Board Topic: Loan for website
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Loan for website

Posted by: Jim Mc. Oct 10 2003, 02:14 PM
I am a computer technician at a manufacturing plant, and I am currently going to college to get a computer science degree. My brother owns a small auto part store and I have experience in that because I have worked at his store before. I have tried to convince him that we need to set up a web presence so that we can sell directly, but he says that it would be too expensive. Finally the other day he told me that if I really wanted I could open the store and sell parts and he will supplie the parts at his cost. I think this is great since the margin in the parts can be really high (about 50%) but he said that he would not invest any money in it and that making it happen would be all on me. The problem is that I know about computers and databases, but do not know about web design and I need to hire a designer to create tge site. I spoke to someone and he quoted me $5,000 to $10,000 to create it. How can I get a loan to pay for the site.

Posted by: loanuniverse Oct 10 2003, 05:05 PM
Jim:

Financing this kind of operation using traditional methods will be a challenge. To begin with, lenders big or small shriek away from anything with the words "internet venture" on it.

Nevertheless, maybe I can come up with some alternative ways of making this work. Let me see what options might be available to you:

1 You mentioned that you are a computer science major. Have you considered learning enough html to create the site? The learning curve might not be so hard for you since you are already versed on the other matters. As you are aware, the heart of a site like that will be the product database.

2 How about getting in touch with a couple of your fellow students {those that have skills that complement yours } and bring them along as partners. Your labor costs will be much lower.

3 While getting financing for the website itself might not be easy to come along, how about getting a personal loan? The amount you are looking for is small and your personal credit might be good enough to get it. Take into consideration that an unsecured loan usually carries a high-rate usually in the high teens.

4 Do you have a relative that can help you with financing? You can get a relative to help either by lending the money directly, by standing as a guarantor or by pledging an asset to the lender. This is done all the time for personal loans and business loans.

5 You could also try to go the more traditional route and apply for a business loan for the business under either a small business loan program at a community bank or using one of the Small Business Administration loan guarantee programs.

Whichever way you decide to go, I suggest that you create a business plan for the website. You got some good things going for you such as having a source of parts that will provide them at wholesale, some experience in the industry and some knowledge of computers. On the other hand, you might find out that the 50% margin does not hold for the online market.

Good luck and I hope this helps.
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