Get a loan with low interest rate on small business
"I am going to assume your location is the US. From what I am seeing it is unlikely you will get a loan other than some government backed thing.  You are a poor risk. At 7k/month, you have above average household income.  The fact that all of your income ""is being washed off somewhere"" is a behavior problem, not a mathematical one.  For example, why do you have a car payment?  You should purchase a car for cash. Failing that, given reasonable rent (1100), reasonable car payment (400), insurances (300), other expenses (1000), you should clear at least 4000 per month in cash flow.  Where is that money going?  Here tracking spending and budgeting is your friend.  Figure out the leaks in your budget and fix them. By cutting back, and perhaps working a second job or somehow earning more you could have a down payment for a home in as little as 10 months.  That is not a very long time.   Similarly we can discuss the grocery store.  Had you prepared for this moment three years ago you could have bought the store for cash.  This would have eliminated a bunch of risk and increase the likelihood of this venture's success.  If you had started this one year ago, you could have gone in with a significant down payment.  The bank would see this as a good risk if you wanted to borrow the remainder. Instead the bank sees you as a person as a poor risk.  You spend every dime you make without much concern for the future or possible negative events (by implication of your question).  If you cannot handle the cash flows of regular employment well, how can you handle the cash flows of a grocery business?  It is far more complex, and there is far less room for error.   So how do you get a loan?  I would start with learning on how to manage your personal finance well prior to delving into the world of business."
A financial institution is not obligated to offer you a loan. They will only offer you a loan if they believe that they will make money off you. They use all the info available in order to determine if offering you a loan is profitable.  In short, whether they offer you a loan, and the interest rate they charge for that loan, is based on a few things: How much does it cost the bank to borrow money? [aka: how much does the bank need to pay people who have savings accounts with them?]; How much does the bank need to spend in order to administer the loan? [ie: the loan officer's time, a little time for the IT guy who helps around the office, office space they are renting in order to allow the transaction to take place]; and How many people will 'default' and never be able to repay their loan? [ex: if 1 out of 100 people default on their loans, then every one of those 100 loans needs to be charged an extra 1% in order to recover the money the bank will lose on the person who defaults]. What we are mostly interested in here is #3: how likely are you to default? The bank determines that by determining your income, your assets, your current debts outstanding, your past history with payments (also called a credit score), and specifically to mortgages, how much the house is worth.  If you don't have a long credit history, and because you don't have a long income history, and because you are putting <10% down on the condo [20% is often a good % to strive for, and paying less than that can often imply you will need mandatory mortgage insurance, depending on jurisdiction] the bank is a little more uncertain about your likelihood to pay.  Banks don't like uncertainty, and they can deal with that uncertainty in two ways: (1) They can charge you a higher interest rate; OR (2) They can refuse you the loan. Now just because one bank refuses you a loan, doesn't mean all will - but being refused by one bank is probably a good indication that many / most institutions would refuse you, because they all use very similar analytical tools to determine your 'risk level'. If you are refused a loan, you can try again at another institution, or you can wait, save a larger down payment, and build your credit history by faithfully paying your credit card every month, paying your utilities, and making your car and rent payments on time. This will give the banks more comfort that you will have the ability to pay your mortgage every month, and a larger down payment will give them comfort that if the housing market dips, you won't owe more than the house is worth. My parting shot is this: If you are new in your career with no income history, be very careful about buying a property immediately, even if you get approved. A good rule of thumb is to only buy a property when you plan on living there for at least 5 years, or else you are likely to lose money overall, after factoring closing costs and maintenance fees. If you are refused a loan, that's probably a good sign that you aren't financially ready yet, but even if a bank approves you for a loan, you might not be ready yet either. "You are not ""the economy"". The economy is just the aggregate of what is going on with everyone else. You should make the decision based on your own situation now and projected into the future as best you can. Loan rates ARE at historical lows, so it is a great time to take a loan if you actually need one for some reason. However, I wouldn't go looking for a loan just because the rates are low for the same reason it doesn't make sense to buy maternity clothes if you are a single guy just because they are on sale." If it's possible in your case to get such a loan, then sure, providing the loan fees aren't in excess of the interest rate difference.  Auto loans don't have the fees mortgages do, but check the specific loan you're looking at - it may have some fees, and they'd need to be lower than the interest rate savings. Car loans can be tricky to refinance, because of the value of a used car being less than that of a new car.  How much better your credit is likely determines how hard this would be to get.  Also, how much down payment you put down.  