Financing

[hall]

Our new mat has been open since January 2002. Our 2,000 sq. ft. store is small, but doing well and getting better every month. When we opened we did not have a lot of contacts for financing,and kind of went with one our distributor set us up with, Global Fox Financial. Since we did not have any previous business history, they established our loan at 12% interest. Well, you guessed it, the big payments are now starting to kick in, and we would really like to find some loan institution or bank that could offer a little better rate than this, considerering what most interest rates are these days.

So far, locally, no one seems interested in backing a new laundromat, even though our numbers look good,and are getting better every month.

Any suggestions?
Thanks

[Anonymous]

Pat,

Contact Kirk Ross at The First State Bank in Mendota. They were more than happy to get me started on my place in Rochelle. I'm at 7.75%.

However, part of my deal was on the building. Not 100% sure they would want to go with a place that is in a rented facility. But it's always worth an inquiry.

Any stores for sale in DeKalb? I would love to break into that market.....

[buddy]

Have you tried Home Equity Line of Credit? That is usually approved within couple of weeks and you get it at prime or prime+1% rate.

This would be your personal line of credit and you would have to own your own home. The advantage of Home Equity Line of Credit is you just withdraw what ever amount you want upto the maximum of whatever line of credit they approve. There are no fixed payments every month. You are just required to pay interest portion every month. You can pay off anytime you want and once you pay off you have that credit line available again.

For eg. If they approve line of credit for $200,000. It means it is available to you if you want to use it. If you don't use it then there is no interest or any other charges. If you want you can only use 50,000 and you will be charged interest only on that 50,000 amout. You would still have 150,000 available. once you pay off 50,000, you now have 200,000 line of credit available.

It is different from conventional loan or mortgage and it has very good interest rate - usually prime or prime+1%.

There are no fixed monthly payments as long you pay your interest portion every month which is tax deductible.

[pete f]

I have credit cards that offer less than 12%..
Buddy has the right idea, refi your home and use the 6% money.

Equipment dealers were offering 9% or so, maybe talk to your equipment supplier and get the equipmetn part refi'd?
On the total cost of putting your mat up, what percentage was yours in cash, unborrowed funds? What percentage was equipment?

[buddy]

What I suggested is not Refinancing your home. Itis just Line of Credit It is not a conventional Loan.

Home Equity Line of Credit means you have option to use that money whenever you want and for however long you want. If you don't use it then there is no charge - no fees - no intrerest.

The moment you use that you are charged interest on whatever amout you use until you pay up. Once you pay off you can use that again in the future.