When you are first thinking of starting your own small business it would be a smart idea to form the business as a separate entity.  By registering your company as a corporation or Limited Liability Company you are allowing your personal credit to be separate from your business credit.  This is doubly as important if your current personal credit is less than perfect.  You certainly would not your poor credit history to affect your business’ ability to grow and thrive.

You will also want to have a well written business plan when starting a new small business.  By thoroughly writing out your business plan and how the day to day operations are going to take place you will be able to prove to any potential lenders without hesitation that your new company will succeed. 

When you have a well thought out business plan lenders will be much more likely to loan you money without a lengthy credit history.  When you do secure these small business loans it will also be a great way to start building a positive credit history by repaying the loan in a timely fashion.

Making sure you have enough funds to run your business when it first forms is also a very important step to help build your credit.  Most likely your new business venture will not be profitable in the first few months of operation. 

via How to build small business credit | Loans – Credit – Debt – LoanSafe.org.

Kristan

A: It seems like the real issue is the business is not generating enough money to properly care for itself. If the $80K was borrowed to pay for previous inventory and the revenue from those sales was spent then the business is not sustainable like that.

If you are already behind and you have personally guaranteed this debt then the chance of getting a legit and expeditious business loan are slim. The fastest legit lending source I have seen is the peer-to-peer lending network LendingClub.com. Otherwise, an SBA loan is going to need to review your finances and take three to six months.

Now is the time to evaluate if your business is sustainable at all. You may also have to consider that the debt hole you’ve been digging is so deep that even if things turn around it will be too deep to dig yourself out of.

If you have a question you’d like to ask, I’d love to help you for free. Just ask your question online right here.

Source: My Credit Cards Are Maxed Out From My Business

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Corserv’s New Program Allows Banks to Gain Control of … – Yahoo Finance

A:

Starting your own business can be a blessing, or a curse. Depending on what type of business you launched, without the proper access to money through business credit or sales revenue, the outlook for success here may not be rosy.

Since you are a small business I am very confident these debts are your personal responsibility. That means that your options to work with these creditors is either to negotiate with them and try to establish a payment schedule you can meet or consider personal bankruptcy to get a fresh start and attempt to place the business in a situation where it has a greater chance of making it.

Before you worry about building your credit back up you’ve got to first tackle the underlying debt issue that is dragging you down. once you do that then rebuilding your credit is going to be a relatively easy thing to do.

You’ve expressed concern that creditors may go after business assets but what assets do you have? And is the business a corporation or LLC and those assets are owned by the company?

If you have a question you’d like to ask, I’d love to help you for free. Just ask your question online right here.

Source: I Am Currently Unemployed and Just Started a Business

Loan structure

• An ARC loan is a deferred-payment loan of up to $35,000.
• ARC loans will be used to make up to six months of principal and interest payments on qualifying loans for existing viable for-profit small businesses in the United States.
• Disbursement period (up to six months) is followed by 12 months with no repayment of the ARC loan principal, followed by a repayment period of five years. SBA pays monthly interest to the bank.

How lenders benefit

• Reduced Risk: 100 percent guaranty provides greater security and confidence to lend.
• Guaranteed Interest: SBA will pay monthly interest to the lender at reasonable rates throughout the term of the loan.
• Conventional, commercial business loans (and SBA-guaranteed loans made on or after Feb. 17, 2009) are an eligible use for ARC loan proceeds.
• Proceeds may be used to pay on mortgages, secured and unsecured loans, lines of credit and credit cards if the debt was used for eligible business purposes under the program.
• SBA turnaround on non-delegated loan applications – expected within five to ten business days.
• Access to E-Tran, SBA’s electronic application process available to SBA delegated lenders.
• Existing SBA lenders are eligible to make ARC loans and delegated lenders may make ARC loans on a delegated basis.

How the community benefits

• SBA loans help build and retain community businesses, create jobs and stimulate economic activity.

How small business owners benefit

• ARC loans are interest-free to the borrower, have deferred payments for 12 months, and have no SBA fees associated with them.
• ARC loans will allow borrowers to redirect cash flow from making loan payments to investing in their businesses.
• Banks will begin investing in small businesses again, making credit more readily available for those businesses that need it.
• Streamlined applications by SBA.

If you would like more information about the ARC loan program, click here.

If you have a question you’d like to ask, I’d love to help you for free. Just ask your question online right here.

Source: America’s Recovery Capital Loans From the Small Business Adminstration. One Year to Start Paying and Interest Free.

New legislation would allow the Small business Administration to directl fund small business credit and loans if no other lender was available. And we all know how tough it is to find lenders willing to lend.

Legislators in Washington, DC, from both parties, are concerned about this proposed legislation. They are expressing a concern that the government is going to be left holding the bag for defaulted business debt and that’s just not popular right now.

The article states:

SBA administrator Karen Mills has said that it could take a year before staffing, training and back-end computer systems are in place to manage any form of direct lending beyond what the agency already does in disaster scenarios. That would be too late for some struggling businesses. As an alternative, Ms. Mills suggests focusing on existing programs, such as utilizing the services of the SBA’s advisory network.

With a forecast like that it is doubful that direct loans from the SBA are going to be available any time soon.

If you have a question you’d like to ask, I’d love to help you for free. Just ask your question online right here.

Source: Direct Government Loans for Small Business