DrJ wrote:Captain Ned is right: there practically is no money available from banks to the small business community. Start-ups are even more of a challenge. For example, I'm trying to get a line of credit for my company. The company has tangible assets far in excess of the line, but I still have to back it personally anyway. What a deal!
Bensam123 wrote:I will have to look more into local services as it's been awhile, but it doesn't really look all that promising. It doesn't really help that I'm like in a no mans land between a smaller business and a medium size business, where the funding I'm looking for seems to be quite a lot for a local investor or funds (such as local microloans through government services), but isn't really a whole lot for anyone on a larger scale. 247k is and isn't a lot of money depending on how you look at it.
Bensam123 wrote:II agree Ned, I'm trying to stay away from scraping together the bare minimum to start my business. 47k of which is for pure non-profitability in the first four months. I wouldn't even take that out unless I completely dive bomb. I have plans to attempt to grab a foothold when my business first opens (a local cash prize tournament) to grab a foothold and get people in the door to start things out. But I do also have about 30k worth of padding I could potentially scrape off that, so I could potentially get away with around 170k if I had no provisioning.
Bensam123 wrote:Pretty much all of what I'm trying to borrow will go into equipment, with the only real sunk costs in rent and manpower. It is technology, which does depreciate quite fast, but if I go belly up in the first year it should still be possible to get 50-75% of the costs back, as long as the bank doesn't do the liquidating. Computer tech usually depreciates with every update cycle of products, which is roughly every two years or so.
Bensam123 wrote:So if I'm approaching the point of going under, I can't choose to liquidate my business and pay back the majority of the loan, then work off the rest of it on my own? I'm prepared for bankruptcy, that's pretty much given as that is what this would turn into if it doesn't work out. I would just rather have a solution that works out for me and the bank then simply giving up and taking the easy way out (not to mention axing my credit for like 10 years).
Bensam123 wrote:"Every estimate you have of the required level of capital to survive until profitability is low."
What do you mean by that? The funding I have set aside for the first four months isn't inlieu of four months of non-profitability, it would last for four months if I had zero sales in general. That could easily be stretched out over a years worth of time if I'm under estimating my cash flows. But essentially I listed four months operating with zero income.
Bensam123 wrote:If I were capable of coming up with the 30% down on the loan, how would I proceed? Do I just contact any bank with SBA backed loans and apply for one? Is there secret sauce?
Bensam123 wrote:Sort of interesting that the SBA does most of the work and the loans themselves are pretty much backed completely by the SBA, so the lender takes little to no risk, yet they're the ones who capitalize on it...
Do lenders pay a fee to the government in order to offer SBA loans?
What lenders would you recommend too?
Bensam123 wrote:I was just pointing out that it seems odd that all the risk associated with it is shoved onto a government service, yet the government doesn't make any real money back on it...
I agree about looking for a local bank. If you have 30%, what are the chances of actually getting a loan? Should I look around? Does my business plan even matter if I have a 30% down payment? Is it possible to get a loan with less then 30%?
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