Saturday, July 10, 2010

It's all about the Money, Honey

It's been an interesting month and I've learned a great deal about money in regards to both funding a book company and trying to get a loan. The loan was a total bust. If you want a small business loan you need one of two things: 1 - lots of collateral and securities or 2 - an existing business of 3+ years with lots of already earned success. Most likely you don't fit either, as I surely don't. Since I don't there was only one loan I could logically apply for: an express small business loan with Superior financial Group. Verdict? I filled out the pre-qualification loan and was immediately given the lingo "CONGRATS! You may qualify for a small business loan!" It then went on to tell me to download the PDF application and send it in. Great! So I filled out the application and the day before I was going to send it in I got a rejection letter. DENIED! Why? "insufficient lender matrix score." WTF? I looked this up and it pretty much means that while I have good credit, it's not enough. The reason it's not enough is because I have no legal business experience. Again, if my business was registered a year prior and the bank account was opened back then, this would probably not be a problem.

The main problem is that I didn't know any better going into this. A small business loan is nice, but why do I need a small business loan? I have a day job, make good money and shouldn't have to defend my start-up business? After all, I am entering the field to sell a risky product and should I fail (regardless of having a day job and still being OK) my books are for the most part worthless (I mean, what's a lender or bank going to do with a stack of books).

Sort of a run-around and waste of time. In the end, luckily, my parents are loaning me my minimum to keep things moving. And my minimum I don't mean anything close to small change. While I have put and will continue to put up money for this book, galley and books cost a lot of money and if nothing went through I would be screwed.

I looked into a personal loan through one of my college's credit unions. 18% APR! WTF? But they have a credit card that goes as low as 7.9%! WTF? Most credit cards give 1-3 year deals better than this, which in turn,. is a better loan.

I don't think I'm going to look into this any further. If not for my parents I would be forced to, but this was a total waste aside from the educational value which is debatable. Just another reason to register your business and open your business checking as soon as you possibly can.

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