Ronjohn7779
Well-Known Member
Business loans are very hard to get these days mostly because they are unsecured debt (unsecured in terms of affecting you personally). In theory the debtor could liquidate your business' assets, but most business assets are nearly worthless compared to what you initially paid. Banks just don't have the money they use to these days.
If you have 500,000 dollars in cash (which I'm assuming since you only need 200k) and you've been working the past 5-10 yrs you should be able to get a $500,000 to $700,000 unsecured business loan pretty easily. Especially if you're buying a trucking company/shipping company with a lot of fixed assets. If you can get a larger business loan than 200k and you wouldn't have to put too much of your own money at risk then I'd go that route. Obviously you may have to put up some collateral, but try to minimize the amount you could potentially lose. Obviously you'll need a certain amount of cash for operations. Remember that, even if you have a Net Profit for one year that doesn't necessary mean you'll have enough cash to pay expenses or liabilities (most business sell their products/services on credit, so collectablity isn't always guaranteed). Thats why you need a good deal of cash reserves to fair better in poorer market conditions.
It's really hard to get loans on business where a majority of your assets are inventory (i.e. retail and wholesale) obviously this depends on the kind of inventory you have. Most banks try to avoid giving loans out to business that are inventory heavy since theirs a huge chance you might not sell that inventory. Also owning too much inventory is just risky.
Most of the time the amount of assets you have, your work history, and credit score play a huge role on if you get a business loan (and the types of loans you can get). The more assets you have the easier it will be to get a loan.
You never want to personally guarantee a biz loan with personal property, investments, or cash. Ideally you want to walk away free and clear of debt if the business goes belly up.
If you have 500,000 dollars in cash (which I'm assuming since you only need 200k) and you've been working the past 5-10 yrs you should be able to get a $500,000 to $700,000 unsecured business loan pretty easily. Especially if you're buying a trucking company/shipping company with a lot of fixed assets. If you can get a larger business loan than 200k and you wouldn't have to put too much of your own money at risk then I'd go that route. Obviously you may have to put up some collateral, but try to minimize the amount you could potentially lose. Obviously you'll need a certain amount of cash for operations. Remember that, even if you have a Net Profit for one year that doesn't necessary mean you'll have enough cash to pay expenses or liabilities (most business sell their products/services on credit, so collectablity isn't always guaranteed). Thats why you need a good deal of cash reserves to fair better in poorer market conditions.
It's really hard to get loans on business where a majority of your assets are inventory (i.e. retail and wholesale) obviously this depends on the kind of inventory you have. Most banks try to avoid giving loans out to business that are inventory heavy since theirs a huge chance you might not sell that inventory. Also owning too much inventory is just risky.
Most of the time the amount of assets you have, your work history, and credit score play a huge role on if you get a business loan (and the types of loans you can get). The more assets you have the easier it will be to get a loan.
You never want to personally guarantee a biz loan with personal property, investments, or cash. Ideally you want to walk away free and clear of debt if the business goes belly up.
