Bank Loans for Small Businesses
Question
If you receive your severance and use it toward a business?
OUr job is on the last rung and i may get a nice severance package which i already considered to use toward my business. The issue is if you are only receiving un employment and my husband income will we still be able to receive a small loan. Serious answers please because of course with the recession banks are really looking to make sure you are employed but for a small loan will this cause a issue. The reason I am concerned is We are already saving capital and of course the severance package would make a huge contribution. I personally do not want to go back and look for another job as this is the second job with longtivity and i want to try my hand at business level. It is time. Also how is a business loan computed for payment for example is it 5 years etc for 10000. The amount we are asking is not huge and yes we already considered asking relatives but unfortunately they are in the same exact boat. Credit as we speak is also being worked on as well. ** serious members please thanks as always ** thanks!
5 months ago - 1 answers
Best Answer
Chosen by Asker
This is a tricky question as there are so many variables. First, if you have no business experience you are a very high risk category for a lender. Most new businesses go bust. Banks aren't looking to "make sure you are employed". They are looking for safety of their money. Sometimes employment provides that, sometimes it comes in the form of collateral or liens. Don't focus on how business loans are computed. Focus on your business plan, your projected earnings, cash flow predictions etc. That suggests to the bank that you know what you're doing and is very reassuring. Within the financial forecasts will be factored in dates for repayments. Also, you need to decide what you want the money for. Banks don't lend to shore up your equity. They're more likely to lend towards working capital requirements so that's how your business plan needs to be constructed. If you're unfamiliar with all this - get advice from professionals. All the best with the business.
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5 months ago
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