Seeking Private Lender for $50,000 Loan

I am looking for a private lender for a loan of $50,000 to start up a business. I am having a very hard time finding lenders, so I thought this website would be worth a shot. :)

Thank you for your time!

Sincerely,

Brynn Girard

Edited: 06/26/2010 at 09:43AM

Jon Holdman

Real Estate Investor · Denver, Colorado

11859 posts
75547 Influence
15 Awards

Icon_minipost Sep 15 '09, 05:21 AM

You might say a bit more about what you're trying to do and how you'd secure the loan. Hard money lenders typically want a first position lien on a property and even then get 15% interest.

Edited: 06/26/2010 at 09:43AM

Jon Holdman, Flying Phoenix LLC

Rich Weese

Real Estate Investor · sioux falls, South Dakota

4295 posts
43803 Influence
15 Awards

Icon_minipost Sep 15 '09, 05:28 AM

Depending on the security, 15% is probably low and there would be points on top of that. Businesses aren't as exciting to loan on as real estate. Rich

Edited: 06/26/2010 at 09:43AM

Brynn Girard

· Windsor, Ontario

6 posts
48 Influence
1 Award

Icon_minipost Sep 15 '09, 05:52 AM

I am opening a dance studio. With the dance studio I am opening I am creating an entirely new market for my area as well.

Unfortunately I cannot secure the loan as I really don't have any assets. Because of this I wouldn't have a problem upping the rate to 20%.

Edited: 06/26/2010 at 09:43AM

Jon Holdman

Real Estate Investor · Denver, Colorado

11859 posts
75547 Influence
15 Awards

Icon_minipost Sep 15 '09, 06:59 AM

That's going to be a toughie. I also work in high tech, and attended a seminar a few months back about new business funding. Your's is going to be really tough.

Why do you need $50K? I can't imagine what you would have to buy to start a dance studio. I take ballroom dancing lessons, and the overhead for that studio can't be much more than the space, utilities, and insurance. This studio has probably been in this location 50 years, and I suspect they own the building. They're very lucky because they're on the hottest street in a hot area and I'm sure their land is worth a fortune. But just starting out wouldn't you rent? If Windor's anything like here, there are strip centers with tons of empty space or light industrial space like all the gymnastic gyms use. Maybe you have to install a floor, but I suspect that's much cheaper now that tradesman are looking for work. Seems like this is the sort of business you could start on a shoestring and ratchet up as you have some success.

Edited: 06/26/2010 at 09:43AM

Jon Holdman, Flying Phoenix LLC

Josh Green

Banker · Tampa Area, Florida

962 posts
4831 Influence
6 Awards

Icon_minipost Sep 15 '09, 08:17 AM

Originally posted by Jon Holdman

That's going to be a toughie. I also work in high tech, and attended a seminar a few months back about new business funding. Your's is going to be really tough.

Why do you need $50K? I can't imagine what you would have to buy to start a dance studio. I take ballroom dancing lessons, and the overhead for that studio can't be much more than the space, utilities, and insurance. This studio has probably been in this location 50 years, and I suspect they own the building. They're very lucky because they're on the hottest street in a hot area and I'm sure their land is worth a fortune. But just starting out wouldn't you rent? If Windor's anything like here, there are strip centers with tons of empty space or light industrial space like all the gymnastic gyms use. Maybe you have to install a floor, but I suspect that's much cheaper now that tradesman are looking for work. Seems like this is the sort of business you could start on a shoestring and ratchet up as you have some success.

i wanna see that on video!

Edited: 06/26/2010 at 09:43AM

Jon Holdman

Real Estate Investor · Denver, Colorado

11859 posts
75547 Influence
15 Awards

Icon_minipost Sep 15 '09, 08:34 AM

You'll have to come in person, sorry. Believe me, it wouldn't be worth the trip.

Edited: 06/26/2010 at 09:43AM

Jon Holdman, Flying Phoenix LLC

J Yong

Real Estate Investor · Pasadena, California

17 posts
-23 Influence
1 Award

Icon_minipost Sep 15 '09, 09:12 AM

or you can try to get on this show and convince the funders, http://abc.go.com/shows/shark-tank , Shark Tank on ABC is the show.

