Reality Check Q&A #7
Oct. 2, 2009
BUSINESS LOAN
My wife and I are in our 50's and just opened a new franchise business (as it is our passion). Planned to get a loan but after three months of working with the bank, opening an account with $35k, setting up credit card processing, etc., the bank unexpectedly turned us down. So we went ahead and opened the business with credit cards. Now in operation for 3 months we want to start working on a loan.Our plan is to open several locations (up to 6) within our region.
Here is my question. How do we get a loan big enough to open these locations with no equity left in our house, many credit cards (which has lowered our good credit rating) but a potentially very successful business.
The money would allow us to open the stores and run them until they are profitable.
We both work in the business so we do not show income as of yet. The first location is supporting itself but the debt of the investment and the lack of funds to expand the business is keeping us stagnated. Since we are working 16 hour days we do not have the time or expertise to write a "super" business plan for the banks/investors.
We have only the basics that we got from SCORE.
It is nice to see that you have taken this advantage to get specific practical answers.
You have gone to SCORE for help. This is a good start: www.score.org.
You ask: "How do we get a loan big enough to open these locations with no equity left in our house, many credit cards (which has lowered our good credit rating) but a potentially very successful business."
Go to a different bank. Go to several. You will probably rejected. Banks are cutting back on loans.
You are a high-risk borrower. You are a business start-up. You have no experience. You used credit card debt to start the business. A banker will see all this and conclude: "These people are stark, raving mad."
Get the first business site profitable. Pay off the credit card. Then apply again. You will appear to be a safe borrowers.
SUV
Should a person take advantage of the much lower prices on used SUVs at present betting that the price of gasoline either has reached its zenith or that any higher operating expense is offset?
If you are buying the SUV from a desperate seller at a price that is at least 15% lower than Kelly Blue Book, yes. The desperation of the seller is the key.
I can see no advantage to owning an SUV other than a really low price. But you can get low prices on just about any car. As unemployment rises, prices will get lower.
REFINERIES
On this "D" Day anniversary, why are we not drilling for oil and building refineries with the same resolve that our blessed predecessors stormed the beaches of Normandy?
Because we are not allowed to. The environmental restrictions on refineries are total. There has not been a new refinery built in the U.S. in at least 35 years.
This is deliberate. The greens are opposed to economic growth. You should subscribe to Arthur Robinson's newsletter, Access to Energy. It has been warning about this for two decades. www.accesstoenergy.com
TITHE
If you own stock, gold, or other capital assets that you've already tithed on, and the government inflates the money supply, causing your assets to appear to appreciate, and you then sell those assets, the government then taxes any capital gain.Clearly this is unfair. But: should you tithe on the "increase", just because the government is essentially stealing everyone's savings through inflation and you were smart enough to keep them from stealing yours? I guess what my question boils down to is, what's the biblical definition of "increase".
Yes. You used the money to invest. You used it when it was worth more. Now God gets His cut.
GOLD PRICING
Who sets the price of gold and how can it fluctuate if it is the standard that sets the price of the dollar?
Buyers compete against buyers. Sellers compete against sellers. Out of this competition comes a price. This is true of every good and every service. Gold is no different.
INVESTING
90k income; 500k NW; 150k debt.
Sale of property will fetch apx 150k.
Pay debt w/proceeds? Or buy radio station?
I possess background to run.
Then run! Fast!
I can think of only one investment worse than a radio station: a city newspaper.
Radio is doomed. The Internet is replacing it. Young people do not listen to radio.
Pay off your debt.
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