Expert: Marina Lando - 7/19/2006

Question
Hi, I plan to open an infant and toddler Nursery in Las Vegas, NV. I need a loan of $150k. My personal credit is not the greatest, though my home has $90k equity. I dont want to do a home equity loan. If your business plan is promising and you use your home for collateral, is it possible for someone in my situation to get a loan of that size? Thank you!

Answer
Dear Nichole :

First of all make sure that you have at least 20% down payment for your project.

For example:
The total project cost: 187,500
Down payment: 37,500
Loan: 150,000

You mast have experience in daycare.

You must have collateral (as you have a start-up business). The following is the formula to calculate collateral:
Collateral = (Real estate value*0.8 - Mortgage) + Equipment value *0.5 + Inventory *0.1

The size of collateral is approximate amount of start-up loan you can get.

I would not recommend to apply for a loan if your credit score is below 640 or you have BK less than 3 years old, or charge-offs, or liens and judgments, or late mortgage payments.

Sincerely,
Marina Lando
President
Business Loan Quest
http://www.blquest.biz
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