Loan for profitable business
| Listing Information | |||
|---|---|---|---|
| Amount: | $15,000.00 | Status: | Loan created |
| Grade: | AA | DTI: | 8% |
| Lender Rate: | 10% | Borrower: | freedom333 |
| Finished | State: | NC | |
| Funded: | 100% | Group: | (No Group) |
| Loan Information | |||||
|---|---|---|---|---|---|
| Loan Status: | Current | Origination Date: | 2008-05-13 | EricsCC ROI: | 9% |
| Status History | |
|---|---|
| May 12, 2008 | Current |
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Purpose of loan: I started a small vending business in January 2008, which I have been operating myself for four months. The business cost $35k to start and I used $20k of my own funds and borrowed $15k from family. Now that I am comfortable that the business is profitable, I want to pull out $15k of my personal funds to use for other income producing purchases. My personal financial situation: My day job is that I am a CPA at a big-four accounting firm. I have been there 7 years and am a Manager. My wife and I have a net worth of $165K. We have two pieces of personal debt: 1) Our home for which the payment is $1,614 on a 30-year fixed rate loan (debt-to-income ratio of 22%), and 2) A 10-acre piece of land we bought in Vermont from family at a discounted price. It was financed by my family at 0%. We owe $21k on the land payable at $7k for each of the next 3 years, and last year?s tax assessed value of the land was $40k. There are no restrictions on selling if necessary. We already have the cash set aside, earning interest, to pay this off. We have no credit card debt, auto loan debt, or any other type of consumer debt. (Note that I use credit cards regularly for most purchases in order to earn the points, but always pay the entire balance each month.) My business financial situation: I purchased the business for $35k. I have two accounts with seven machines. The business is incorporated and I operate by the book (i.e. pay the appropriate licensing fees and taxes). I operate it myself, spending about 4-8 hours a week. I used $20k of my own funds and borrowed $15k from family. The $15k was borrowed at a rate of 5.5% capitalized monthly, and the entire balance is due in 3 years (Dec 31, 2010). From a cash flow perspective, you have first priority on the business debt since you will be getting paid back monthly over the next three years. The beauty of this loan is that the business pays for itself and has a track history. I?ve been operating the business for four months. The monthly sales average $2,550. After Sales Tax, COGS, Refunds, and Commission, the Margin is approximately $1,070 per month. Other expenses include gas of approx $80, and miscellaneous expenses of approx $50. I?ll factor in $100 per month for maintenance repairs. Therefore, the net cash flow is $840 per month. Using my max interest rate of 12%, the estimated monthly payments for this loan would be $498.21. This leaves me with monthly positive cash flow of $342 and plenty of room to spare should anything unexpected occur. Why this is a good loan: This is a good loan for you for 2 reasons: 1) It is an already-proven profitable business that will pay for itself, and 2) because I don?t need the loan. I already bought the business and could leave my money in the business and be just fine. I?m willing to partner with you and incur the finance costs for the benefit of accessing my cash sooner rather later. I don?t need any income from this business (and therefore do not take a salary) because I have my day job. I am simply building an income-producing asset in my free time, and once all the debt is paid off, I can use the cash flow for other things. Thank you for bidding and I appreciate your willingness to support this venture. |
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