Question I am intrested in starting my own business,first off i am a minority who wants to start my own business can you help me out.
Answer As minority you can apply for SBA loan. Your minority status does not mean that you will be 100% approved for the loan. But it will give you a preferred status over non-minority business owners.
Create business plan. It must include projections for at least 2 years.
Make sure you have 20% - 30% down payment
Make sure you have collateral. The following is the formula to calculate collateral:
Collateral = (Personal Real estate value*0.8 – Mortgage) + Commercial Real Estate Value * 0.8 + Equipment value *0.5 + Inventory *0.1
Make sure your credit score is 680+. Use Pre-Paid legal service for obtaining credit report. It will not only send you credit report but will also clean it in case of identity theft.
Make sure you have relevant experience. Banks will never finance career change.
Collect all necessary financial documents:
1) Personal tax returns for the last 3 years
2) Business tax returns (for existing business, if you are buying one) for the last 3 years
3) Profit And Loss statement year to date (for existing business, if you are buying one)
Find local bank that will finance your business type (VERY IMPORTANT). Call first and discuss your needs in details.
Complete loan application – make sure there is no arithmetical errors, mistypings and all personal financial information is correct.
Submit the complete package – all documents that were requested by the loan office, in the order that was requested - to the bank.
