My advise to get a small business loan (credit, lending, borrow)

[Book Lover 21]

I am in small business lending. All day I take applications from people who are wonderful at their profession, but know nothing about how to get a loan for their business. So I thought I would post some tips and maybe they will be helpful for someone.

First, I would sit down with my accountant and really familiarize myself with the financial picture of the business. Nothing impresses a loan officer less than someone who doesn't know the details about their own business. If this really is all Greek to you, bring your accountant with you or conference him/her in on the phone call. This will make everything much easier. If you don't have an accountant, bring all your financial paperwork with you or have it available if you are on the phone.

Second, I would accentuate the positive about your business. The person you are talking to usually knows nothing about your business. Many times, they won't even know what questions to ask you. This information might tip the balance in your favor. For instance, if you just score a new huge contract, tell them about it. If your sales are going up 20% a year, tell them. Tout your successes, don't be modest!

Third, give them your full attention. If we hear a baby crying on the phone or you keep placing me on hold to take other calls, I am less likely to want to help you. Sorry, just human nature.

[oleo]

It's really about cash flow. Where is the cash coming from and where is the cash going. Does the company buy new assets with debt or with their own equity. The cash flow statement is very key, but often misrepresented so it can be hard to grasp what the actual cash flow or liquidity real is. Which leads to...collateral and guarantors. If a bank has the opportunity to service a customer in multiple ways, thus having multiple revenue streams from different products, the bank will be more interested in lending. You gotta have money to make money is pretty much true. On a global level, the amount of current assets of the company + the guarantors needs to be impressive. Nothin like taking a church as collateral to really dampen a banks reputation when the borrow defaults on a loan.

Do you work for a big bank or local? Are you a FA/CA or a marketing guy? Your advise sounds more sales-like than the proof is in the pudding (numbers)

[lynn michaels]

So, you lend money all day and I just so happen to need some! My problem isn't that I don't know what I need it for or how much my problem is I started a new trucking company and have many new business ventures to explore and could be making money even today but I cannot get a line of credit for my new 2 week old business because the truck I need is 20,000 dollars and no one wants to finance a 1988 old truck and my personal credit is too bad to get anything. I cannot understand why I cannot get a 20,000 credit line and secure with business equipment that's worth more than 20,000 even if sold at an auction! It takes too long to get a grant and when you live in the south, if you're a WOMAN you cannot get anything!

Can you help me?

Originally Posted by Book Lover 21

I am in small business lending. All day I take applications from people who are wonderful at their profession, but know nothing about how to get a loan for their business. So I thought I would post some tips and maybe they will be helpful for someone.

First, I would sit down with my accountant and really familiarize myself with the financial picture of the business. Nothing impresses a loan officer less than someone who doesn't know the details about their own business. If this really is all Greek to you, bring your accountant with you or conference him/her in on the phone call. This will make everything much easier. If you don't have an accountant, bring all your financial paperwork with you or have it available if you are on the phone.

Second, I would accentuate the positive about your business. The person you are talking to usually knows nothing about your business. Many times, they won't even know what questions to ask you. This information might tip the balance in your favor. For instance, if you just score a new huge contract, tell them about it. If your sales are going up 20% a year, tell them. Tout your successes, don't be modest!

Third, give them your full attention. If we hear a baby crying on the phone or you keep placing me on hold to take other calls, I am less likely to want to help you. Sorry, just human nature.

[StealthRabbit]

Originally Posted by lynn michaels

...if you're a WOMAN you cannot get anything!

Whoa!! that is the first I've heard that since ~ 1980

Minority owned business startup funding
Business, Financial and Other Resources for Small, Minority, Women-Owned, Veteran, and Other Disadvantaged Businesses
http://www.sba.gov/
...
I could go on forever (almost...)

Have you been to SCORE? http://www.score.org/index.html

Let us know where you are at and we can give you a specific SBDC to go to. These are very helpful and you can get on the website of a nearby center for a wealth of free info. I was really impressed with the WYO SBDC site where I camped for a few hours last night.
Wyoming Entrepreneur: Help for Wyoming Small Business

I find banks usually value depreciable assets at $10 per $100, but I don't know any banks that lend to startups. Check with your local Economic Development Center. We (They) do loans up to $50k for Sole Proprietors. Are you Rural?... If so, the USDA Rural Development can fix you up with about 50 programs to digest.

First use friends and family and angel investors. Locally, We are doing a competition in a couple weeks that awarded $60k, last yr. (As a Jt Venture, not a loan, and the business got 12 professionals to help it be successful!)

