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My partner pulled out of our deal literally DAYS after I signed the lease, purchased equipment and re-located to start our business. In retrospect, I am glad because I have discovered his integrity level is not as high as I thought. HOWEVER, I have opened and begun accepting customers (fitness business) and figured that my customers are my biggest source of capital--however, expenses are piling up fast and I need $5000-$10,000 quickly. All friends and family sources are exhausted as are my personal savings. Any ideas for finding someone for a small investment QUICKLY and how much return do I need to offer them?

Thanks for your time.

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If you have equipment paid for and having some paying clients already, then why not use that and go to a credit union that you are a member of for a loan? – James Black Dec 27 '09 at 14:45

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up vote 4 down vote

One small advantage to being at the very bottom, is that there's leverage to negotiate things. After all, if you can't survive to profitability, everyone loses: you, suppliers, landlord, and all your other customers and creditors.

If I were in your situation, while searching for capital, I would put feelers out for a good small business attorney who could have a few conversations with creditors sufficient to allow for things like a temporary rent abatement, a break on your equipment payments for a few months, and like that.

To get some money, you'll have to come up with a pro-forma in any case. If profitability is really, demonstrably, around the corner, creditors might be willing to abate debt for a shot at repayment.

One thing I would not do, however, is try to commence these negotiations myself. Say the wrong word, and you have breached the contract. You don't want to get evicted before you get the chance to right your ship. Call a lawyer, explain the problem, ask what to do. This is strictly for your information. I am not your lawyer.

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Wow look. Actual advice! Good advice as well. I agree that a SB attorney should be a good step. I don't have much 'debt' as most people know it. I have rent and utilities. Everything else is totally paid for... – Kit Moss Dec 27 '09 at 7:17
up vote 1 down vote

So you have everything you need to run the business, but you have bills to pay? Or do you have suppliers holding out for payment? Can you look to those you owe money? Be upfront about your partner leaving and try to work something out.

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I recommend reaching out to a business advisor from SCORE. From their web site: "SCORE "Counselors to America's Small Business" is a nonprofit association dedicated to educating entrepreneurs and the formation, growth and success of small business nationwide. SCORE is a resource partner with the U.S. Small Business Administration (SBA)."

We are using a mentor from SCORE for our start up and have found this to be a terrific resource.

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