard to throw six-figures a year at MP's and SP's
. Before I - as an angel investor - would invest it, I would want to see these things. Without these, the phrase "A fool and his money are easily parted" comes to mind.I have a house with about 100k in equity but I want to buy a business which will take about 150g's to buy the property and 100g's for renos and equipment........having said all that, my meeting with the city didn't go well and I realize zoning is an issue as well as other issues, too many unknowns and obstacles, deal is dead.
Sorry things didn't work out for you. Something to think about for the future...if you are buying a business and/or property you can look at getting the vendor to help finance thru a vendor take back mortgage or loan. Also, when buying an established business make sure you get a non-compete clause, don't want the bugger to open up down the road and take his customers with him! Of course, this doesn't apply when buying a franchise.
Shades said:
Angels are the source, vanture cap is what they are providing.
Thats primarily how I make my spending money.
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LancsLad said:
True...I was just differentiating between Venture Capital Companies who tend to look at $5 million a pop versus angels/friends/families who tend to do under a mil. Operative word is "tend" I've seen angels do more and VC's do less.
Cheers
S
Shades said:
No problem.
There is a lot of money out there now but it is very cautious, with ever increasing risk premiums.
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VC's are aggressively priced but take huge risks. 7% money unsecured without friends or family help is highly unlikely. Best bet on the next deal is to take a home equity line of credit and ask vendor's to take back a note(s) for the difference.
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