@-Nate- wrote:
Hello,
I'm a young individual with an entrepreneurial flair and a passion for the field I'm in. I started a small online retail business last year and launched my business this spring. Everything has been going well and this month I will make a net profit for the first time.
I started my business with only about 12k that I made from an internship last summer, along with a few thousand dollars on credit cards and credit lines that I took out with 0% financing for 12 months. I'm at the point now where my business has picked up enough that I'm struggling to keep products in stock, as I don't have the operating capital to order in sufficient quantities.
I strongly believe that my small business is on the path to becoming profitable, but without a cash infusion it is going to take an unreasonably long time and be very difficult. If I could acquire a loan for purchasing inventory, it would allow me to do the following:
- Purchase products in higher quantities, allowing me to keep them in stock and to purchase them at lower unit prices (which means more profit for me)
- Expand my inventory with new products (which would get me new customers)
- Purchase more expensive products (the more expensive a product is, the more profit I make when selling it)
Because I'm young (early twenties), I have a short credit history. That combined with applying for several credit cards and credit lines last year, along with utilizing a high percentage of them, has resulted in my credit score being fairly mediocre -- my Equifax FICO score is below 700.
I don't have any experience on obtaining loans, but it seems like the risk of lending to me should be considered fairly low (despite my credit being poor), because I would be using the funds exclusively to purchase inventory. So it's not like some business ventures where the money is invested in a manner in which it could all be lost -- in my case, it would be used to purchase physical inventory that would still have value even if my business were to be unsuccessful.
I really have only just begun to look at my options for a small business loan, but from what I've read so far it seems that either going with my bank (Bank of America) or a SBA Microloan might be the best option.
Does anyone have any advice they can give me with regards to my situation and obtaining a small business loan?
Thank you for your time,
Nate
Loans are next to impossible these days and routes like SBA can take a LONG time from my understanding.
If you have started small and are doing okay and you feel confident in growing with more money layout for inventory then I would look to more credit cards but try moving over to the business side of things.
Not sure who you are buying through and where you are selling but you might be able to obtain net 30 from some of your venders.... if selling online you could look at a Amazon Business Store Card backed by GE (Very good with CL's and won't report to personal credit.
PayPal Mastercard (While personal it is GE and they are also VERY good about Credit Lines
Bill Me Later - high credit lines and doesn't report to credit.
~ Do you have bank of america personal? limit and balance?
~Do you have a business checking yet with them? I would look at a business card with them perhaps but if you are pretty maxed on personal side might be worth a little wait.
~Who else do you currently have cards with and what are limits and balances?
~Have you checked any of the pre-qual for citi, chase, discover to see if they are offering you anything? although those are all going to be personal, good chance if you get an offer for a personal can probably bet you can get a business card of sorts...
Starting Score: Equifax FICO 694