[8 SNAKE]

Originally Posted by lynn michaels

My problem isn't that I don't know what I need it for or how much my problem is I started a new trucking company and have many new business ventures to explore and could be making money even today but I cannot get a line of credit for my new 2 week old business because the truck I need is 20,000 dollars and no one wants to finance a 1988 old truck and my personal credit is too bad to get anything. I cannot understand why I cannot get a 20,000 credit line and secure with business equipment that's worth more than 20,000 even if sold at an auction! It takes too long to get a grant and when you live in the south, if you're a WOMAN you cannot get anything!

I'm sorry, but you are deflecting blame here. There are many reasons that you can't get a line of credit right now.

1. You have poor credit
2. You want to spend $20k on a 1988 truck. Any idea what the maintenance on something that old is going to be like? Banks do and know that if you don't have cash reserves, maintenance will sink your ship very quickly.
3. Trucking industry is on its rear right now. Small trucking companies (and even some large ones) are closing every day.
4. Do you have contracts in place for your business, or are you planning to run brokered freight? Without contracts, I can't imagine a viable business model in this economic climate.

[desertsun41]

Originally Posted by lynn michaels

So, you lend money all day and I just so happen to need some! My problem isn't that I don't know what I need it for or how much my problem is I started a new trucking company and have many new business ventures to explore and could be making money even today but I cannot get a line of credit for my new 2 week old business because the truck I need is 20,000 dollars and no one wants to finance a 1988 old truck and my personal credit is too bad to get anything. I cannot understand why I cannot get a 20,000 credit line and secure with business equipment that's worth more than 20,000 even if sold at an auction! It takes too long to get a grant and when you live in the south, if you're a WOMAN you cannot get anything!

Can you help me?

Now that is hogwash. As a woman you have many many many many more opportunities and many more special rights then lets say......ohhhhh a white male.

Do to todays political correctness crap and our lack of free speech anymore I can not even begin to tell you the real facts of who gets loans and handouts and who is turned away.

But I really do give you well deserved credit for taking the bull by the horns in this economic depression and starting up your own company. And for that I do wish you luck.

[Okieinvestor]

Can you direct me on the possibility of purchasing bank owned properties (reo), rehabbing and renting them? How would you structure a loan in this nature? We've had success in doing this within the past year, but it came to a halt when local banks are not willing to lend to anyone. Not even people with assets and a proven track record. Not even people who know this industry extremely well. I could fit into the female category also have a CDIB with the Cherokee Tribe. Basically a SBL to go for the rehab business and/or the rental side. Both will soon be two different entities under two different llc's. My mind is so tired of dealing with these banks, I'm just at a stand still. Can anyone guide me?

[sinsativ]

Okieinvestor, thanks for actually reading the OP's post. This person put a post out here giving some helpful pointers to small business owners about how to apply for an SBA loan. Yes I'm sure that one or two of you have had a personal experience that wasn't all that much of a cakewalk, and you didn't feel like you were being treated fairly. You probably felt like you did everything the OP mentioned, and still didn't get a loan. The OP is posting some TIPS! to people that she has most likely dealt with that have done these things. City Data Forum is made up of people all over, we all have experience and backgrounds of varying degrees, if people would listen to our input, without arguing about the minute exceptions to the general rule, we could probably help the President straighten out the economy, end the war in Iraq/Iran, develop a car that would get 100 mpg, and get the unemployment rate back down to below 3 percent. But instead everyone wants to let a person that offers good advice to 95 percent of the population that that doesn't work for 100 percent of the people. I believe we all know that. It was put very clearly many many years ago,
"You can please all of the people some of the time, Some of the people all of the time, but never all of the people all of the time." So instead of arguing petty little points of insignificance, wouldn't it be a lot better world if we thanked people like the OP for spending their time pointing out some helpful hints to those that don't understand the usefulness of good professional business loans, rather than to argue about "why didnt I get mine then?"

[Okieinvestor]

Thanks sinsativ... I certainly copied all the info and plan to dig deeper and give it my all. I had already started researching some but this is a gigantic head start. I'm just not to clear on what is possible for them to consider. What type of help would I ask for? Payroll, equipment, etc.? Is improvement funds for a reo even possible? This is my battle with the local lenders. They want you to be rich now before you can ask for any amount of money. If I didn't need the money, I wouldn't be asking for it? Thanks for your reply...

[Caa]

Could you tell me if the sba requires collateral for a 50,00 loan-or if so, why do I keep hearing that the sba backs loan and no collateral is required. I must be hearing wrong! I thought the sba was backed by the governament and collateral was not needed. At least that was what we were told by the SBA center in New Orleans. Please set me straight.