Cars devalue 20% or so instantly (a used car with 5 miles on it tends to be worth around 80% of a new car's cost), so if you put less than 20% down, you may be underwater - meaning the principal left on the loan exceeds the value of the car (and so you wouldn't be getting a fully secured loan at that point). However, if your loan amount isn't too high relative to the value of the car, it should be possible.  Check out various lenders in advance; also check out non-lender sites for advice.  Edmunds.com has some of this laid out, for example (though they're an industry-based site so they're not truly unbiased). I'd also recommend using this to help you pay off the loan faster.  If you do refinance to a lower rate, consider taking the savings and sending it to the lender - i.e., keeping your payment the same, just lowering the interest charge.  That way you pay it off faster. "Dave Ramsey would tell you to pay the smallest debt off first, regardless of interest rate, to build momentum for your debt snowball.  Doing so also gives you some ""wins"" sooner than later in the goal of becoming debt free." A lot of this example is idealistic and the analysis stops right at the point the loan is issued.    If you use generous interest rates you could just skirt by the bare minimum debt service coverage ratio for an asset-backed loan if you found a lender to approve it.  However, he doesn't address any of the issues of running a business that will be insolvent if expenses rise more than about ~2% above the monthly average in a given month (those pesky 3-pay period months; equipment repairs; heating/cooling in winter/summer; etc.), or you have a similarly small sag in sales (selling dirtbikes in January?).    Most companies doing LBOs have skin in it, and a plan to make the company more valuable, not run it exactly the way it is. This allows them to either acquire more debt capital than just a percentage of the collateral -- and so they can finance capital projects to improve the business, deal with fluctuations in cash flow, and/or implement plans to increase the free cash flows above how it was running previously.  This site's advice is a bit like teaching someone the basics of how to take off in an airplane, and then telling them they're ready to fly. Since you are talking about a small firm, for the long term, it would be advisable to invest your money into the expansion - growth, diversification, integration - of your business. However, if your intention is to make proper use of your earnings in the short term, a decent bank deposit would help you to increase the credit line for your business with the benefit of having a high enough liquidity. You can also look at bonds and other such low risk instruments to protect your assets. Consider the following scenario at a small business: As a business owner I have 10k in the bank at the moment. I have a one time expense of 4k that will not directly impact the growth of my business. I can choose to pay the 4k out of the 10 in the bank and then put the rest towards business growth. Assuming a 10% annual return on capital at the end of this transaction I am left with $6,600. Now if instead I chose to pay the 4k with a business credit card I have that only carries a 7.9% interest rate what would happen is that I incur a 4k balance that I have to pay off in a year and put 10k towards my business. Now, this is a simplified case that does not take into account the effective interest on the card and the minimum monthly payments. That being said, what happens in the end of the year is that I owe $4316 to my credit card but I now have 11k  in the bank, due to business growth. That leaves me with $6,684 after a year's worth of operations, which is better than my original $6,600. This is a small scale scenario though, but the basic idea is that if you can put the money towards growth that is better than the interest you are paying to the card, you win. The risks of course include missing a payment and incurring a penalty, not being able to grow your money at the rate you thought, and so on. Hope this explains things a bit. You want to regard loans as short-term, last-ditch, desperate effort for when you get caught in a bad spot and have a good, workable plan to get out of it.  You don't ever want to start a business on borrowed money, unless you're an expert in the field of your business with a lot of experience in running businesses in that sector.    The best thing to do is to get a job and save all your money to start a business that will make you enough money to start the business you really want.  You may need to start a business to get the money to start a business to get the money to start a business to get the money to start the business you want.  Whatever it takes, really.  Just do it all yourself.  Don't accept loans or favors.  Also, the whole world (except Amazon) is moving from brick-and-mortar to the internet, and you're trying to move internet sales to brick-and-mortar.  It's a little backward-looking.  It could work, but there's probably some research you could do to test the feasibility of this idea.  You need to be creative in designing effective, science-based ways to predict your success or failure.  Don't worry about licensing issues with wholesalers.  That's not something to be worried about, at this point. A better idea if applicable is to borrow 50K (max allowed) to buy a house and pay interest to yourself instead of a bank. And none of that origination and closing fees lost to the lender Zero percent interest may sound great, but those deals often have extra margin built into the price to make up for it. If you see 0%, find it cheaper somewhere else and avoid the cloud over your head. This is not a supply side issue (bank), but a demand side (small business) and there is simply no demand.  Bank CEOs have been repeating that there is just no interest in borrowing right now, they would love to lend, but businesses are not taking the loans.    