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Thread: question to business owners?

  1. #11
    whiteworks
    so as you guys can tell I am out of my comfort zone on this deal. usually I can fake it pretty well but this is big. I am pretty sure that I should have the contract and possibly the proposal drawn up professionally. any recommendations on a good contract law attorney in socal area?

  2. #12
    Cole
    If I can ask, what kind of business is it? You might want to speak to a factor and get an Idea what they will charge ...It is generally VERY expensive about 3% per month which is equivalent to 36% per year, however this might be your only option. Like Chump change said you will probably need to provide a "personal guarantee".
    Good luck

  3. #13
    whiteworks
    construction related, I really cant see the finance period running more than 90 days. I guess it will depend on payment schedule.

  4. #14
    HighRoller
    Yime for 'ol Hr to play Devils' advocate. When considering this deal, the FIRST thing you should think about is your exit strategy if everything goes in the crapper. The last thing you want is to be left with a huge note that is tied to you through a personal guarantee. And don't be fooled, unless you are an established Corp, you WILL be signing your name somewhere on the loan papers. That means if the contract evaporates you and all your personal effects will be on the menu for the creditors while you litigate. If you don't have the cash to operate for 6 months in the beginning of this deal, WALK AWAY. There are no guarantees in business, even on paper.
    How to avoid this? Well, get a huge advance from the company you are contracting with. Think of it as a down payment that they would not want to walk away from. Second, if you are not comfortable with the scope of this transaction, WALK AWAY. A secure businessman does not walk into a deal that he feels is biting off more than he can chew in hopes that things work out "right". They rarely do! Third: ask the company to take on the financial risk and contract you to be supervise "their" operation. If you have the technical chops but lack the deep pockets this is the best option. If they refuse, they are probably looking for a fall guy to eat the loss on a high risk endeavor.
    Remember, risk is inverse to reward. A HUGE contract has HUGE financial pitfalls. Are you willing to bet your future on it??????????The best way to get rich quick...is to get rich slow:idea:

  5. #15
    Cole
    construction related, I really cant see the finance period running more than 90 days. I guess it will depend on payment schedule.
    If it is materials for construction what about home depot credit 6-12 months credit deferred....

  6. #16
    YeLLowBoaT
    FYI If its a public works job, financing is a cake walk.
    If it has anything to do with housing, Its going to be very hard to get financing. Comm'l is about the same at this point.( unless its for a very big corperation)

  7. #17
    YeLLowBoaT
    If it is materials for construction what about home depot credit 6-12 months credit deferred....
    have you ever looked at thier prices compared to other vendors? ( or thier intrest rate if its not paid off by them... its 28% I get an offer atleast once a month from them)Thier prices really do suck.

  8. #18
    Cole
    have you ever looked at thier prices compared to other vendors? ( or thier intrest rate if its not paid off by them... its 28% I get an offer atleast once a month from them)Thier prices really do suck.
    Im not in the construction business, so I am not familiar with "retail" pricing of home depot...I dont know the magnatude of the job so I was throwing out ideas. But you are right, if its a major contract he could definetly find better financing!

  9. #19
    whiteworks
    the actual task at hand is somthing that I am completly comfortable performing and do it daily on a much smaller basis. the shear volume of product to be purchased 100% up front is the problem. its all about the cash flow
    HR- I am definatly hearing you on this,

  10. #20
    WishIknew
    Yime for 'ol Hr to play Devils' advocate. When considering this deal, the FIRST thing you should think about is your exit strategy if everything goes in the crapper. The last thing you want is to be left with a huge note that is tied to you through a personal guarantee. And don't be fooled, unless you are an established Corp, you WILL be signing your name somewhere on the loan papers. That means if the contract evaporates you and all your personal effects will be on the menu for the creditors while you litigate. If you don't have the cash to operate for 6 months in the beginning of this deal, WALK AWAY. There are no guarantees in business, even on paper.
    How to avoid this? Well, get a huge advance from the company you are contracting with. Think of it as a down payment that they would not want to walk away from. Second, if you are not comfortable with the scope of this transaction, WALK AWAY. A secure businessman does not walk into a deal that he feels is biting off more than he can chew in hopes that things work out "right". They rarely do! Third: ask the company to take on the financial risk and contract you to be supervise "their" operation. If you have the technical chops but lack the deep pockets this is the best option. If they refuse, they are probably looking for a fall guy to eat the loss on a high risk endeavor.
    Remember, risk is inverse to reward. A HUGE contract has HUGE financial pitfalls. Are you willing to bet your future on it??????????The best way to get rich quick...is to get rich slow:idea:
    NOTE what he said about the 6 month rule!!!! there are a lot of general contractors out there that say 1000 licences are issued every month that gives them a lot of choices. Most of them have their own contracts not letting you make your own just your proposal and EXEMTIONS besure exemt not left out. And last but not least a lot of people try to get you to bid the job for less than its worth and then when you can't man the job they bring in other contractors to help out on your dime. Cover your a** everybody want something cheaper than its worth and they will tell you what you want to hear to get you signed up so good luck.

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