Edited: 06/26/2010 at 09:43AM

Brynn Girard

· Windsor, Ontario

6 posts
48 Influence
1 Award

Icon_minipost Sep 15 '09, 09:48 AM

Starting a dance studio, especially in my area where the competition have nice studios, is more complicated than that.

The proper flooring is expensive, several full length mirrors, ballet barres, sound systems, syllabi, advertising, office supplies and equipment, rent for the first few months, decorations and furniture... it's not cheap.

I realize due to my lack of assets (other than my husband's car) I am a high risk, but with the assets I will acquire during the startup phase and my willingness to pay a high interest rate, I don't understand why no one is willing to take that risk.

Edited: 06/26/2010 at 09:43AM

Josh Green

Banker · Tampa Area, Florida

962 posts
4831 Influence
6 Awards

Icon_minipost Sep 15 '09, 10:00 AM

Originally posted by Brynn Girard

Starting a dance studio, especially in my area where the competition have nice studios, is more complicated than that.

The proper flooring is expensive, several full length mirrors, ballet barres, sound systems, syllabi, advertising, office supplies and equipment, rent for the first few months, decorations and furniture... it's not cheap.

I realize due to my lack of assets (other than my husband's car) I am a high risk, but with the assets I will acquire during the startup phase and my willingness to pay a high interest rate, I don't understand why no one is willing to take that risk.

i don't understand how u don't understand that this is INCREDIBLY risky and that is why people aren't interested.

i would suggest however trying one of the community lending sites (ie, lendingclub.com)

Edited: 06/26/2010 at 09:43AM

Michael Ueltschey

· Madison, Mississippi

53 posts
99 Influence
2 Awards

Icon_minipost Sep 15 '09, 11:07 AM

Brynn,

Congrats on your venture. I wish you success. I would go to www.sba.gov and see if you could possibly get a SBA loan.

I that doesn't work...I would try friends and family...Have a good business plan so they can see projections of potential expenses and revenue. $50,000 is not a whole lot to raise...Believe in yourself and vision and it will come to fruition.

Edited: 06/26/2010 at 09:43AM

Jon Holdman

Real Estate Investor · Denver, Colorado

11859 posts
75547 Influence
15 Awards

Icon_minipost Sep 15 '09, 11:13 AM

So, you've just said its very competitive and you have to really put a lot into it to compete. As an investor, that's bad. You're jumping into a red sea where there are already many competitors. You're offering a product that's different only in detail.

You're willingness to pay a high interest rate is meaningless if you can't pay.

The fact you have no assets means I have no recourse at all if your business fails. You can simply declare bankruptcy and my investment is wiped out.

The assets you will buy are not worth anywhere near the price you will pay. A floor may cost you $3 sq.ft. to install, but is worth nothing once installed.

20% is not a high interest rate for a deal like this. For a deal like this, I'd want 15% interest on the money you take plus a 51% ownership in your business. Are you willing to give that up?

Really, you're into venture capital territory. So, if I give you $50K, I want to see a detailed plan that will give me back $250K in five years. Because it really looks to me like there is a very high chance I'll never see a penny back on my $50K.

The school I attend runs typically four classes per night, plus privates. A big class has 12 couples, a small one six. Call that nine. We pay about $12 per person per session. They typically have four classes per day. That sounds like a gross revenue around $20K a month. After all the expenses, that doesn't exactly sound like a high margin business.

My son accuses me of being the dream killer. Maybe he's right. But why would you even consider getting into a very competitive business? If you want to start a business, find one that doesn't have any competitors and returns high margins.

Edited: 06/26/2010 at 09:43AM

Jon Holdman, Flying Phoenix LLC

Tony Walker

Real Estate Consultant · San Francisco, California

94 posts
711 Influence
3 Awards

Icon_minipost Sep 15 '09, 11:17 AM

You can get business funding for just about any business venture, ( expansion or startup ).

The difficulty that I see is that you might be in Canada, if you are in the US, then there is a strong possibility that you could get funding.