Businesses are trying to firm up their balance sheets and with concerns of a recession looming most small business owners don't want to borrow and risk defaulting. "I started with lending club about a year ago.  I love it.  It has been insightful.  Off topic, but I am in a loan to a guy who make 120K a year and is regularly late and has a pretty high interest rate.  Crazy. You gain some economies of scale by going with a bigger note.  I have $100 notes that I get hit for 2 or 3 cents for a fee, where $25 notes are always a penny.  However, I don't think that should be your deciding factor. I scale my note purchases based on how much I like the status of the borrower.  For example, I did $100 (which is currently my max) for a guy with a reasonable loan amount 16K, a stable work history (15+ years), a great credit history, and a great interest rate (16.9%).  If one of those things were a bit out of ""whack"".  I might go $50, two $25.   I prefer 36 month notes, really 5 years to get out of debt?  It is unlikely to happen IMHO. Keep in mind that if you invest $100 in a loan, then you get one $100 note.  You can't break them up into 4 $25 notes.  For that reason, if you are likely to want to sell the note prematurely, keep it at $25.  The market is greater.   I've had a lot of success using the trading account, buying further discounted notes for people who want out of lending club, or get spooked by a couple of late payments and a change in billing date.   Another advantage of using the trading account is you start earning interest day 1.  I've had new notes take a couple of weeks to go through.   To summarize: There are some other things, but that is the main stuff I look at." "Just to argue the other side, 1.49% is pretty low for a loan. Let's say you have the $15k cash but decide to get the car loan at 1.49%. Then you take the rest of the money and invest it in something that pays a ~4% dividend (a utility stock, etc.). You're making money on the difference. Of course, there's no guarantee that the underlying stock won't drop in value, but it might go up, too. And you'll likely pay income tax on the dividends. Still, you have a good chance of making money by taking the loan. So I will argue that there are scenarios where taking advantage of a low interest rate loan can be ""good"" as an investment opportunity when the risk/reward is acceptable. Be careful, though. There's nothing wrong with paying cash for a car!" "A ""true"" 0% loan is a losing proposition for the bank, that's true.  However when you look at actual ""0%"" loans they usually have some catches: There might also be late payment fees, prepayment penalties, and other clauses that make it a good deal on average to the bank.  Individual borrowers might be able to get away with ""free money"", but the bank does not look to make money on each loan, they look to make money on thousands of loans overall. For a retailer (including new car sellers). the actual financing costs will be baked into the sales price.  They will add, say, 10% to the sales price in exchange for an interest-free loan. They can also sell these loans to an investment bank or other entity, but they would be sold at a deep discount, so the difference will be made up in the sales price or other ""fees"". It's possible that they would just chalk it up to promotional discounts or customer acquisition costs, but it would not be a good practice on a large scale." "I've been taking all the cheap fixed-rate debt banks would like to give me lately. What Rate? In practice I find the only way I get a low-enough rate on a longish-term fixed-rate loan is to use collateral. That is, auto loans and home loans. I haven't seen any personal loans with a low enough fixed rate. (Student loans may be cheap enough if they're subsidized, I guess.) Here's how I think of the rate: If you look at https://personal.vanguard.com/us/insights/saving-investing/model-portfolio-allocations , the average annual return on 80% bonds / 20% stocks is 6.7%, with worst year -10.3%. That's a nominal return not a real return. If you subtract taxes, say your marginal rate (the rate you pay on your last dollar of income) is 28% federal plus 5% state, then if you have no tax deferral the 6.7% becomes about a 4.5% average, with reasonably wide variation year-by-year. (You can mess with this, e.g. using tax-exempt bonds and tax-efficient stock funds, etc. which would be wise, but for deciding whether to take out debt, getting too detailed is false precision. The 6.7% number is only an average to begin with, not a guarantee.) Say you pay 4.5% on a loan, and you keep your money in very conservative investments, that's probably at least going to break even if you give it some years. It certainly can and sometimes will fail to break even over some time periods, but the risk of outright catastrophe is low. If your annual loss is 10%, that sucks, but it should not ruin your life. In practice, I got a home loan for close to 4.5% which is tax-deductible so a lower effective rate, and got an auto loan subsidized by the manufacturer for under 3%. Both are long-term fixed-rate loans with collateral. So I was happy to borrow this money paying about a 3% effective rate in both cases, well below my rough threshold of 4.5%. I do not, however, run a credit card balance; even though one of my cards is only 7% right now, 7% is too high, and it's a floating rate that could rise. The personal loans I've seen have too-high rates also. Thoughts Overall I think using debt as a tool requires that you're already financially stable, such that the debt isn't creating a risky situation. The debt should be used to increase liquidity and flexibility and perhaps boost investment returns a bit. Where you're likely to get into trouble is using debt to increase your purchasing power, especially if you use debt to buy things that aren't necessary. For me the primary reason to use debt is flexibility and liquidity, and the secondary ""bonus"" reason is a possible spread between the debt rate and investment returns."