![Paul Goblet, Financial Advisor, NMSBIC](https://www.financenewmexico.org/userfiles/Paul%20Goblet.jpg)
Paul Goblet, Financial Advisor, NMSBIC
Throughout this series of articles we have addressed preparations for obtaining a business loan, whether from a traditional bank or an alternative lender like The Loan Fund. While paying cash is often the best option for covering the expansion needs of your business, sometimes – like when you are looking to buy new, very expensive equipment or to double the size of your plant – paying cash may not be an option.
Both of these examples include the purchase of hard assets and banks will often lend a large portion – 70 to 80 percent – of the purchase price. But non-collateral needs such as working capital to hire more salespeople, often can’t be met by traditional lenders.
The key word is successful. It is extremely hard to get anyone, even your Uncle Louie, to lend you money, let alone invest equity in a business if it is not profitable. If your business has lost money for the last two years, if you are struggling to meet payroll, if you have little or no backlog of orders, or if your product or service is just ordinary, the chances of attracting any kind of capital becomes more difficult. Lenders and equity investors want to do business with someone who has been or will be successful.
Continue reading