My situation is I started a car dealership a few months ago paid cash by selling a rental property to fund the business and start up cost. Still have money but I’m at a point I need to hire an employee as well as wanting to expand the business with more inventory and add in a mechanic shop.
The mechanic shop will be added to the current location to keep overhead low until the process is completely mplemented and things run smoothly business coming in etc. Repair shops are a need in my area so I’m thinking it will expand to its own location within a year.
My background includes a bachelors degree in finance, net worth of 200-225k. Make a passive income of 90k a year with the wife and I w2 income alone last year of 145k. Total income approximately 220k.
Wife is an rn and works minimal (stay at home wife) I’m running everything with the business. I talked to a bank today and they were wanting 100k in collateral for 60k line of credit which is crazy lol.
I’m in my 30s and have a 823 credit score 90k passive income. If we both went back to w2 employment could instantly boost income to over 200k again together.
Any suggestions on lenders or routes to go? I’ve done plenty of research but could be something I missed or don’t know about. I will be going to another bank tomorrow.
I’m looking for 300-350k loan or line of credit.
Few things:
Is the $145k entirely from the car dealership? If so, why pay yourself that much vs. invest back into the business? To me that is AT LEAST two salaries that could go towards paying another employee, no?
Also you say $90k passive income that your wife makes as an RN, which is not passive… is that not just income? How is that passive?
This whole post is very confusingly put together in terms of numbers from someone who has a finance degree imo, no offense.
As for what route you should take, expect to get better deals from local credit unions as they invest more into local communities and usually prefer small businesses.
$100k collateral for $60k line of credit is definitely not crazy, again this take is confusing from a finance major as you have to take into account interest on anything loaned out to you.
Also why do you need a loan for inventory? Shouldn’t your profits alone be covering growing your inventory? If not you should focus on lowering your bottom line, not expanding.
Building business credit on your EIN is what you are missing.
As understand it, you sold commercial real estate to fund start up expenses for business that doesn’t own its premises.
If so, good luck with loan and reasonable interest rate.
Are you buy here, pay here?
I’d rather do that plus reconditioning than get into expense of adding on FT mechanic.
Loan amounts are also function of throughput. You haven’t mentioned financials like sales turnover, revenue, profit.