New business Financing

[TonyD]

I've been in the business for decades but I'm stumped as to where to obtain financing for a new optical shop. Any ideas or suggestions?

[uncut]

:DTonyD:

You might have more response if you posed this question in the General....Forum instead.

[kcount]

Tha Bank (good luck) or the home equity line.

[bob66hall]

Kcount is right. Banks don't REALLY lend on any small business lacking two consecutive years of profitability. They really lend when you put up hard collateral well in excess of their loan exposure. Aside from your home equity line (low [interest] cost, but the downside to you is onerous), look first at non-conventional sources, like:
1 - Landlord. Commercial real estate has high vacance rates today. We recently did a deal where we negotiated one year of free rent as part of an agreement for a five year lease. That's essentially landlord financing.
2 - Vendors. Your market is over-served. Vendors are climbing over each other to get wall space, and will flex to gain space on your new wall. That's vendor financing. Avoid the "ABLE" group, as they'll own you, and outmaneuver you with their own retail operations. Plenty of hungry independents out there.
3 - "FFF". Friends, Family, & Fools. Go easy on all of them. They don't make great partners in the long run!

Exhaust these sources first, as they're your lowest cost anyway, and THEN bring in the bank if necessary to close the gap. Good luck!

[rbaker]

I've been in the business for decades but I'm stumped as to where to obtain financing for a new optical shop. Any ideas or suggestions?

If you have been in business for some time as you indicate the first place to start is with your existing bank. Just remember, things ain't like they used to be, banks are reluctant to make loans without your immaculate track record and sound financial position. One would also hope that you had some resources set aside from your previous business activity. If this is not the case (and I suspect this is so) you will have to capitalize your new venture by accumulating start-up capital from personal sources such as equity in your home, if any, and borrowing from family members and friends.

It is a good time to start a business as there are many tax credits available throughout the 2011 tax year. The best thing that you can do is to put together a business plan and run it by a CPA. There is so much uncertainty in the economy right now - issues such as health insurance, inflation, changes in third party reimbursements and ever increasing taxes and fees that it is impossible to predict the future of your new enterprise.

[David_Garza]

If you've been in business for decades don't you have any equity built up in your business to borrow from? I'm sure your current bank could do an SBA loan using your present and established business as collateral.