AboutFinance Guy Expertise 1. All questions relating to finance
2. All practical aspects of mergers and acquisitions
3. Many general business questions
Experience Considerable experience in the area consisting of 25 years in both consumer and commercial finance and business management, including 15 years specializing in international Mergers and Acquisitions with over $100 billion in assets acquired
Education/Credentials Business administration undergrad
Wharton post grad in finance
Awards and Honors numerous corporate awards
Past/Present clients range from small enterprenurial companies to large multinationals
Expert: Finance Guy Date: 3/24/2008 Subject: obtaining financing for small business start up with less than perfect creedit
Question Hello, my name is Corey and I am interested in opening an ice cream/sub shop in a small town in rural Manitoba. The population of the town is approx 1200 people, but services an area of approximately 25,000. The closest ice cream or sub shop is approximately 25 mins away. The town I am interested in has 3 other restaurants, but none provide ice cream or subs on their menu. Unfortunately, my credit is less than perfect, but not horrible. I own my home which is valued at approximately $200,000 and my mortgage is for $145,000. I also have a $5000.00 R.R.S.P. line of credit. I have a vehicle loan for approximately $9500. I have no other debts. I currently earn between $5000 - $7500/month and would be able to retain my job as the majority of the work I do is in the morning and over the phone and internet. The restaurant hours would be 10:00 am - 10:00 pm Mon - Friday and extended hrs on weekends. I have spoken to several people in the community about my idea, and everyone is very excited. The town is currently building a waterpark which is scheduled to open spring/09.
I think that this would be an excellent opportunity for myself, but am unsure if I should attempt to obtain financing through a bank/credit union or privately. I am looking for $15,000.00.
Any help or suggestions would be greatly appreciated.
Answer Your decision should rest on the amount and type of due diligence that you do in researching this project. If all you have done is the above, that is far from enough.
Your town is small, perhaps TOO small for such a business. That may be why there is no such place in town already.
However, you may be right, this could be an opportunity.
So first, get some partners who also believe that this is a good idea.
Why, the risk is shared among several people and also, several heads are better than one, usually, in terms of decision making.
I do not believe that you do not have enough capital in reserve to start a business like this.
Plus, straighten out your credit issues, first before going into more debt with a new business.
