Expert: Marina Lando - 4/6/2004

Question
Hi Marina,

I am interested in starting my own business but am lost when it comes to the financing. Any good advice or point me in the right direction?

Is there actually sufficient dollars out there to start-up a small business?

Thanks.

Answer
Dear Dan:

These are general guidelines for start-up financing:
1)   Down payment:
a.   30% for pure start-up
b.   15% -30% for business purchase
c.   20% - 30% for franchise start-up

2)   Collateral (not needed in some cases of franchise start-up and business purchase):
a.   Real-estate (business and residential)
Value = (Market value – Current mortgage) * 80%
b.   Equipment
Value = Purchase price * 50%
c.   Inventory
Value = Purchase price * 10%

3)   Experience:
Management experience and experience in industry - at least a couple of years
For the restaurant recent direct management experience is a must
Work around – hire manager and give him 10% of ownership.

Could not be financed:
1.   Home based business
2.   Membership business
3.   MLM business
4.   Pawn shops and other lending businesses

Information about unsecured personal loans here:
http://www.blquest.biz/money_halper.htm

Business loans:
http://www.blquest.biz/serv01.htm

Microloans (up to $35,000):
http://www.blquest.biz/microloan1.htm

Good luck,
Marina Lando
Business Loan Quest
www.blquest.biz