Obtaining a small business loan with no proof of income
by velesmist, Window Shopper
- Created: August 6, 2014, 2:05 am
- Updated: August 6, 2014, 2:13 am
Hello. I am considering purchasing a Plato's Closet franchise, which specializes in the resale of apparel to the "tweenties" crowd. The franchise was recently ranked #1 in Forbes magazine's list of "The Best And Worst Franchises In America" and owners of the franchise have a SBA loan default rate of just 2%. The cost of opening a store amounts to about $250,000.
Although my application for a franchise license was recently approved, I'm concerned that my lack of a current income may make me unsuitable as candidate for a small business loan.
I recently graduated from a Ph.D program and I'm officially unemployed. I have approximately $100,000 in cash in a checking account and a house worth about $700,000. My other non-liquid assets amount to about $50,000. There is no mortgage on the house, but it is co-owned with my father and has a home equity loan of $280,000 associated with it. I also have $56,000 in student loans, a car loan of $27,000, and $1000 in credit card debt. My current total monthly expenditures (which include loan repayments) amount to approximately $4,500. In addition to the assets mentioned above, I have $340,000 in forex trading accounts (similar to stocks), but which have been held under a relative's name. If need be, I can transfer the funds to my name.
I apologize for all the details. In sum, I currently have $100,000 in cash and a total net worth of about $486,000. If I transfer the funds in my forex accounts, I will have a net worth of about $826,000.
I'm looking to obtain enough financing to cover the entire cost of opening a store (~$250,000). Although I have sufficient assets, my concern is whether my lack of proof of current income will jeopardize my chances of obtaining a loan. What options are currently available for someone in my position?
Some additional information:
- I have an excellent Equifax FICO credit score of 817.
- I will have a solid business plan backed up by the Winmark corporation (the parent company of Plato's Closet). Your help is greatly appreciated.
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