Investors - I Am Looking For Advice
I own a small business in Fort Worth. I have been running this business for around 10 or so years and doing well.
We survived the recession and are coming out of it stronger than expected.
I basically buy and sell equipment (both new and used) and resell this equipment world wide.
Our financials look good. Besides a few private and public loans we don't owe much money. Credit score, etc is all good.
I have quite a few machines in inventory. We always have had a large selection.
Im looking for a way to use this equipment in inventory as collateral on loans. Perhaps a loan of 50% of the machines values and then repaying that back plus interest when the equipment sells. Generally equipment sells within 30 - 90 days.
I am trying to raise funds to expand the business. Our bank doesn't want to give us a loan until they see 3 months of working capital cash in our account for at least 3 months (about $100,000) which is kind of difficult because in that time, i could probably make a lot more money with the $100,000 then i could with the loan if i waited the 3 months. Ive talked with other banks and they basically told me the same thing. I have about $200,000 in inventory (our costs) so, holding $100,000 for 3 months would probably cripple my business.
My idea, like i said, is too look for investors willing to give me about 50% the retail value of the equipment. Once we sell the equipment, i would pay back the loans.
I do have about 6 - 12 family, friends, and acquaintances that have been working with me over the years but, they are limited to only small investment. I'm not sure where else to find investors. Plus, everyone hates borrowing from friends and family.
Generally when i borrow from them, i fill out a promissory agreement and we both go to the bank and have it notarized. I then deposit the investors check and give them original copies of the contract (which has machine serial number, etc), a copy of deposited check and original bank receipt. if placing a lien on the equipment is cheap and quick then i would be willing to do that too....