Need Funding , But not the way you might think of funding

MenozMenoz Posts: 1subscriber
edited December 2007 in Startup Funding
I really don`t need operating capital or direct project funding . What I really need is to find a way to conduct business and obtain short term loans as needed. Line of credit would be perfect if I qualified for the necessary credit limit to actually work with.
My problem is common, while I do have an income from my day job and ok credit score, I just do not qualify for the size of loan that would cover a typical transaction. 
I don`t want to sell shares or run a long term loan balance.
the only solution I can think of "short of the lottery"  finding  someone to put up  funds as collateral to borrow against on conditional basis for short term funding . I only want to use this method to jump start My Company`s  credit profile  and will only  need it until I can build report with a few lenders. 
Has you heard of anyone using a similar method to fund a start up?
Thanks for the Replies in Advance
James McLemore  Menoz12/29/2007 2:41 AM

Comments

  • MenozMenoz Posts: 1subscriber
    Yes, the company is too new and  no  real assets. It`s not that I can`t get a line of credit. I just can`t get a large enough line of credit. I working with real estate in the ranges of 150,000+.
    Using a credit line or lines I would need to have access to 20,000+
  • robertjrobertj Tampa Bay, FloridaPosts: 0subscriber Member
    Yes, the company is too new and  no  real assets. It`s not that I can`t get a line of credit. I just can`t get a large enough line of credit. I working with real estate in the ranges of 150,000+.
    Using a credit line or lines I would need to have access to 20,000+

     
    Are you wanting to use these funds ($150,000) to purchase real estate?
  • MenozMenoz Posts: 1subscriber
    Yes Sir,
    However,  I will be networking with several real estate  brokers and Investors  as a means of  quick turn around. I will be short  selling through  an agent(s)  that  an Investor(s) and I have agreed to use. I will be purchasing the properties through a contract agreement(s). some properties, I will be obligated to purchase while others will simply be  voluntary. The idea is to wholesale the more appealing properties to investors who would be better positioned to profit on resell than I am. My company will earn more of its revenue on the contracts at the front end and pass the opportunities to investors on the back end of the contract. I know it seem like I am passing up an opportunity by giving to an investor for cheap, but honestly, the holding of property until it can be sold will actually be more expense than I`m budgeted for. There will be properties that have a negative equity position that will not be attractive to Investors, I will simple have to turn these into rentals or carry the financing short term until the buyer can get a loan. I have actually planned for the bad deals because of the demographic of my market, its the good deals that I am not prepared for. So, the loans would be used to facilitate a transition from my company`s possession  to that of an investor`s. Ideally within 60days of less.
    once the company have grown and more revenues flow in, I`ll will be able to operate with out the need for a loan, but still may use them for practicality.
    any suggestion would be helpful
    Thank You
    James         
  • MenozMenoz Posts: 1subscriber
    I can see the connection your making and yes but with one difference, I don`t get to benefit when the group resells the property. Likewise I only receive purchase+expenses when they purchase it from me. Like I said , I know this seems like I`m just throwing away an opportunity but for now my contracts will not allow the markup. I`m already trying to find a way to work this out with homeowners/clients but thats a legal project that could take a few years to resolve if ever. for now all I can say to explain the strange mis-fortune (LoL) of having profitable property(s) and not being able to capitalize, it would create a conflict of interest that would undermine the trust it takes for my clients to enter into a contract for my services. They are not stupid, Thank God for that, they are fully aware of what they have agreed to. So in order to give them the assurance they needed, I added that restriction to the contract until it can be resolved another way. Now if I can just get them to trust each other (req`s Good luck and the grace of God) They themselves could actually become the investors which would work out great because I wouldn`t need any credit or loans at all.. But, that option just doesn`t seem likely to happen in the near future...
    well, hopefully I`ve added more insight to my post with out thoroughly produce Rapid Eye Movement and snoring. Thanks for your responses and patients
    James,                Menoz12/29/2007 6:24 PM
  • robertjrobertj Tampa Bay, FloridaPosts: 0subscriber Member
    James,
    Maybe I`m missing something here:
     but since you are "moving" the property quickly to the investor - why not have them purchase it directly?  Will you be doing something to the property before turning it over to them?
     
