Posted by 2014-08-05 10:49:00
Title: We have looked into applying for grants to expand our business ($50,000) but you have to have a 50...
In situations like this it can be very tough to obtain the necessary financing. The banks will definitely want personal guarantees and hard assets (such as a home) to secure their loans. The banks will also want a steady historical stream of cash-flows to give meet their security needs, they must obtain reasonable assurance that you will be able to make your interest and principle payments. Your last ditch effort would be to seek alternative sources for the funds, such as a leasing company who will purchase the equipment then lease it to you. This will most likely involve some sort of down payment along with high interest rates.
My suggestion would be to put together your historical financial information (i.e. financial statements and tax returns) along with a proper 1-3 year financial projection proving that you will be able to make your future payments and generate enough cash flows to justify the purchase of the equipment. This may help when presenting yourselves in front of any potential lenders. It is always better and more professional to have these items ready to go rather than having the lender request them afterwards.