It's alright. I already knew most of what is being said here. I was just hoping there was an alternative route lined with gum drop buttons I hadn't heard of yet. The SBD counselor I talked to said a lot of what you guys are saying too.
I've been looking at alternative routes, such as crowdsourcing. It is a really cool idea and I wish I could leverage it more, but since my business is on a local level I can't really up sell that to a bunch of people. I could sell advanced memberships as some of you are suggesting, but that wouldn't generate nearly enough money to cover the 30% down and I would more then likely be over selling my services.
I 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.
The busienss I'm trying to start has huge potential for social impact and could potentially turn into a national chain if everything works out (which I'm sure it wont). It sounds lofty, but there really is very little competition in what I'm doing and no one is trying to capitalize on it besides little 'mom'n'pop' style establishments. The few of which I've seen are poorly managed and have no direction.
I am unfortunately quite early into my life, so I don't have the assets I can liquidate as you suggest DrJ. If I had a house, car, yacht, 401k I could put up against the loans then I would and banks would be more then likely to fund me, but I don't. About the best and seemingly only option I have is to work for the next 3-5 years to save up the 30% down just to get my business off its feet and then go from there. This is all eventually to fund another business, with even loftier goals, but of which there is no hope of me ever finding funding for unless I do it myself.
Ludi I've looked into such options and my local city had a fund setup for tourism, but that was recently abused. There was supposed to be a golf course resort put in, the city dumped quite a bit of money into infrastructure upgrades and the resort backed out. So now there is infrastructure in the middle of no where that no one uses. Needless to say, they aren't too interested in funding something else.
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.
Yup, I do have a contingency plan. 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.
I have considered the option of getting as many credit cards as possible, taking out whatever I can get in loans, finding companies that give out equipment credit (buying equipment on in house credit), maxing it all out and praying, but that's something I rather stay away from as it may not be conducive to my future.