U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Economics > Business
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 01-14-2008, 05:38 AM
 
7,099 posts, read 23,864,444 times
Reputation: 7248

Advertisements

You should first go ahead and incorporate your business. THEN, let the corporation borrow the money. That way, the interest will be a business expense that you can deduct from your future income for tax purposes.

Make it some sort of non-identifying name so that if you want to bring others in as partners or change the type of business, you won't be stuck with an inappropriate name
Reply With Quote Quick reply to this message

 
Old 01-14-2008, 06:50 AM
 
663 posts, read 2,383,087 times
Reputation: 386
You might want to check out a Small Business Administration loan. From what I understand, they're not too hard to get and have reasonable interest rates. On the other hand, the ones I have known about were for physical assets (i.e. could be sold in the event of default).
Reply With Quote Quick reply to this message
 
Old 01-14-2008, 07:57 AM
 
Location: NJ/SC
4,286 posts, read 13,103,813 times
Reputation: 2578
[quote=bubbagirl;2505823
I'm in your same boat... a friend and co-worker of mine has tossed out a business idea, and of course I added my own spin on the idea... and poof, we're ready to get things underway. Except, we do not have the projected start up funds available and look like we'll need to borrow. I agree that the bank of family/friends is faster and sometimes more reliable. One thing we're looking at writing into the agreement is an additional payout of a small percentage of monthly revenue on top of the loan repayment for the duration of the repayment time period, probably 1.5-2%... simply to offer a little more incentive so that the investor gets a little more back for going out of their way.[/QUOTE]

This is what I'm looking for. Agreements, such as percentages. Thank you.


Quote:
Originally Posted by Padgett2 View Post
Just a thought.....do you have life insurance? If so, you may be able to borrow against it, or cash it in. Or a home equity line of credit.

Borrowing from friends or relatives doesn't always work well unless they are in a position where they would NEVER need it in a hurry for an emergency.
Thanks. I just bought my house a year ago, so I don't think that would work. I wouldn't ask to borrow from anyone that might need the money in the near future.


[quote=Humanoid;2506849]If we are not talking about a lot of funds then credit cards are an extremely useful way to fund your business. If you have decent credit you can easily get 20-30k in credit at reasonable interest rates (You can usually find 12 month 0% APR promotions too).
QUOTE]

Yes. I'm thinking about going the credit card route also. I have excellent credit, so it might be the better solution.


Quote:
Originally Posted by richson View Post
I borrow three times about 40.000 $ from some of my friends ,
if they have much money, they don't need it and they can trust you, it's good way to find money, but it sound difficult to find someone who has all of that.
for investment, I worked in FOREX Market , and I can Borrow much money from my Broker
This is the info. I need. Please tell me what agreement you made with the people you borrow from. What interest did they find fair. Was there a profit incentive? Thanks.


Quote:
Originally Posted by Padgett2 View Post
You should first go ahead and incorporate your business. THEN, let the corporation borrow the money. That way, the interest will be a business expense that you can deduct from your future income for tax purposes.
It is already incorporated because I have an internet business. It would be part of the same company. Thanks and good point.
Reply With Quote Quick reply to this message
 
Old 01-14-2008, 11:06 AM
 
955 posts, read 1,916,321 times
Reputation: 393
Quote:
Originally Posted by Rapture View Post
Has anyone borrowed money from friends/relatives to open a small business? I'm assuming they were presented with a business plan but was there anything else to support your idea? Did you go through a lawyer? What is a fair agreement?
I agree, your Business Plan is critical. A lot of folks downplay it because they say it will change. So what. It forces you to put down on paper assumptions, a projected financial statement and budget, what you market is, who is your competition, advertising, etc., etc. You just continue to refine it as things change.

As far as funding, I would think in terms of chunks. Take your plan to a bank and see if they will give you a line of credit if you have some sort of collatoral. Then look at funding grants. Start with the Chamber of Commerce -the advice is free and there may be some small business grants available. Now, when you look to friends/relatives, they are then part of an "investment team" and they'll probably feel better knowing that you have some other investors. Now the total amount of money from any one place is smaller. Also, your friends/relatives may be willing to back a bank loan to the business with something like their property, stock, etc.
Reply With Quote Quick reply to this message
 
Old 01-14-2008, 12:24 PM
 
Location: Weston, FL and Vero Beach, Fl
2,945 posts, read 11,926,788 times
Reputation: 2057
Forunately we were able to start our business - this is our 15th year - by saving what we had earned while working from home and keeping our day time jobs. We had enough within several years to get our own office. My partner kept his daytime job for another year. We did establish a $100,000 line of credit for the business which we have taped into twice.

Now comes the "however" part. We have never borrowed from friends or family. We have learned several bitter lessons from loaning money to friends and family which we will never do again. And, we would never ever re-mortgage a home or jeopardize our life savings to fund a business - there are other ways and it all depends on your business model, too.
Reply With Quote Quick reply to this message
 
Old 01-14-2008, 11:23 PM
 
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
20,746 posts, read 37,379,135 times
Reputation: 20717
here are a couple links from this weekend's paper
prosper.com
LendingClub.com

A business plan is critical for may good reasons, and draft revisions if you need to deviate from it... paper trail is a GOOD idea.
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Economics > Business
Similar Threads
Follow City-Data.com founder on our Forum or

All times are GMT -6. The time now is 11:40 AM.

2005-2018, Advameg, Inc.

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top