Edited: 06/26/2010 at 09:43AM

Brynn Girard

· Windsor, Ontario

6 posts
48 Influence
1 Award

Icon_minipost Sep 15 '09, 11:50 AM

Thank you to those with positive suggestions and comments. For those who are being negative:

The dance industry where I live is HUGE and thriving... all the current studios are overfull, proving the need for another studio. I am also opening a new market in the dance industry that is going to be huge in the area.

I am not willing to give any ownership, hence my mentioning I am looking for a lender, not an investor.

Edited: 06/26/2010 at 09:43AM

Brian Wall

Real Estate Investor · Santa Fe Springs, California

166 posts
1368 Influence
5 Awards

Icon_minipost Sep 15 '09, 12:13 PM

Brynn,
Do you have a formal business plan?

I would strongly suggest contacting SCORE, they have business counselors that can consult with you.

http://www.score.org/women/site.html

How is your credit? You might be able to get a 50k signature line of credit from a credit union.

Edited: 06/26/2010 at 09:43AM

Jon Holdman

Real Estate Investor · Denver, Colorado

11859 posts
75547 Influence
15 Awards

Icon_minipost Sep 15 '09, 12:37 PM

If the market is real and you can quantify it, write this all up in a business plan and shop it around to local banks. Brian's suggestion is great. If you can really come up with a solid plan, and can show you can pull it off, a bank may be your best bet.

Edited: 06/26/2010 at 09:43AM

Jon Holdman, Flying Phoenix LLC

Tony Walker

Real Estate Consultant · San Francisco, California

94 posts
711 Influence
3 Awards

Icon_minipost Sep 15 '09, 01:54 PM

Originally posted by Brynn Girard

Thank you to those with positive suggestions and comments. For those who are being negative:

The dance industry where I live is HUGE and thriving... all the current studios are overfull, proving the need for another studio. I am also opening a new market in the dance industry that is going to be huge in the area.

I am not willing to give any ownership, hence my mentioning I am looking for a lender, not an investor.

Brynn,

Are you in Canada?

If you are then that changes things some.

You can get unsecured business lines of credit WITHOUT a business plan, banks will lend to brand new startup companies.

Going to a local bank with business plan in hand will prove to be very unsuccessful in a short period of time.

You have to prove that you don"t need the loan in order to get it.

Funding is available though. :mrgreen:

Edited: 06/26/2010 at 09:43AM

Brynn Girard

· Windsor, Ontario

6 posts
48 Influence
1 Award

Icon_minipost Sep 15 '09, 09:24 PM

I do have a business plan that I have been working on the past couple of months.

Banks are a problem for me right now. I declared bankruptcy just over 2 years ago. So... I have some things working against me because of that... again, why I am seeking a private lender.

I have checked out government websites for grants and loans, however they seem more interested in loaning to those who have been on EI for some reason. I have been a stay at home mom the past 2 years and have never collected EI because I choose not to use taxpayers' money to get by.

Edited: 06/26/2010 at 09:43AM

Norm Chrostowski

Real Estate Investor · Lakeview, New York

284 posts
1761 Influence
6 Awards

Icon_minipost Sep 15 '09, 10:12 PM

I kind of disagree with Tony.

I was in your exact situation 2 yrs ago. I was looking to buy a Beauty Salon.

I did use SCORE and devised a business plan, a very detailed business plan. Went to a small local bank, and was approved, BUT for significantly less than I needed.

Everything was based on MY ability to pay. Credit scores (mine are in the 700's), employment history all came into play. With a bankruptcy your behind the 8-ball. IMO your best option would be to find a friend or family member to help you out.

Have you ever ran a dance studio before? That is also important. What is your experience in this field? Investors will want to know this.

Keep plugging. Ask around in your local area. I suggest a business plan, so if you do find an investor, they'll know your serious.

As far as banks, even with my good credit and down payment, they were really leary about doing it because of my lack of experience in this field.

Edited: 06/26/2010 at 09:43AM

Brynn Girard

· Windsor, Ontario

6 posts
48 Influence
1 Award

Icon_minipost Sep 15 '09, 10:25 PM

I have been dancing 20+ years, teaching for 8 years and I have had experience in aspects of running a dance studio. I also went to college for Entertainment Business Management and graduated with honors.

Edited: 06/26/2010 at 09:43AM

← Previous 1 2 Next →