I'm 16 and have a company. Bank loan possible?

[Double_Diamonds]

Hey guys, I'm 16 years old. I live in minnesota, and run a Sole Proprietorship: M J Walsh Services. Basically, I buy and sell electronics.

Now, I'm wondering if it is legal, or possible for me to get a bank loan. I want to get one, in my companies name (yes I'd still be liable, sole proprietorship) for $2500. I would use this to buy Nanio Compactos (like nanos) in bulk before the opportunity is gone. I have a good wholesaler, and a trusting small town bank.

The problem arises here: I'm a minor and I don't have a lot of account activity with the bank. I do use both my regular and business checking accounts on a regular basis. For about a week, they were overdrafted and I had to pay about $10 in fees. Also, my account balances are pretty low.

What do you guys think? If it's not possible, any alternate ideas?

 

[Bible_Belt]

this is not legal advice

yes I'd still be liable

Actually, no. As a minor, you cannot enter into a non-voidable contract. The business world will not be very friendly to you until you turn 18 or you operate through someone who is of legal age. But fwiw you are certainly very industrious for a 16 y/o and will probably be very successful in life.


http://en.wikipedia.org/wiki/Voidable_contract

If a minor were to enter into a contract with an adult, the adult would be bound by the contract, whereas the minor could choose to avoid performing the contract.

 

[g g g unit]

Double_Diamonds cant you just get one of your parents to take the loan out for you or anyone else you know thats over 18 it sort of removes 99% of the bother then. ciao

 

[diablo]

Hey guys, I'm 16 years old. I live in minnesota, and run a Sole Proprietorship: M J Walsh Services. Basically, I buy and sell electronics.

Is M J Walsh Services an actual company, registered with your Secretary of State's office, or is it a name you came up with for a non-taxpaying business venture? As you're a minor, this is moot anyway, but assuming you weren't then you'd have to get a personal loan with your signature for 2500 if the business isn't legal. If it was legal, you'd have to go in and find out what requirements you'd need to meet in order for your business to take the loan out. Best bet is to go to the bank anyway and explain what it is you need, propose a method of paying it back, and bring your parents (or someone else who would be willing to cosign and take responsibity for the debt if you default on it...)

 

[DrMetallica]

Is M J Walsh Services an actual company, registered with your Secretary of State's office, or is it a name you came up with for a non-taxpaying business venture? As you're a minor, this is moot anyway, but assuming you weren't then you'd have to get a personal loan with your signature for 2500 if the business isn't legal. If it was legal, you'd have to go in and find out what requirements you'd need to meet in order for your business to take the loan out. Best bet is to go to the bank anyway and explain what it is you need, propose a method of paying it back, and bring your parents (or someone else who would be willing to cosign and take responsibity for the debt if you default on it...)

A sole proprietorship doesn't have to be registered with the SoS's office. A sole proprietorship is just someone who decides to start a business, just like that. No offical paperwork involved, and the business's net income gets placed onto the income line of his 1040. If he wants to keep his business name though, he should get a certificate of assumed or fictitious name. But Bible Belt is correct, he will not obtain a bank loan as a minor since any contract he enters into is voidable by him.

 

[Shiftkey]

I don't think banks give out loans for that little amount unless it's a credit card.