First of all, I am not asking for handouts or an angel investor.

I have an idea to expand my business even though I'm a W-2 employee for Indoff. I do have my own business license as Roark Industrial Solutions to cover my A$$.

I want/need $20k for said idea/expansion. Should I go to my bank for a loan? What interest rates should I be expecting?

Just a thought and would like some professional advice/guidance.

Thanks in advance.

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I'm not sure I understand the question. Are you saying you are an employee of another firm and you have a company on the side that needs a business loan?

Either way, it depends on the state of your business, what you want the loan for, and what assets you are willing to put up. Here's some ideas:

1. Line of credit against inventory or AR. I have no experience with the former, have a lot with the latter. I've used a LOC for AR in many companies including my current one. They are quick, painless, and work pretty well for normal operating issues.
2. SBA Lending - I have used SBA many times in the past. I'm not up on their current plans but in the past they had a "microloan" program for up to $25K that was easy to qualify for. Back then the next step up was up to $100K, and then they had loans over that amount. The problem with SBA lending is that a bank does the lending, the SBA backs it up to a max amount. That means the bank, and the SBA, is typically looking for assets to secure the loan. Last time I had an SBA loan (a long time ago), I secured it with a Condo I owned outright. Point is they look for hard assets to take if you default.

No idea on what current rates are, my CFO does that now

Good luck.

my partner and i needed a small loan as well, about double of what you need but two of us so about the same. you can try the banks, maybe if you have a good relationship with one it is possible, they are strict now though and will want alot of paperwork

for us it was just easier to go through a 3rd party person that we knew. it was drawn up legal and all just like it was the bank but so much easier. interest rate was a tad higher but for us it was alot easier and helped get some more equiptment we needed on the fly

good luck with it

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Thanks for the feedback Tpup and H Bomb. To clarify, I work as a W-2 employee for Indoff, but am 100% commission with no draw or base. I am able to make my own business decisions as I see fit and only have a couple criteria I have to meet in order for Indoff to be okay with my decision(s).

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I checked on business loans recently and was told rates range from Prime +2 - Prime +6. However, an established business (with a good credit history) should be able to get a straight prime loan.

It might be tough to get financing from a bank if you don't have a history with them.
Really hope you find what you're looking for.

in my op 3rd party people are saving small business not the banks, not congress. call them loan sharks, business men whatever but they are the ones loaning the money to small business owners these days nobody else. sad but true

do you know any local investors or friends that do this sort of thing?? we happened to know a friends father that was retired and did this for people he knew buying a home. since the banks aren't giving people a mortage he would do it for them and charge higher interest rate. he knew us so did it for our situation since we werent buying a home and it was for a business. he made money and we got the loan which made us money, win win.

maybe someone local to you can help you out with this. i thought it was just us but i have talked to alot of other small business owners like us and they are doing the same thing bc the banks won't help them.

funny when the banks needed help us taxpayers bailed them out but now we need loans and they tell us to F off. hmmm nice system we have here

i wish you best of luck

H

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That seems awfully high. I was recently told prime +1.5 tops. Bear in mind I'm in Canada, but still...

For a loan or line amount of $20,000, be prepared to pay at least 3.5-6% over prime. Lines of credit for this amount are generally application only with the larger banks so they have higher rates for the risk factor. There just isn't any profitability for a bank to go any lower than those rates for that amount.

Try a larger bank because a smaller bank, even for that amount, will need a full financial package which as a W-2 employee, you don't have what they'll need.

I'd go with credit cards or a private party.

Another idea for an amount that small would be your local chamber of commerce. if you can show how them loaning you the money is going to create jobs and increase business revenue in your area they are usually interested in getting involved. I'm not sure what type of rates would be involved.

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Thanks so much for the valuable advice from everyone and PM's and e-mails as well.

My CPA came through in a big way that will help me and have a friend that might assist. The rest can be done with credit cards with lower rates than the ones discussed above.

I thank you all and this is what L4P is about for me. Solid advice from trusted associates.

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