Question from Anonymous:
Is ther any finacial harm or otherwise in getting my DBA and setting up bank accounts now (before the store opens to prove some credability to potential lessors)? Or will I be paying taxes and fees on it even if its not being used?
Answer from our experts:
You will obviously want your DBA to be registered before opening the store. I can't imagine how you would start the business first. What if that DBA was already taken? What if there was an unforseen issue with it like the name you wanted was a registered trademark or something of another entity?
As for a bank account, of course you want this open first. Your start up costs should be paid out of a business bank account that is separate from your personal. This is not only smart book keeping, but required when it comes to accounting purposes.
No harm can come from this. Sure there may be filing fees for your dba registration but if you're committed to making this work, you can't be afraid to take this step. Have everything in place before opening so as not to run into an issue after opening and then being forced to temporarily close or do less business than planned because you weren't prepared.
You mentioned potential lessors. If you are still in the early phases where you have not even picked out a location, you still want to have that DBA and bank account set up by now anyway. A lessor is not going to feel comfortable renting out space to someone who doesn't have his plans in place. If there are any costs asssociated with your search for a lease or deposits on a space, they should be paid out of the business bank account which you will have set up already.
Question from Anonymous:
My wife and I started a catering business 4 years ago. Even during these tough economic times we have managed to make a profit - make a living and grow the business. Just recently we have worked at and received the opportunity to add a new banquet hall/conference center to our business. We will be adding confirmed contracts to our business, so our gross revenues will possibly double in 6 - 8 months. I am wondering what opportunities are out there that I can take advantage of - to aquire capital financing for equipment purchases? Banks seem to be the toughest road. Any help and direction would be great - Thanks!
Answer from our Experts:
This economy is tough. There are other options out there, such as a merchant cash advance, where you can easily obtain funds via selling a portion of your future credit card sales. If credit cards are just a small portion of your business revenue, there are alternative lenders out there, such as On Deck Capital that base loans off your cash flow.
Being in business 4 years certainly helps. Are there any local community business development programs in your area? I have found that they are usually a good bet. Call your local politician. I wish you the best of luck.
Question from Anonymous:
My business partner and I are looking for $19,000 in working capital. We own a mastectomy and cancer care boutique that caters to breast cancer patients or anyone who is undergoing chemotherapy or radiation. We started the business in July 2008 and used our own personal money to open the business and purchase store equipment and inventory. Now that we have a good idea of the actual value of our business, we want to increase and diversify our inventory and advertise more. Does anyone know who will loan such a small amount? Also, can anyone advise us on what terms are fair for such a loan?
Answer from our Experts:
"Fair Terms" on a loan is completely subjective. What I would consider fair is what is most advantageous to your plan. Certainly consider some of these factors and make sure you ask the loan officer what each entails:
• Origination Fees
• Repayment time frame
• Compounding interest policy
• Early payment penalties
• Collateral
• Balloon repayment vs. fully amortizing
• Ongoing loan maintenance costs
• Default penalties
• Lien covenants
• Refinancing options
Some practical options to look into are:
• Merchant Cash Advance providers : If you accept credit cards, companies like ours can provide alternative financing
• A short term micro lender
• Bank line of credit
• SBA backed loan
