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Question – I need to get a loan for a party rental business that I started 10 years ago. Since start up each year has always been better than the previous one. So much so, that in 2010 I quit my full time job to focus solely on the business. When quitting my job I didn’t factor in the additional investments that I have made the last few years. So now, I have about $60k worth of business debt and would like to invest another $25-$30k in the next year or so. Also, all of this debt is now on my personal credit cards. Looking for the right loan options to consolidate the current debt from my personal finances, as well as, the additional funding of $25-$30K for future investments. If someone could please direct me in the right direction I would greatly appreciate it.
Our Response – There are many items of information not included here but some general advice that may help. First of all your credit score needs to be 650 or above. Also I assume the profits in the business will cover the debt service and still be profitable. The next issue you may encounter depending on the collateral you have is that financing existing debt, especially credit card debt is often difficult to do. If you have a building or enough equipment to cover the entire loan that will be great, otherwise you may need to look at personal collateral such as your home or other investments.
Assuming the above three things are covered, put together a business plan along with financial projections and begin shopping it around at local banks. Start with your current bank as they already have a relationship but you may want to try a couple of others to be sure you are getting the best financing.