Financing a start up

[TheBox]

Hey guys,
So, I have an idea for a new business. My question involves financing and how that works for a person like myself.

The relevant info that I can think of:
-I bought a condo that I purchased for $144K and I put $12K down and have been making mortgage payments for about 6 months.
-The condo has appreciated by $100K since I bought it.
-Other than that, I have savings of about $11K.
-I am leasing a car for $383 per month

My question is how a business loan from a bank would work in this case:
-Would they give me much of a loan? What would my collateral be if my condo is already being used as collateral on the mortgage?

I wasn't sure about that... Hence, my initial thought was that to start a business I would need to sell the condo and take the profits and my savings and start my business. That way, I could either avoid a loan altogether or perhaps just have a small loan.

Thoughts?

Thanks for any help.

[stand856]

How much is the business loan?

[Raise Capital]

Hey guys,
So, I have an idea for a new business. My question involves financing and how that works for a person like myself.

The relevant info that I can think of:
-I bought a condo that I purchased for $144K and I put $12K down and have been making mortgage payments for about 6 months.
-The condo has appreciated by $100K since I bought it.
-Other than that, I have savings of about $11K.
-I am leasing a car for $383 per month

My question is how a business loan from a bank would work in this case:
-Would they give me much of a loan? What would my collateral be if my condo is already being used as collateral on the mortgage?

I wasn't sure about that... Hence, my initial thought was that to start a business I would need to sell the condo and take the profits and my savings and start my business. That way, I could either avoid a loan altogether or perhaps just have a small loan.

Thoughts?

Thanks for any help.

Our company went about it that way, and we had no luck with SBA loans. They wanted collateral, but we could not provide the collateral needed to secure the loan. Therefore, we went online to raise up to $92,867 in capital with methods we developed. Plus, we will help guide you through the steps.

[TheBox]

That's kind of what I thought.

At first glance, your story is impressive! I will have to check out your webpage when I have a bit more time.

[TheBox]

How much is the business loan?

I am not sure, since I am in the pre-business plan stage. However, I expect start up costs to be in the range of $20K to $80K depending on a whole multitude of things.

[stand856]

Also check out prosper.com, even though I think the highest you can get there is $25K

[youngmoneyblog]

i only needed $10,000 and the bank wouldnt give me that money. The partners and I have excellent credit too.

They said that they want the business to have been operating for at least two years, with a business plan before they would consider giving us a loan.

We went ahead and used 12 month 0% interest credit cards =X. fortunately, everything has gone well thus far.

[Raise Capital]

Also check out prosper.com, even though I think the highest you can get there is $25K

I checked it out, and it is a great concept. Owing money is tough for many new startups. Or, if they would fun your startup.

[TheBox]

i only needed $10,000 and the bank wouldnt give me that money. The partners and I have excellent credit too.

They said that they want the business to have been operating for at least two years, with a business plan before they would consider giving us a loan.

We went ahead and used 12 month 0% interest credit cards =X. fortunately, everything has gone well thus far.

Wow. That's shocking to me.

Anyone else have any experiences to share about getting financing?

Thanks for the help guys.

[NeeJam]

Re-mortgage your house/condo!

[TheBox]

Re-mortgage your house/condo!

If I did that... Doesn't that mean that I would be paying for the loan over the 25 year ammortization term of my mortgage?

That seems like a bad idea if that were the case....

[Raise Capital]

Hey guys,
So, I have an idea for a new business. My question involves financing and how that works for a person like myself.

The relevant info that I can think of:
-I bought a condo that I purchased for $144K and I put $12K down and have been making mortgage payments for about 6 months.
-The condo has appreciated by $100K since I bought it.
-Other than that, I have savings of about $11K.
-I am leasing a car for $383 per month

My question is how a business loan from a bank would work in this case:
-Would they give me much of a loan? What would my collateral be if my condo is already being used as collateral on the mortgage?

I wasn't sure about that... Hence, my initial thought was that to start a business I would need to sell the condo and take the profits and my savings and start my business. That way, I could either avoid a loan altogether or perhaps just have a small loan.

Thoughts?

Thanks for any help.

What kind of business are you trying to start?

[TheBox]

What kind of business are you trying to start?

I don't want to say the exact specifics at the moment... However, I can tell you the following:
-It is a retail/service business
-I will aquire a product from various sources
-I will sell the product to a specific sector of consumers as well as businesses
-I will offer delivery service to local purchasers
-I will also sell on the internet

The business will save consumers and businesses, time and money due to the delivery service, plus, I will be able to undercut my competition. In addition, my product is environmentally friendly.

My business will require a small to medium sized warehouse with a small store in the front. In addition, it will require a cube van for pick up and deliveries.

[Drew]

I'd be very skeptical that your condo has appreciated that much in the 6 months since you bought it. You're talking about over 67% appreciation in the time that a condo would have normally appreciated ~3%. I don't mean to knitpick, but I wouldn't count on the numbers that you're quoting unless you've gotten an appraisal.

Just my $0.02

-Drew

Hey guys,
So, I have an idea for a new business. My question involves financing and how that works for a person like myself.

The relevant info that I can think of:
-I bought a condo that I purchased for $144K and I put $12K down and have been making mortgage payments for about 6 months.
-The condo has appreciated by $100K since I bought it.
-Other than that, I have savings of about $11K.
-I am leasing a car for $383 per month

My question is how a business loan from a bank would work in this case:
-Would they give me much of a loan? What would my collateral be if my condo is already being used as collateral on the mortgage?

I wasn't sure about that... Hence, my initial thought was that to start a business I would need to sell the condo and take the profits and my savings and start my business. That way, I could either avoid a loan altogether or perhaps just have a small loan.

Thoughts?

Thanks for any help.

[TheBox]

I'd be very skeptical that your condo has appreciated that much in the 6 months since you bought it. You're talking about over 67% appreciation in the time that a condo would have normally appreciated ~3%. I don't mean to knitpick, but I wouldn't count on the numbers that you're quoting unless you've gotten an appraisal.

Just my $0.02

-Drew

I should probably have mentioned that I put the money down last Dec (to reserve it) and didn't move in until Feb. Not that it makes my story any more believable!

I understand the skeptisism, however, the reason it has gone up so much is two fold:
1) I believe I got an exceptional deal at the time I put the money down. It was a new condo conversion project and they were priced to sell quickly.
2) I live in Calgary! Prices have risen at absolutely absurd rates in the past two years. Particularly in the past year. No joke. The market here has slowed considerably since August, and there's no guarantee that prices won't fall a bit in the next year, but for now prices are running level.

Also, I should mention, that I have seen the same condo as mine on another floor of my building for sale listed at over $100K more than I paid for mine. Thus, if I sold, I would expect to get between 90-100K in profit (minus closing costs etc...)