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GasMoneyGarage
10-27-2014, 07:06 PM
Just found this forum during my quest to answer this question myself. Let me give you the briefest intro I can.

I own a used car business, second generation, open since 1952. For 25 years I did it as a sideline while working full time for the USPS. I got downsized and left with no job, income, or retirement. So, my plan became working the business full time. I have:

Very good location with garage and office; proven spot on a main road where in the past we did very well.

Well-established clientele

Unlimited product supply line

40 years' experience of successfully evaluating, buying, and selling vehicles

Excellent business reputation

Business property is owned by me, debt free- LOTS of equity

PROBLEM: Poor credit

Five years ago the business was doing great. My brother was running it for me while I worked my job. At night I would do the buying, and handle odds and ends. Brother hired an employee and didn't keep good tabs on him; employee embezzled large amount of money, enough to crash the business. I spent four years cleaning up the mess and paying off the debt. In the process, my credit was ruined. My plan was to reopen the business, start rebuilding slowly, then go into it full time in three years when I would have retired. With the unexpected loss of my job, my time frame has been accelerated. Thus, I do not have the funds to purchase the needed inventory. Currently I have managed to assemble a very small inventory of cheap cars. I have been making some money. The problem is, I don't have enough inventory to create enough steady profit to pay the bils and reinvest in more inventory.

So, I have set about trying to find alternate ways to raise capital. I have a professionally drawn and detailed business plan with spreadsheet projections that are excellent, drawn by our local Small Business Development Center. The amount that would get me off the ground is very small by average business standards. Every financial institution that has looked at my situation loves the plan, but cannot give a loan because of my damaged credit. For 6 months I have tried every source I could think of or find; it's always the same, we'd love to help, if only you had good credit.

So, my ongoing quest and Google search has brought me here. I am posting this knowing the reality of my situation, and that chances are unlikely any of you will have my answer. But I write anyway. I will never give up; I have no room for failure.

Do any of you have any advice or ideas for my situation? I have a written plan, proven business and location, experience and expertise, and strong equity since I am putting everything on the line as collateral. I just need a legal way to borrow enough to get off the ground- without good credit.

I see people all the time that start low-likelihood-of-survival businesses, go broke, then resurface with another poorly thought out business, crash, and repeat... over and over. All I want is one chance for a proven, operating business to ramp up to a sustainable level. There just HAS to be something I'm overlooking.

Any help/advice would be much appreciated.

Harold Mansfield
10-27-2014, 07:41 PM
I'm no expert but it seems like an equity loan, mortgage or line of credit should be easy. You have collateral. Am I missing something?

GasMoneyGarage
10-27-2014, 07:45 PM
You missed the most important part- DAMAGED CREDIT. None of those things are possible with damaged credit. I tried to make that very clear. That's the whole problem.

Harold Mansfield
10-27-2014, 07:59 PM
You missed the most important part- DAMAGED CREDIT. None of those things are possible with damaged credit. I tried to make that very clear. That's the whole problem.
Yep, you're correct. I skimmed over the emphasis on "damaged". Maybe others will have some ideas.

GasMoneyGarage
10-27-2014, 08:06 PM
I would have thought that equity far in excess of amount sought would have been a big plus. Turns out that it carries very little weight with conventional banks; including the one that lent the original, now-paid mortgage.

Fulcrum
10-27-2014, 08:12 PM
Have you tried looking at private lenders? Though credit comes into play, I do think that they will also look at the past history and take into account your actions to clean things up given the employee embezzlement..

GasMoneyGarage
10-27-2014, 08:56 PM
I have. Couple possibilities, but nothing has come through as of yet. I also run a race team for a wealthy friend who might, but this is a good friend, which always complicates things, and carries a very large risk of ruining a friendship. There's got to be a better way I'm not yet seeing.

Fulcrum
10-27-2014, 09:27 PM
Shooting in the dark here, but what about a credit line secured by the real estate with an upper limit equal to 50% of the appraised value of the property? Normal banks probably won't touch this but a local credit union might.

Edit - If you give us a location as to where you're located might help.

GasMoneyGarage
10-27-2014, 09:51 PM
Sorry, should have said- central NY state, about 25 miles north of Syracuse.

