I would like to know is it possible to start a small business by using small business credit?
I would like to know if it is possible to start up a business using business credit if:
1. You are starting a small business, or you are already a business owner.
2. You have to have perfect credit.
3. Do you have to already have to be in business for 1 or 2 years before you can aquire business credit?
July 30th, 2010 at 2:37 pm
Most lenders are not willing to loan a new business money without the owner/officers personally guaranteeing any loans.
This is because approximately half of all new businesses wind up being closed within the first two years.
Good luck in your venture
Jerry-the-bookkeeper
July 30th, 2010 at 2:55 pm
you will also need a comprehensive business plan to have any hope of getting a business loan or investor interest
July 30th, 2010 at 3:27 pm
with about 50% of your own cash, yes, if not probably no
July 30th, 2010 at 3:31 pm
Lenders look at the “5 C’s of Credit”
Character – the reputation of the person requesting the loan
Capacity – the business’s ability to repay the loan
Collateral – the assets that can be put up to repay the loan
Conditions – the overall economic conditions
Capital – the investor’s pre-existing investment into the business and/or the money they have on hand for the business.
Small businesses generally have very little collateral and an uncertain capacity to repay the loan; right now conditions are very poor.
So unless you can really play up the Character and Capital considerations, it’s very tough to get a loan.
July 30th, 2010 at 3:47 pm
What are you buying with your credit card?
Are you buying equipment? Don’t. Lease equipment and leave your business credit card to cover short term monthly expenses, like buying product that will be resold. The equipment portion can be leased over a few years and reduce your start up costs. I’m in the equipment financing business and work with small businesses and startups all the time.
Send me a note with your contact info and some details about the business you’re looking to start up.
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