The applicant here wants to borrow one hundred thousand dollars for a small business he wants to get off the ground. He needs the 100 thousand to buy equipment, tools, and truck. He wants to launch his own carpentry and finishing business Dayton, Ohio, and he wants the business to be in full swing no later than the spring of next year. The business loan he wants here is very conservative in that he is not planning to hire employees and he is not planning to lease or rent a store front space. He wants to manage and run his business out of his garage for the time being.

As you will read, this applicant has over 20 years experience in carpentry, custom design, and contracting. Unfortunately, like so many borrowers these days, our applicant has a poor credit rating. Now I will present his application for you. I have changed his name and the names of all individuals, companies, and entities for privacy purposes, but the details of the loan and his business plan are here to learn from. In some cases the grammar and spelling were fixed for the Internet readers that want to learn something for research purposes, and some areas of the application have been paraphrased.

Application for $100,000 Business Loan in Dayton Ohio

Please tell us a little about yourself and why you need this business loan? – Hello there. My name is Dan Watson and I have been a carpenter for 23 years now and I am 46 years of age. I have been predominately working in home construction, but have done work in master carpentry as well, making custom banisters, and custom work on higher-end homes. I have built home for some celebrities as well. I will not disclose their names for the sake of privacy – I’m sure you understand.

I want to apply for a small business loan for around 100 thousand dollars, and I would like to receive the money no later than this coming March. I want to borrow enough money to buy a new work truck, some more tools, and a small amount of local advertising, just to get some jobs and the business started. These would be humble beginnings of course, but we all have to start somewhere. I need a diesel powered truck so that I can haul materials, and pull a trailer if need be.

I already have some leads on some work I can get next March, so this is why I need the loan approved before that time. I assure you that making the payments will not be an issue in the slightest.

Do you already have some prospects to sell your products or services after you are funded? – I have worked in Dayton, OH my entire adult life and I have many connections in the construction, contracting, and carpentry industry here. I have a very good reputation so finding clients and companies to work for will not be a problem.

I should have started my own contracting company a long time ago, but I always had the good fortune of getting steady work as a laborer working for other contractors. I suppose that maybe I lacked ambition along the way. Regardless – I’m starting now, and I’m very charged up about it.

Do you have any collateral for this loan? – In this case, since the biggest purchase I will me making is a $60,000 dollar work truck, the truck would be the only security on the loan. But to answer your question straight….no, I do not have any collateral for this loan.

Do you have a co-signer for this loan? – No, I do not wish to use a co-signer for this loan. I will not except a co-signer – period.

Do you have a partner, or partners in your small business? – No. I would never go into business with a partner. That is a recipe for disaster.

Have you ever claimed personal bankruptcy in the past? – No, I have never claimed bankruptcy and don’t ever plan to. I do have a poor credit rating due to my last marriage.

What is your marital status? Married, Single, Divorced, Common-Law? – I have been married twice in the past. I was recently divorced from my second wife of three years. The divorce was finalized two months ago.

If you have ever been divorced, how much money do you pay in alimony and/or child support? – I have a total of $1500 in alimony and child support payments each month.

Do you own a home? – Yes. I own a mobile home and I live in trailer park in Dayton. My mobile home is a double wide trailer and it’s only 2 years old. It’s in mint condition and I keep good care of my property.

If you have equity in your home, would you be willing to use that equity against this business loan for the lender’s security? – No. I would use the truck as the security. Read above.

What is your age? – I am 46 years old.

What is your sex? Male or female? – Male

How long have you lived at the address you are currently living at? – I have lived in this trailer park for two years now.

Do you currently have employment, and if so, please provide the name of company? – I currently work for (name removed) Construction, which based in Cleveland. They have offices in Columbus and Cincinnati as well. I have been working for them for 7 years now.

What is your monthly take-home after taxes and deductions? – I take home $3200 every month after deductions. $1500 of that goes to my past wife’s and children, leaving me with $1500 left for food, fuel, utilities, and entertainment.

