I have helped over 1,054 small businesses create over 12,650 jobs for people in the U.S. using various financing strategies over the last 5 years. I have owned 3 businesses and raised $2MM for my own real estate IT Startup in 2007. My specialty is with those looking to avoid venture capital, and with designing a financing structure that minimizes and balances your cost of capital, tax implications and legal compliance. Specific financing strategies we may discuss could include 401k Business Financing, SBA & Conventional Loans, Portfolio Loans, 401k Loans, Home Equity Lines of Credit, Seller Financing, Working Capital loans, and more.
Does your business plan include offering other financing options to potential clients as well? You may consider connecting with the Commercial Capital Training Group. They are a like e-Harmony.com for lending alternatives and offer money factoring services. You can license through them to access that library of opportunities to help finance with this method for a client. But doing this has a price, and the offer of service includes additional financing platforms too. I would be happy to discuss this with you as I have a contact in the space and can connect you.
If your client has a FICO below 700, lending can be more challenging. SBA and Conventional Loans may not be easy to get. If you want to pursue this option, you will want to work with a business loan broker to help spread your risk and be more efficient. If this option is not fruitful, alternatives include the following:
1. Portfolio loan/Margin loan off of non-retirement brokerage funds. FICO is not relevant for these loans. I know of an option that allows a client to take between 65% to 85% of the funds they have in the market. The amount and rate are dependent on the risk of the portfolio.
2. Rollover for Business Startup Program: You can use qualified retirement funds tax and penalty free and invest this into a private business. This 46 year old program was blessed by the IRS and does not care about FICO credit either.
3. Peer-to-Peer lending groups or private loans.
4. Commercial Capital Training Group: Alternative financing options here to include Money Factoring, Hedge Fund Loans, and other Specialty and Alternative Funding options.
An SBA loan is the only Traditional business loan option that can work for a new startup opportunity. However, this is a government backed loan and it requires you to have a green card or be a permanent resident, That said, you may have a partner that does have a green card or is a permanent resident own 51% or more of the business, while you own 49% or less ---- in this case, the SBA lenders will make exception for you. The SBA Standard of Operations will allow for this situation to move forward. Alternatively, you may also consider using other means of financing to include: private loans/peer-to-peer lending, home equity lines of credit (be careful how you navigate this though), Retirement 401k type financing (called the Rollover for Business Startup Program), and/or Portfolio Loans if applicable.