Business loan

[grcthird]

Anybody have any input on the correct way to go about getting one? The property, building and equipment is essentially worth the asking price so the colatteral is there. This is one thing I have no experience with and need some opinions from folks that do.

 

[ridered3]

Can't help ya much here either other than to look into a SBA (Small Business Administration) loan. Would have lots of info here:

http://www.sba.gov/loanprograms

 

[InDaShop]

yeah you need to go to SBA and get an approval, once you have the approval, you can then go court banks for borrowing.
Banks don't tend to loan on anything commercial unless SBA signs off on it. So the bank gets to cover their ass.

Don't think about the "collateral" the way you would think of it the way they would. They are in the money lending game, not the owning of what you think has value or is valued for. They will look at collateral as firesale prices if not lower, for if they have to cut their losses on a default of the loan.

 

[Elliott]

Buy a tanning bed. Try to burn yourself then but a dot on your forehead!!! Unfortunately!!!

 

[Trailabite]

Look into getting Business Plan Pro - It will help you develop a business plan, which you are going to need before anyone talks to you about loans.

 

[ridered3]

yeah you need to go to SBA and get an approval, once you have the approval, you can then go court banks for borrowing.
Banks don't tend to loan on anything commercial unless SBA signs off on it. So the bank gets to cover their ass.

Don't think about the "collateral" the way you would think of it the way they would. They are in the money lending game, not the owning of what you think has value or is valued for. They will look at collateral as firesale prices if not lower, for if they have to cut their losses on a default of the loan.

Very true statements about collateral. Lenders still trying to recover their from all the lost collateral in the housing markets.

One more thought, very rare to find 100% financing these days. Be prepared to put down at least 15-25% of the loan value.

Can also see if a bank will allow you to put a working line of credit into the loan as well. Will help free up some cash at a decent rate versus having to come up with your own capital.

 

[ridered3]

Look into getting Business Plan Pro - It will help you develop a business plan, which you are going to need before anyone talks to you about loans.

Not used this before, but the SBA has some help for this too.

http://www.sba.gov/category/navigation-structure/starting-managing-business/starting-business/how-write-business-plan

Have your business plan ready to go with projected financials when you go to meet with a bank. Put a package together for several banks to essentially "bid" on your loan and go for the best option.

Most banks will also want you to move all of your personal banking to them as well so that you are completely in house.

 

[LandSpeeder]

Not sure the amount you need, but Coosa Pines FCU was EASY to deal with in purchasing my tired motor house. I had some down p though.
Not even sure if they give business loans. But they helped me when traditional banks looked at me cross eyed.... Some wouldn't even look at me... So I went to work for them. Oh LOL.

 

[monster]

I went thru sba 5 years ago and had good luck, lots of paper work almost to much but was worth it. your bank can help with paper work saves alot of time ask about thier grant program you can get some free money out of it if done right.

 

[ridered3]

I assume it is an existing business based on already having equipment etc? Get the buyers to prepare some financials statements of the existing business and that will help you in this process. It will show a lender the hopefully profitable history of the business.

 

[Trailabite]

Not used this before, but the SBA has some help for this too.

http://www.sba.gov/category/navigation-structure/starting-managing-business/starting-business/how-write-business-plan

Have your business plan ready to go with projected financials when you go to meet with a bank. Put a package together for several banks to essentially "bid" on your loan and go for the best option.

Most banks will also want you to move all of your personal banking to them as well so that you are completely in house.

Sorry - I should have said something like Business Pro as there several ways of doing it. If you are starting a business that will employee people in a rural area you can also run your business plan through the Mayor. Most Rural towns get funding from the State that is used for small business's and in order for them to get more money they have to spend what they have.

 

[grcthird]

Ok, going to check out SBA and business plan programs. I briefly talked with my credit union about a loan awhile back and they were interested so that is an option as well. It is an existing business being sold by the deceased owner's estate. Definitely not located in a rural area.
I have taken into consideration the fire sale value of everything as well. Thanks for the input fellas.

 

[jwilson645]

Good luck, J. Hope everything works out.

 

[Trailabite]

Good luck

 

[Bones]

Buy a tanning bed. Try to burn yourself then but a dot on your forehead!!! Unfortunately!!!

laughing1 laughing1 laughing1

 

[ridered3]

What's the latest on this?

 

[grcthird]

I just got info on the books and such this afternoon. Working on it!