Financial Statement Laundromat Essay

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Assignment 4: Financial Statement Analysis Dr. Kerry Lanza Entrepreneurship & Innovation (BUS-521) February 26, 2012 Discuss the sources of funding for the new venture and the rationale for using each source. To cover the majority of expense of startup, the owner will invest $80,000, the owner father will invest $30,000 and the Small Business Administration will provide a Basic 7 (a) loan for the amount of $125,000. The loan will be provide at a rate of 5.5% and will be paid out in five years of operation. Monthly loan payment will be $2200.00 paid with $25,000 revolving line of credit and a business Platinum Visa Card with an ARR of 10.75% both provides by Well Fargo Bank. The U.S. Small Business Administration's Basic 7(a) Loan Guaranty serves as the SBA’s primary business loan program to help qualified start-up and existing small businesses obtain financing when they might not be eligible for business loans through normal lending channels. It is also the agency’s most flexible business loan program, since financing under this program can be guaranteed for a variety of general business purposes. Loan proceeds can be used for most sound business purposes including working capital, machinery and equipment, furniture and fixtures, land and building (including purchase, renovation and new construction), leasehold improvements, and debt refinancing (under special conditions). Loan maturity is up to 10 years for working capital and generally up to 25 years for fixed assets. SBA offers multiple variations of the basic 7(a) loan program to accommodate targeted needs. Small loans have a maximum guaranty of 85 percent. A loan is considered small if the gross loan amount is $150,00 or less. For loans greater than $150,000, the maximum guaranty is 75 percent. Discuss whether or not the venture intends to accept government grants or guarantees as part

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