Have you ever owned, managed, or started a business in the past? – No on all three accounts, but have supervisory experience working for the builder I work for now. If your question is whether or not I can manage employees and manage a company, that answer is most certainly yes!

Have a recently applied for a small business loan with another lender? – No. I am still doing some research, and considering using an out-of-State lender that approves loan over the Internet. I know that I will be paying a higher interest rate than other borrowers and I fully except this as fact. However, I need the loan quickly, and without any real hassles throughout the process.

Have your checked your credit rating in the last 6 month, and is your credit rating excellent, good, fair, or bad? – My credit rating is very bad, because of my last marriage breakdown which started over a year ago. We both started spending way more than we could afford. My ex-wife especially. She bought things just to sink my credit rating. We had a joint account, and we had joint credit cards, and the primary debtor was me. So when we could no longer pay our bills it was my credit rating that was so severely damaged. My FICO is currently below 400 (I’ve been told anyway)

Loan Agreement for $100,000 Business Loan in Dayton Ohio

Our borrower was approved with a private lender found at California Loan Find, and the terms of the loan agreement are as follows;

- $100,000 Principal Loan
- 10 Year Term
- APR of 14%
- Payment schedule to be monthly

California Loan Find (AKA CLF LOANS) has been known to find loans for borrowers all across the United States, and they don’t even charge a fee for finding the loan. All you do is use their web site to find lenders that will lend you the money. Usually this are private lenders because traditional lenders are so tight with their money these last few years. The CLF Loan site is not laid out in a super easy fashion, but if you use their search tool, you can usually find a private lender fairly quickly that may approve your financing.

This private lender is making allot of money in interest on this loan, so they are quite happy with the agreement. The borrower is happy with the deal because he has now started working for his first clients and customers in the Dayton area. He is well on track to pay off his loan in the next ten years – as per the terms.

Calculation of $100,000 Business Loan in Dayton Ohio

To calculate the numbers on this loan agreement we used our calculator. This is the equation we used for the small business loan;

- Principal loan amount = 100000
- Length by Mo. = 120
- APR = 14
- Sched = monthly

The payment plan for the small business loan is presented below.

Payment Plan for $100,000 Business Loan in Dayton Ohio

- Total monies to be paid back to private lender = $170,576.39
- Total amount of interest paid on the loan = $70,576.39
- Number of payments to make on loan = 120
- Monthly payment amount = $1,402.00

As you can see, at a loan payment of $1400 a month, alimony, and child support all together the small business owner and debtor is looking at $3000 before he pays for fuel, food, utilities, licensing, clothing, etc. His small contracting business would have to be making at least $5000 profit each month. No problem for a qualified and licensed contractor, assuming he gets the business he mentioned above in the loan application form.

Having a Bad Credit Rating for this Business Owner

Because our new business owner/borrower/entrepreneur/debtor had such a bad credit rating, he ended up paying the private lender 14% interest on the $100,000 dollars in small business capital. This is why these payments are as high as they are, and this is why he is paying so much interest over the ten years. In this lender and borrower deal, you can see why it is so important to keep your credit rating in good shape. There are very few business models these days that can sustain growth and NOT have a line of credit, a business credit card with a healthy sixed limit on it.

Because our debtor in Dayton had the bad credit score, he is paying too much for the loan, but he feels it is worth it to get his small business up and running now, instead of later. This is the exact reason why borrowers borrow on time. I would have to call this debt a “good debt”.

Our borrower has taken action and taken a risk to forge his own way in life. Being self-employed has it’s pitfalls and stressors for sure, but if you manage your business properly, you can eliminate most of down sides. Being your own boss is a fantastic way to live life, and in my opinion, it’s the only way to live life.

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A LOAN CALCULATOR; Enter your loan amount, how many years, the interest rate, and payment frequency (14 for biweekly, 30 for monthly, 7 for weekly. Very helpful so you know exactly what the loan will cost you in interest payments and you will know the total COB (cost of borrowing).

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