15 years
You have 100 grand and know people willing to lend you more? What do you need a bank for? :confused:
Possible to open a Hostel w/ bad credit?
Start a Hostel
Hi,
I have been in the hospitality industry for about 4 years. I would like to open my own hostel but have some hurdles to get through. My biggest concern at the moment is getting a lease to a facility. I HAVE BAD CREDIT! Will I be able to overcome the barrier when trying to lock down a location?
I don't know if this helps but I have a little over 100 grand myself to get started and the rest of my funding I can pull from close associates.
What can I do? What have you done?
- Comments
15 years
^exactly as Santa Klaus says. Who needs a bank. Just make sure you have a good lawyer to set up a partnership agreement or corporation for shares to keep all partners knowing what they get and don't get.
15 years
Please allow me to clarify. I am NOT trying to go to a bank for money. I am concerned about QUALIFYING for a LEASE on a property. Being that I haee bad credit will it be possible to get a lease to a property I would be potentially interested in?
15 years
Please allow me to clarify. I am NOT trying to go to a bank for money. I am concerned about QUALIFYING for a LEASE on a property. Being that I haee bad credit will it be possible to get a lease to a property I would be potentially interested in?
I suppose you have a bad credit as either you or your company have no previous record, business experience in running hostels, etc.
Go for rent as a first step, with an enclosure that you have the right to buy the property on a prefixed price within a certain time. By this contract I'd start on, aim for the credit in let's say two years (within the enclosure deadline but definitely after the requested time by the bank) and then you already have a well running, experienced business with company reports available and the enclosure ensures that you won't be ripped off by the seller of the building when you want to lease it from the bank. With all this you can walk into the bank and ask for the lease. I doubt they would complain by then! ;)
15 years
Try negociating a security deposit on the lease if your landlord is worried about your credit or the possible success of the business. Find out how long the landlord thinks is necessary to find another tenant and fill the vacancy then give him a deposit for that timeframe.
If you are a corporation, he may ask for a Personal Guarantee. It is quite common for start-ups to do this but make sure that you have a way out of the personal guarantee early whether it be some timeframe passing before the guarantee expires or monthly deposits into a security deposit fund; when the fund reaches the amount the landlord is happy with, your personal gaurentee is then voided. Also include a "good guy clause" in case your business does not go as planned. This way you can get out of the lease personally without personally going bankrupt.
With leases always remember absolutely anything and everything can be negociated.
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