I have a business that I have been running for 5 years now, I want to get a few trucks and some trailers and I also need to get some cash to help my cash flow work better. It is taking longer for my cleints to pay me then my accounts give me to pay them. I am looking for $150,000 of which a hundered thousand would be secured by the equipment, I would be willing to put up my house worth $450,000 owing $300,000 for the loan as well. I have mid 600 credit and the business grosses a little over $800,000 a year. Does this seem like a possible loan I might be able to get? I just wanted to get some input before I start approching banks.

If your credit is good and the business is profitable, look at leasing the trucks. The dealer who is elling the trucks can help you get set up.

As far as cash flow you can either go to the local bank to get a line of credit against your house or if the invoices are business to business, you can get a line of credit using them as collateral. You can also "factor" the invoices. Factoring is where you essentially sell the invoices to a finance company they provide you immediate cash, say 75% of the outstanding invoices and then when your clients pay in full, the provide you with the balance of the invoice amount less their fees.

” Does this seem like a possible loan I might be able to get?”

Well you never said if the business is making money, which would be the first thing a lender would look at. However, assuming that you do end up following Commercial LO’s advice about leasing, your loan requirements drop to $50,000. At that level 5 years in business, a credit score that is not horrible and grossing $800,000 should be good enough to get you past a small business lending credit scoring machine. Depending on your level of receivables, you might want to push the line of credit request even higher to slightly below $100,000. This is of course assuming that the business makes money.

I am netting about $80k, but I like the idea of leasing the trucks, and setting up a credit line and factoring. Great help!