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Startup Loans and Your New Business (Page 1 of 2)
Anyone who’s ever tried it knows that building a real, working business is no easy matter. For every business you see that’s growing out there, you can find probably thousands that are on their way to failure. You see, it takes a lot more than a terrific idea to be successful. You need to have a “never say die” attitude and almost a relentless energy to work your way through the hard times – and make no mistake, there will be hard times. But if you have the right stuff, you can make it work.
In many cases, the hard times that plague startup businesses revolve around money, or more to the point, undercapitalization. It takes real money to open a business and to keep it running. Lots of startup moms and pops usually turn to their personal savings or other assets to do this and that can be a mistake. More often than not their money simply wont last long enough. And when it runs out their fledgling business folds and theyre left without a business or any savings.
Business journals, text books, and business gurus will tell you that you need enough money in a startup business to keep your doors open for the first six months to a year. Without that minimum amount of cash you’re looking at only a small chance at success. Savvy entrepreneurs know this too and therefore give themselves a solid chance at success by finding their capital in the form of business startup loans.
However, the kind of business startup financing most entrepreneurs need isn’t available to just anyone. Lots of banks and lenders consider these types of loans pretty risky vehicles and so the barriers to qualifying can be quite high. Still, any fledgling business owner can increase his or her chances by taking the time to prepare themselves thoroughly – that’s the key.
Look at Your Numbers
Start by making a thorough examination of what your operating expenses and potential returns will be. You’ve got to be realistic and even conservative. Figure there will be unexpected expenses and build them into your plan. Also figure that your sales or returns will be less than you hope. Add up the numbers so that you have a reasonable figure that tells you how much money you’ll need to make it through your first year of business.
Just how much of your own savings and assets you can bring to the table? Again, be conservative. Don’t commit all of your available money (experienced entrepreneurs never do). But you need to commit some of your holdings because every lender you deal with will want to know you believe in yourself. And taking a financial stake in your own new business will show them just that.
Create a Business Plan
One absolute necessity in all of this is a sound business plan. Don’t count on receiving any financing without one. Business plans are nothing more than evidence (factual and/or anecdotal) that demonstrates your business will succeed. And lenders want as much evidence as possible. They actually want to make the loan and building a strong business plan tells them that you’re probably also capable of building a strong business.
Why people refinance mortgage loans
First, you have to think about the refinancing plans and ideas/work arounds that mortgage lenders will throw at you in case you want to lower your rates. Lending companies wont give you something “good” without certain qualifications.
So, with that said the next thing you might want to do is really decided if you “need” to refinance your mortgage. A good number people think that refinancing is an easy task simply because they have a built up history with a company. They think hey I’ve spend x amount if years with you so you owe me this in return. Refinancing doesn’t always mean lower rates and people need to get this through their heads before putting all their eggs into one basket (it’s not for everyone)
Now, I’m not saying refinancing isn’t a good option it’s a great idea but it just depends on what type of mortgage you have. That alone will be the main factor that discerns whether or not refinancing is a good option for your personal situation.
There was a time when lending companies needed to do conduct a detailed background check on your properties before lowering your rates but now with the economy the way it is most companies are willing to work with you so they can have your business (take advantage of it).
So ask yourself something (or your spouse). Is it really time to refinance is this something we really need to do? What is your strategy what are you trying to do here?
Perfect example, do you want lower rates so that you can still cash out and pay off other debt or do you need just a basic refinancing plan?
Most common reasons why people want to refinance
1. Better Credit Rating
Most people can’t obtain low interest mortgage so they bear to suffer with elevated rates. There are those that are lucky and get lower rates even with bad credit
Traditionally people try to pay their loans back/on time in hopes of building their credit and this does work but sadly it doesn’t work fast enough for most. Not to mention most can’t afford but to pay the minimum amount due each month.
2. Lower Interest Rate (Pocket Money)
Some people want a better deal in the end they want to cash out in the end and use the access money for other things like paying off other debt, buying a new car…. Etc.
Experts say that getting home equity is the better option (in our current economy) because the rates are cheaper.
For instance, have a loan of $40,000 on a $75,000 home. You consult with your spouse or financial advisor and you come to a conclusion that a lower interest rate is the way to go. Which will allow you to allocate $7,000 to pay off your car loan (7k is just an example figure)
Now that you have a little understanding about the benefits of refinancing loans its time to sit and see where you stand financially and path a way for your future.