topic says it all. i'm looking to find out what type of help i can get to help open a shop. i.m in my mid 30's, have great credit a college degree and have held a steady job for 10+ years. i also have a background in the motorcycle/snowmobile/atv parts industry. i am not looking to go overboard with this thing, just a small, managable business.
the three main crirteria that a lender will look at mainly when it comes to lending are Equity, Credit Score and Debt servicing ability. with mortgages and hoe loans it's usually fairly straight forward if you're in regular employment, but if you're self employed the last factor (debt servicing) becomes even more important and difficult to assess. Likewise with business loans.
You have great ccredit which is brilliant - that'll help but it's not going to be enough in this climate. The other two factors are still very important. As for equity, securing a loan aginst stock or premises won't be enough most likely, you'll need to be able to put up some collateral so the bank knows that if you default on the loan (or your business goes under) they can recover the debt by selling the security.
Income/debt servicing is going to be your biggest hurdle though. you're looking to start up a new business and have no history to point to. This means you're asking the lender to effectivley take a punt on your business doing well. At the moment you'll struggle to find one that is willing to make that gamble.
Do you have any other income? If you have another, regular income stream that you can point to it'll help you greatly. All of this depends on the scale of the loan you're looking for.
ChristineL | Former Moderator | 3/10/2010 - 10:52 am
mrhelpful | Contributor | 3/9/2010 - 8:00 pm
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