Just looking for some advice as I attempt to get my wife approved for a personal loan for her small business. Simply put, she has been in business < 6 months,
scores took a hit with a late and paid medical collection, but are slowly rebounding to 620-630 and that's with high util that will be paid down by month end. We're hoping to get her to 660 as some lenders were requesting that. Here's the question:
I have good credit and already have a near paid personal loan, a new personal loan (penfed) and a new auto loan (all penfed). I don't mind co signing and I have a $90k income and < 40% dti, but I worry if I offer to co-sign I will be rendered useless due to the new loan accounts. Her issue is she has no revenue yet, it's going to be red for a while until she receives her liquor license and we want to fund for the next 2-4 months while we wait for it to complete. So the question is:
Should she look into a personal loan, like I took out originally for her, or try SBA, knowing it may take some time, or instead consider a LOC? I worry if we go the 'OneMain' route the apr will be through the roof and I worry SBA will find a reason to deny her from no revenue/being too new/etc. What would you do if you were in her situation? Thank you.
A Penfed Line of Credit (even if it's personal) might be the best short-term solution at this point.
I don't know what state you are in but a liquor license might give you instant leverage for a loan if they are valuable like they are here in CA!
How big of a loan does she need? How much can she actually afford to put towards loan payments? What period of time does she need to repay the loan?
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Regarding Penfed, I have an account with Penfed and have obtained a loan through them - $25k. Also have a $25k car loan, all 2 months old. So my concern was even if she joins, too, my co-sign wouldn't impact it positively as Penfed already has lent to us, albeit through me directly. With regard to loan amount, goal is 5 year term for $20-$25k. In addition there is a business plan in place and we are applying for a liquor license which, in our town, is almost printing money. We can probably put $2-4k if we had to as down payment if needed and she'd be able to pay it per month. The idea is to have enough to handle expenses for 2-3 months to buy time for the liquor license and continue to grow, as there is growth, just slow going.
One update: We are coordinating with a small bank that runs through SBA loans. We had initiated paperwork/research but put it on hold and I simply obtained a loan in the meantime for personal expenses and to also assist with the business. We are awaiting word on what he would need from us/etc.
Thank you for your time.