I plan on contacting my bank a short time from now to open a business checking account, and to apply for a business line of credit. I need the line of credit in order to provide me with an additional funding source that I'll need in order to purchase a few last products I'll be offering for sale at launch (est. about 3 weeks from now), to fund the creation of my website (already designed in full, just needs to be coded), and to purchase a shipping label printer I'll need, which will be a business asset that I'll be able to deduct from my taxes next year.

I've been with my bank a little over 12 years and have never had any major issues with them, but since my credit rating is terrible, I know I probably won't be able to qualify for a loan with them. My only real debt is my student loan debt, which is pretty high ($40,000 +), which I'm not current with, mainly because I've been spending a lot of money to get my business up and running (I've spent close to $7k since December 2011 so far on the business).

Has anyone had any success in obtaining a business line of credit from their bank, and if so, how much credit were you able to receive as a totally new start-up? (having no business track record). I still need about $2500.00 in funding. Is this a realistic number for me to ask my bank at this stage?

Hi... Since nobody else has joined in with your thread, I thought I'd jump in and put my two-cents worth in.

>I plan on contacting my bank a short time from now to open a
>business checking account,

Good first step. I would suggest getting a Debit card that goes with this business account and not buying anything for your business that isn't with that card. I guess you can write a check too, but I haven't had to write a check in years, but that's up to you how you make purchases.

I am terrible at recording checks and keeping receipts, and love to just get my statements and have everything there. Plus, the banks I'll usually break things out for you as far as expenses by category. Good for those of us with ADD and who are not old record keepers.

>and to apply for a business line of credit.
>I need the line of credit in order to provide me with
>an additional funding source that I'll need in order to
>purchase a few last products I'll be offering for sale at
>launch (est. about 3 weeks from now), to fund the creation of
>my website (already designed in full, just needs to be coded),
>and to purchase a shipping label printer I'll need, which will
>be a business asset that I'll be able to deduct from my taxes
>next year.


This makes me nervous and I'll bet that it'll make a bank nervous too. To loan money to a new business with no track record would be a huge rik. Then add to that a terrible credit rating and high student loans.... I can't see a loan happening. But, there are ways to still start your business.

You didn't mention what you were offering, so I have no idea what products you will be offering at launch. Have you checked with the supplier about letting you get some product on consignment? Are these products something that you will sell to customers who will leave with the product, or will you ship everything? Since you mentioned a shipping label printer, I am going to assume that everything will be shipped.

What about having those products drop-shipped? That way, you will need zero inventory. Let the suppliers stock the product. And, it will be just as if it came fom you. That would also take the label printer off the purchase list.

If you absolutely need a mailing label printer, you can get a nice one for around $100, even less. I've used one I ought 4 or 5 years ago for about $75 that needs no ink and is great. It prints my logo and anything else I deign. Not sure what you were wanting.

So, if you use drop shipping but need a printer, your costs so far re $75.

Now, the website. I think that your website is extremely important (I'm in the process of upgrading mine even as we speak)... and should be very professional. I have gotten many complements on mine, and the entire design and coding was all done on trade. My new one is the first one that will be paid for with cash... but ive had sites for over 0 years. Now, I have a product that is basically my time and talent, and, not knowing what your product is, you may not want to trade that out. If not, then I'm sure you could find a young web designer who would work with you on some sort of trade, or deal. Look on Craigslist, or other classified ads, for people offering websites. Some might be trying to build up a portfolio and would like to have another one to add to what they already have. Just start calling around and see who is willing to trade.

Again, this was all suggested from what you offered as details for our business. But, I have started three businesses with no loans. I hate then and don't want to be tied own to loan payments. I pay cash or trade.

I started one business by selling a ring that I'd found while snorkeling, used that money to buy an ad in a newspaper (back when that was the only way to advertise), then when I got a customer or two, I got deposits, used that money to buy my product, then collected the balance when I delivered the product. Then, used that money to buy more ads, a little food and started the process over again. I built the business that way.