     
  • MenozMenoz Posts: 1subscriber
    Q: why not have them purchase it directly ?
    That would require me to get some sort of agreement or contract with them (which would be great) but I`m afraid they will see me as a competitor until they understand what I`m doing. so, I have to view investors as a competitor until we both can see the partnership potential.
    I do not have the resources to compete with them at this time if they decide to start offering the same service. Currently they do not offer these services and I`m sure its because of their over estimation of the actual RISK exposure. To seek out partnerships this early would simply position me for exclusion. I have to ensure that I will gain a market share, until then I`m not offering them anything they can`t do or acquire on their own with the exception of what I already have under contract. Their resources and experience are superior at this time and I would love to have them in my corner as partners, But the only value I can bring to the table is the properties I`m accountable for. It would be hard for me to partner with someone who offers as little as I do, so I am hesitant to believe that investors would actually partner with me when they could partner with others and achieve the same result. Honestly, the only advantage I have is their overestimation of the true risk and underestimation of the actual potential, hopefully you can see the risk I would expose myself to if I actively sought partners, contracts, or agreements with investors without  some guarantee to not compete.
    It may sound unreasonable but I am willing to admit that I`m afraid of losing my opportunity to own my business and provide real value to homeowners while doing well myself. My business really doesn`t have competitors  just other people and businesses that  need time to find out that I`m really developing a partnership with them. 
    I could just do it all myself,  take all the loss/gains, and try to become a monopoly. But thats not a good business plan, even if I could pull it off.  But if I can develop an offering that is worthy of a partnership then I will be able to generate support for my company instead of opposition.
    Will my company be great? I`m foolish enough to believe so. can it last if it is viewed as a market bully "no" The people would ask the government to step in (Bill Gates knows how that works out) .  People will support a company with broad control and  profits If and only if they perceive it as a benefit to them, not a bully.   Banks and Insurance companies don`t get much love from their clients but their clients can`t imagine their service no longer being offered. So I guess it`s ok if people  don`t necessarily  love your company as long as they see it as necessary and/or beneficial.
    well  My goal is to still have a company at the end of the day, Partner with those who are already in the real estate business and generally make sure that all partners (homeowners are partners) get a fair shake in the deal. I know many companies say its not about the money its about the benefits of their product or service, I just want to be able to say it and be completely honest when I do. The money?  can`t function without it , but I`m not foolish enough to re-invent the pet rock, I need stronger stability than that....
    Q: Will you be doing something to the property before turning it over to them?
    Ideally No, But things do change and I will adjust when necessary.  
    --- sorry for the long reply,
    returning back to the reason I posted, have you heard of anyone offering funds to startups/small businesses as collateral in lieu of credit until the business can establish  its own credit worthiness?
     
     Thank you for your responses.Menoz12/30/2007 3:44 PM
  • MenozMenoz Posts: 1subscriber
    1)  I don`t get commissions on the sale
    2) The broker doesn`t actually own the property (unless they are broke to themselves)
    3) I am the seller
    4) Since I am not a Broker, In order to "broker" a deal I would need a Broker (unless I could sell direct - Would require some changes on my contracts - working on it ) 
  • MenozMenoz Posts: 1subscriber
    CraigL,[url=][/url]
    You know , You may not realize it, but your response just inspired a possible solution
    - I`ll offer it as a joint venture
    - they`ll put up the collateral
    - all returns will be deposited into the collateral account
    - ideally the account grows until the gains are equal to the initial deposit (collateral investment)
    - at which point the investor can stay in or take a 50% cut of the gains and cash out.
    since the money is being used for collateral  in lieu of credit, limits to the amount and frequency can be set to minimize potential loss if business shows signs of poor performance. The length of the partnership could even be predetermined by the minimum time necessary to establish credit worthiness and extended if both parties agree.
       
    Does that sound the least bit rational at face value?Menoz12/30/2007 4:44 PM
  • robertjrobertj Tampa Bay, FloridaPosts: 0subscriber Member
    Menoz,
     
    I can`t make a real valued judgement with the limited info you have given, but it sounds like you are on the "right" track.
     
    There are some details to be addressed and you`ll probably need to have some type of documentation (business plan) to show to potential investors.
     
    Have a Happy and Prosperous New Year
  • chrom10chrom10 Posts: 1subscriber
    Hi Menoz,
     
    I might have a solution to your problem.  I actually do work with private lenders that offer the amount that your looking for even if your credit score is low.  They will provide you with the working capital that you need to get your business up and running.   Since they are private lenders they are able to work with your situation to get you the money that you need and the repayment term that you are comfortable with.  Please email me at www.jrcapgroup.com and check out the medical working captital to get an idea of what I can offer you.  Your repayment term will defer since your not looking to start-up a medical clinic but this site will give you an idea of what I can offer you.
     
    Have a nice day,
    Jamie
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