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    Is there Any Hope to Start up a Business with Bad Credit
    #1
    Join Date
    May 2006
    Location
    Hattiesburg, Mississippi, USA
    Posts
    3
    Hello and thanks in advance for your help,

    I am a young gentleman who is serving his country and is looking to start up a business part time so I may be able to opperate full time when it's time for me to get out of the service.

    My problem is getting financed. My credit was ruined because of my divorce. Even though I have been working on my credit, it is still not worthy of being approved by a financial institution.

    I have heard of obtaining grants (which I think does not exsist) and receiving investment loans from investors. But how do I locate such funds.

    But I am certain of my sucess...........i know the business inside and out.

    Can anyone help


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    Re: Is there Any Hope to Start up a Business with Bad Credit
    It will be very difficult, but the start point will be the same: a detailed and convincing business plan.

    It is unlikely that anyone will provide credit, or VC, unless they see evidence of likely success. You need to provide that in the quality of the plan you produce.


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    Re: Is there Any Hope to Start up a Business with Bad Credit
    #3
    Join Date
    May 2006
    Location
    Hattiesburg, Mississippi, USA
    Posts
    3
    Thank you for your input businessman. But, is there even a chance of getting business loans or investment money even with a solid plan. I feel as though I am being stabbed in the back by my own country (which I serve). Immigrants, which happen to be minorities can come to my country without any credit at all and get all the financial backing they need, but I have to beg and plead. I am absolutely positive that my business will succeed. My business plan is currently in the works, but I would be happy to show you a copy once I am done if you would like to give me any constructive criticism.


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    Re: Is there Any Hope to Start up a Business with Bad Credit
    "My credit was ruined"... that, of course, is likely to be your biggest problem. However, you can do no more than present your plan/case.


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    Re: Is there Any Hope to Start up a Business with Bad Credit
    You do not state what kind of business you are trying to get financed. This is important. If your credit was ruined because of a divorce, then you may need a hard money lender (charges more in closing costs and points) or a private investor. Most lenders want to see collateral and an exit strategy if you cannot pay the loan back. If you have only a good idea but nothing else - it will be hard to get money from any funding source.


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    Re: Is there Any Hope to Start up a Business with Bad Credit
    I'm in the same boat as kefloyd1980, however I do have a solid plan I've been working on for some time with a loan advisor.

    I do, indeed have a solid business plan, but I don't have good enough credit to get approved for the money that I need to get to OPENING day.

    Should I wait out the application process and be declined, how do I find the right company that would want to fund my idea...

    I definitely want to have a backup plan.

    SBA requires 25% down payment on a loan.
    How would I get to $30,000 for the $150,000 I need?


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    Re: Is there Any Hope to Start up a Business with Bad Credit
    Hello,
    I am very new to this forum. Coffeekid, if you need $30,000 and can create a solid business plan, then have you considered seeking smaller angel investers to cover your $30,000? You could get $5,000-$10,000 from 3-5 investors and be covered.


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    Will it be harder to obtain a loan or investment because of your credit? Absolutely. It's quite unfortunate too, because at least in the U.S., they don't ever teach you how to manage finances and work on obtaining good credit while your young. Is it impossible? Not at all. The trick here is whether or not you yourself can pitch the idea. Sounds easy? It's actually a bit more difficult than most entrepreneurs seem to realize. You definitely need to draft a business plan and explain how your company/product/service can ensure profits to be made in the future if said loan/investment were given to you. Figure out the amount you need to get started and get the wheels rolling properly, as this will show you also did your research. Then it's all about selling your idea to the investors. If you don't 150% believe in it, it will show and they won't lend you a dime. It has to be a solid thought out business plan that you believe in enough to get others believe in.

    I hope this helps and I wish you the best of luck in your start up.


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    What kind of business will you plan to go for? It's not easy to obtain the loan based on what you have mentioned, which your credit is ruined because of your divorce. It's even harder when you have a bad credit because most lenders won't even consider working with you when they find out that your credit is below than what they have expected. In some lenders, however, will charge you very high interests for lending you the money to do your business because believe me, you don't want to have the interest of 50% for every dollar they lend you. For instance, I have a friend who's repaying the interest of 42%, which is for every $1,000, he has to pay the interest of $420 to the lender. Do you want to do that? No, because you don't know whether or not you will make money when you start up your business because most often people don't make money in the first year of their business. I would talk to the lenders or investors about this situation because lending money to do business is not easy, unless you have family or friends that can help you out.


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    Have you ever heard of Kickstarter? It is great for people who need capital, and you can grow your customer base at the same time. I have seen many people use Kickstarter to start their business. I think it would be a great option, especially if you are worried about the credit situation. http://www.kickstarter.com


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