Another business was started when I sold a motorcycle (my baby) to get things going.

I started my current business by finding a restaurant that let me give them 10,000 free placemats for their tables that had a little something about the restaurant in the center... and ads around the outside. It also had some fun facts on them too. I went out and sold the ad space on the placemats to local businesses... and also included an ad for my new business. I made some money after buying the paper and having the placemats printed (and paying a friend to design the ads)... plus I got a couple customers of my own from my ad on the placemats. So I made money and had my own ad on the placemat. That got me started.... and now I travel around the USA and Canada (soon Europe too), have been featured in some high-end magazines, HGTV, the Fine Living network and have painted for one of the richest people in the world (can't be named because of contracts)... and it was all started with no loans.

Think of ways that you might be able to get started without a loan. I think that you will have less stress on you, but can possibly do just as well without it.

Hope something sparked an idea or two!

Jeff
NightSkyMurals.com

PS.... I've tried to catch all the missing letters and mis-spellings. If some remain, I blame my iPad.

Unfortunately the credit score is something that is difficult to overcome. There are some ways to save your credit, but until that happens you may want to simply check at a number of different banks. Some will give you a loan despite bad credit.

A lot of people have unpaid student loans sadly and it can be difficult to stat a business with those pending, but aside from loans you could work a part time job or see if you can get a loan from family or friends.

Each bank is different, but you might want to ask around and explore other options.

GreatEnergy,

Thanks for your reply to my email also.

I was able to get a money gift from a family member, glad to say, which helped out a lot.

It turns out I needed more money than I realized to finish up everything though, so I still have about $2000.00 more I need to acquire soon, but the amount is within reach finally. I just have to work and save for another month or so.

Thanks again for the info you passed on though.

David

Hey thank you for your very in-depth answer to my question Jeff, I appreciate the time you took to address everything in my post so thoroughly.

You were right in respect to the bank's nervousness to give out a loan to a start-up, although the bad-credit and debt issue didn't really come into play because my bank had a pretty iron-clad policy of no loans to any company less than 2 yrs. old and pulling in "X" amount of dollars, which they made clear right from the start of my loan request.

My bank did set me up with a business checking account with a debit card though, and also forwarded my info to a business credit card company, which they made clear was totally separate from them. The company they applied on my behalf to for the business credit turned me down for any credit for various reasons though, which I knew they would because of my bad credit.

My business will be selling my own T-shirts via an e-commerce site (linked to Paypal for now). I did investigate drop-shipping as an option, there are many T-shirt fulfillment sites that will do the shirt printing, stocking, and shipping for business owners, which would definitely cut-down on costs. They take out a "huge" chunk of the profits though (which is understandable because they're doing almost everything), but why I really chose not to go that route is because I think I would come across to customers as just another company among the oooodles of other companies that have store-fronts utilizing their services (most sites require you to have their name as a part of your web address), making it hard to stand out as unique in the over-saturated T-shirt market.

I'm almost to my goal though, so not such a huge need to get a bank loan right now glad to say. I only need about $2000.00 more now, which would cover the cost of building my website (about $1,000), some stickers, my printer, and a few other supplies for finishing touches. I was able to get some "low-limit" credit cards for people with bad credit not too long ago ($500.00 max on one, $300.00 max on the other), which did definitely helped, and I (unfortunately) did take out a pay-day loan (a bad idea usually) for a low amount that helped also.

If everything goes well, I should be able to launch the site by the start of summer, if I keep working and saving that is.

Thanks again for your reply, and you do great work btw, I checked out your website earlier today.

David

David,

Glad you got a jumpstart on your funds. It can be quite difficult asking family members for money but it's often better than applying for a high interest loan, credit card, etc.

Good luck on your business, and it seems like you are well on your way. Sounds like a good business plan and one that doesn't require a lot o startup. I think you will be happy with your decision.

Best of Luck!