I have not tried credit unions. I assumed they would be as credit-score centric as banks.

What you propose would definitely work... if I could get somebody on board.

Fulcrum
10-28-2014, 05:00 PM
Sorry, should have said- central NY state, about 25 miles north of Syracuse.

I have not tried credit unions. I assumed they would be as credit-score centric as banks.

What you propose would definitely work... if I could get somebody on board.

It's how I would fund new equipment purchases if I owned the building my shop is in. Offering free and clear real estate as security can generally offset credit issues. If you give it a shot, let us know how it turns out.

GasMoneyGarage
10-28-2014, 05:47 PM
Fulcrum- That's what I was saying; everybody likes my equity, along with everything else. I have tried this, but even with the equity and everything I have offered as collateral, they cannot get past the credit damage. My ongoing search in spite of that is what brought me here, and the reason for this post.

johnnycash- YES, I'm still trying to find funding. This thread was started only yesterday. But you can understand why one might be skeptical of a stranger with only one post. If you would like to give me the details of your proposal, I would certainly be willing to talk to you. E-mail me at bams50@msn.com .

Thank you for your responses!

Fulcrum
10-28-2014, 06:23 PM
Fulcrum- That's what I was saying; everybody likes my equity, along with everything else. I have tried this, but even with the equity and everything I have offered as collateral, they cannot get past the credit damage. My ongoing search in spite of that is what brought me here, and the reason for this post.

Sorry, I should have realized that. Aside from either credit unions, small local banks (if these still exist) or private lenders, I'm not sure where else to point you. I'm on the other side of the border in Ontario so I can only keep suggestions generic as we have different practices when it comes to lending (they're close to yours but some small changes can make a big difference in the approach).

GasMoneyGarage
10-28-2014, 09:01 PM
Thanks Mr. Miedema. I still believe there's a solution I have yet to find.

fred
10-31-2014, 01:32 PM
here are non-bank solutions that may work (depending on how damaged your credit is):
- LendingClub has a small business product (https://www.lendingclub.com/business). On the consumer side, i believe they lend to around FICO 620
- CanCapital (Small Business Loans & Business Funding | CAN Capital (http://www.cancapital.com/)) has small business loans and merchant cash advance. Since they're not a bank, they can lend more liberally as well. Your extended time in business should help here as well.
- Biz2credit (Any size business loan for every business - Biz2credit (http://www.biz2credit.com/)) is a multi-lender platform. I'm not sure what the underwriting criteria are - however, the cool thing is that you only submit one application and they will try to match you with one of their many lenders. They claim to have 1,300 lender partners, so maybe one of them will work for you :)
- LoanMart has a small business loan product that allows you to use your car as collateral (www.loanmart.com/small-business). I don't believe they have a credit score minimum
- OnDeck (https://www.ondeck.com/) claims that their underwriting is based on the business, not the personal credit ("We deliver true small business loans using our OnDeck Score™ technology, which focuses on the health of your business – not your personal credit score.")

Good luck. hope this helps.

GasMoneyGarage
11-03-2014, 08:51 AM
Thank you, 'fred'. I'll give those a try. I'm willing to do the work to beat the bushes! I did try OnDeck previously, and they were very positive until they found out I was a car business. It's their ONE exception; they don't finance any car dealers, new or used. Parts, yes, but not cars. Murphy's Law LOL.

Theboatshop
11-03-2014, 07:37 PM
I have had financial issues at The Boat Shop that I own. I used a local investment group to help with the funding of the new boats that I had coming in. My credit was trashed because of identity fraud but they did not use it against me like the banks do. I wish you the best of luck, its not easy swimming with your hands tied.

GasMoneyGarage
11-04-2014, 06:19 AM
Thanks. I thought of that but the problem is figuring out where to FIND a local investment group. Had no luck with that in this area.

smallbizfinancier
01-08-2015, 05:49 PM
Try a equity-based lender. Car dealers can be tough, especially used ones. Try Dakota Financial in Los Angeles: ABOUT US | www.dakotafinancial.com (http://www.dakotafin.com). Speak with an analyst there and if they can't help, they could probably forward you to someone who can.