Small business start up loan?

Question

Most places I have looked will only give a loan for an existing business. Where can I get a start up loan from a reputable bank? I have a detailed business plan already...I just need someone to present it to.

Answer 1

The business of lending is a dense one and should be researched properly. To get started, I suggest contacting the Small Business Administration (SBA). Entrepreneur also offers a great site dedicated to money & finance – see below for both.

Research, research, research – this cannot be stressed enough. Read as much as you can about the process. Here are some book titles that are relevant:

* How to Get a Small Business Loan: A Banker Shows You Exactly What to Do to Get a Loan (Small Business Series, No 1) by Bryan E. Milling
* The SBA Loan Book: Get A Small Business Loan--even With Poor Credit, Weak Collateral, And No Experience by Charles H. Green
* The Insider's Guide to Small Business Loans by Dan M. Koehler

There are plenty of free informational resources out there. Check the source box for links to articles.

Hope that helps! I wish you much success & happiness in all your ventures!

Answer 2

Sorry chica. Most banks especially big banks are not interested in making startup business loans. Try going to a credit union instead. You first have to join the credit union but it's usually pretty easy these days. You could also tap angel investors for some start up funds. I've put a link to a website that has a list of angel investing organizations. It's professionally done and doesn't reek of spam and pop-ups like some sites. I also forgot to mention, that since you are a woman you are eligible for the HUB (Historically Underutilized Business)program. This is a govt program that focuses on minority or women owned businesses. They may be able to help you. I believe most of the HUB programs are based at state universities business schools but I'm not sure if that's true everywhere.
If all else fails, save up your own money or ask family and friends for a loan.

Good Luck!

Answer 3

Hi Modest Mama,

Congrats on your new baby! I have a 2 year old myself and she is the joy of my life.

Anyhow, down to business.

There are several ways to get financing for a new business. Probably the most widely used option for obtaining start up capital is for the borrower to collateralize the equity in their personal residence or any other type of real estate that they own.

The terms are always more favorable to finance your business with real property. The interest rate is lower, you can have interest only, fixed and multi-term repayment options and the closing costs can often be payed by the lending institution. Once your business is in effect for two years (from the date you filed your articles of incorporation with the state), you will be able to "re-brand" your loan directly into the business's name.

Now,

If you do not own any real estate, you will have to get real creative to get funding for your business. The SBA may be able to help you, but the SBA only guarantees that a certain percentage of your loan will be repaid to your bank should you default on your loan. What that means to you is that you will still have to qualify for the loan without the revenue that you expect to generate from your business. That is of course unless this is an aquisition purchase of a business - meaning that you are simply taking over another persons business. In that case, you can count the revenue from the business on the application for the loan.

Here is the bottom line. You have to call a small business banker at your local bank. Once you answer some basic questions, they will tell you right away what your likelyhood of financing is. Also, if the banker shuts you down right away, it doesn't mean he doesn't like you, or that he doesn't think your business will be profitable. He just knows the underwriting procedures so well that he can tell you right away if the SBA will help fund you.

As always, you can call me at my branch to talk it over.

813-681-2866

Have this SBA form filled out and ready to discuss:

http://www.sba.gov/sbaforms/sba413.pdf...

Good Luck!

Frank

Answer 4

Most lending institutions would like to see you put up some of your own capital to start up. They want to feel that you have something to risk besides them, thus this will make you work harder to succeed. You should have a little nestegg of your own, plus whatever you can borrow from relatives or friends. With a good plan, and some investment of your own, most banks should be willing to help you, or at least point you in the right direction. There are a number of plans available to assist minorities, women entrepreneurs, etc.

Answer 5

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Answer 6

Go to the small business association. They should be able to direct you if they will not finance your business.
Beverly