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I just wanted to ask how some of you were able to get financing, loans, etc. to start your business. Our business is still pretty new but we have been successful thus far getting our shirts into local stores and malls. Problem right now is trying to get everything needed to continue to grow. We were having our shirts screen-printed before but that is going to cut too much into our profits so I have been learning how to screen-print myself as well as learn Corel Draw, RIP software, etc. Cashing out some equity has helped a bit but I was wandering if anyone has been successful with business loans or anything similiar. Thanks for any replies
 

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Have you heard of factoring? I'm in the process of getting my products in some stores and I have been researching factoring. It is kind of like selling your accounts receivables.
The factoring company considers the credit risk of the stores that you do business with. The store places orders and the factoring company pays you upfront (minus a small fee!) what the store would owe you. You then don't have to worry about collecting from the store. It seems to be a great way to fix some cashflow problems.

If you get orders from stores, but don't have the cash on hand to produce the products, I think it can be helpful. Check into it!
 

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Get a good stable banker in your corner, like the one your checking is at. Take the guy a good business plan and your last 2 years tax returns. If you have current income bring the financials report. If you can impress them with the facts and have some equity somewhere. They will be delighted to sell you some money. LOL If your business is up and running maybe you can get a line of credit or an SBA low interest loan. Just go in and start asking the business department folks questions. They are there to make money from your profits. They will help you if they can. Oscar
 

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I used the guys at Paramount Financial Services (www.paramountfinance.com) to finance my early equipment and they are an absolute perfect company to work with. Highly diligent and will go the extra mile for you when it comes to processing the loan. Definitely quick turn around time.
 

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Here are some ways people get money to start or grow a small biz:

  • Friends and Family, aka, the quickest way to loose friends and family: Make sure they understand the risks and you do need a written contract
  • Home loan: refi your house or take out a second
  • Credit Cards: If your cc company sends you low interest checks guaranteed for the life of the loan this is not a bad way to go
  • Equipment Lease/Fleece: Watch the interest rates on these. Often the lender will quote you a low interest rate. What he is quoting you is HIS PROFIT, not your rate.
  • Business Loan: If you can live with prime plus 10% then go this way.
  • Factoring or Purchase Order Financing: You sell your A/R for a fee, expect up to 2% every 2 weeks if you don't have outstanding credit and even then you might not do better.
  • Angel Investors: These are folks that will offer you money based on the soundness of your business plan. Be prepared to loose your business if you give away too much equity, and even if you don't you could loose some control.
  • Partners: Offer an equity stake to take on a partner that has cash.
Good luck. If you are not already a member, join your local Chamber of Commerce. They can help you out.
 
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