Equity Specifics

MattTurpin

When I go to the next series of lenders, including this organization called SECTOR, the SBA's microloan program, and this other lending institution that works with the SBA to develop the economy, I want to have no less than 5,000 to vest in the company as my equity. I'm going to ask for 15,000. On a side note, I'd like almost the entire loan amount to be used for physical items that can be resold (the best I can do for collateral). I recently used 680.00 for legal and licenses. Can I count this amount as equity? If I had not spent the money on it, I would have after getting the loan. Would it have looked better on paper to have 5,000 and use 680 for the licenses, just to say "I have 5,000", or is it okay to come with, say, 4,500, and tell them I already spent 680 getting licensed? I'm laying off heavy spending till April 7th, so that I can hopefully recoup back to 5,000, but I'm really ignorant of what exactly counts as equity. Is it everything I've spent on the company, or is it just my savings account at the time I go for the loan?

MattTurpin

That works. My contribution so far has been nothing but the fruits of my own hard work. I haven't cashed my 401K check yet, because I have a lot of time I can wait, and the moment I do, it starts getting paid back. 401K loans don't show up on anything a lender would see, or so my coworkers tell me who've had to take theirs for whatever reason before applying for a real loan. I'm optimistic. Thanks Robert, you've always got the right answer.