I was wondering if anyone on the board had any experience getting SBA loans. I am already on my way to owning a company (actually already signed documents, but I have until 2004 to make the payment on the business. Anyway, I am looking to start my own business as the first one doesn't take up a whole bunch of my time. Can anyone give me any guidance into the process. SBA.gov has to be the most confusing web site on the planet. Anyone been through the process recently? Thanks!
Well, I am planning on applying in the next month or two. I agree about the website.....I don't think they give enough info. on SBA's. I have called up several lenders in my area in the last few weeks and spoke with several loan specialists in depth about the SBA 7(a) loan program and here is what I learned from my conversations: 1) They seem to look for FICO scores at least above 650 -- just like regular credit, the higher the better. The lenders seem to pick only one CRA to pull your credit. Ask the loan specialist with the lender you intend to apply with and they will tell you who they pull. 2) Interest is Prime + *2.75%-maximum (prime is currently at 4.25%) *****This interest rate is NEGOTIABLE----factors depend on credit scores/risk/collateral 3) For a new start-up business ------> they will require a 30% collateral-----> usually in the form of cash savings ***However, you can use the equity in your home too, but this is going to depend on the LENDER's POLICY ------> If they approve they submit to SBA explaining that your home will be used to secure some of the 30%...a Preferred Lender will have more ability with SBA to pull off these loan packages. 4) Go with SBA PREFFERED LENDERS-----> many benefits including quicker turnaround time...more likely SBA will accept loan if lender has approved....more leeway in structuring the loan (very important) 5) Call around and talk with various lenders, ask for the SBA loan specialist..... Lenders all vary, some tend to be very conservative to moderate to aggresive with SBA loans. 6) Might want to consider submitting your loan to several SBA lenders, provide your credit report to them and upon submission ask THEY DON'T RUN YOUR CREDIT until they have reviewed you business plan and are likely to approve loan, don't want to kill your credit. 7) Don't rule out smaller banks, still should be preferred lenders. They tend to have a higher risk tolerance with SBA loans than bigger banks. It is how some of them remain competitive with the bigger banks. Good Luck!
That pretty much kills my idea. I surely don't have 30% of what I want to borrow in the form of cash savings, and I doubt seriously my wife would let me put the house up so that I can try to make a business work. I understand there has to be risk, but my house can't be risked. I just don't think it is that important. I know my Dad got a SBA loan without putting his house up. I guess I need to ask him how he did that. Anyone else have any helpful tips?
Weather, the info. I posted on was for the 7a loan. There are other loan programs with the SBA that may or may not require as much collateral. http://www.sba.gov/financing/frfastrak.html I am not familiar with these programs so I can't give you any info., but don't rule out the SBA. Also, there is also personal credit to finance your buz plus buz. cc's, especially those that don't report could be useful to maximize your ability to obtain credit.
Amy, I have been in telecommunications my whole life. The business I am currently involved in sells services like business lines, internet service, and long distance. We are business partners with large companies such as Qwest and BellSouth. I want to start a cellular company, hopefully selling Cingular Wireless (the BellSouth owned cellular company) and possibly other providers. I worked in the cell business for quite a while, and while I have some competition in the area, I think it's something that is lacking in the area. A couple of small companies do it, but I want to have a wireless only company. Right now it's like a boat repair company selling wireless, a service station, and then a couple of like beeper and satellite places that do it. I was actually looking at franchising a company called @Wireless (formerly Cellular Unlimited). They are well known in the north, but have not moved into the South much as of yet. Total start up costs are around $50,000. That includes franchise fees, inventory, building acquisition (lease or rent) and for them to come and set the store up with all the offical logos and what not. Anyway, I am interested to hear about other programs. Is the best bet to find a loan officer familiar with SBA loans? Are there any large well respected companies that specialize in helping you get a SBA loan?
I was looking over that post that talked about credit cards and how to obtain them for business use. I may go that route and see what happens. At the very least it would establish my business which I assume couldn't hurt when it comes time to ask for the SBA loan.
You can also RE-FI your house and pull some money out, that's what I'm trying to do. That's why I'm here. Money, is cheep right now, and refing and pulling money out is probobly a lot cheeper and safer than getting an SBA or even a credit card. I hope that helps.
Re: Re: Business Loans Trying to get this started without putting my personal life on the line. If I can't, that's fine, but I am going to try!
The biggest drawback to SBA loans is the amount of documentation required. I have looked at this a couple of times and always decided against it. Credit cards are so much easier. www.creditsense.com
I'm in California and there is a program similar to SBA, but it's a loan that guaranteed by the state. The requirement is that you get rejected first by normal lending channels. I discovered it on the state website under the business section. I would check and see if your state has something like it. Another idea is use your wife as the owner. There are a lot of programs out there for female and minority owned businesses.
Re: Re: Business Loans But how do you get credit cards worth having in that situation, like Visa, AMEX, etc. I mean the Staples and Office Max's are nice, but aren't really what is needed to make a business move.
Re: Re: Re: Business Loans I mean that I don't want to sell my car or mortgage my house or sell my kids or anything like that to make this happen. The only way I can do this is to not be liable for every single penny of it. I am trying to find ways to establish my corporation and then get credit off of it. I will have some of my own money to play with very soon, and I am willing to risk it, just not my house. Anyway, I was thinking that if I start to open some tradelines with like BellSouth for the phone service, and some others that I could start to build the credit for my corporation. I understand this is not going to happen overnight. I am just trying to map out a gameplan here.
Re: Re: Re: Business Loans We'll if what you are talking about is to protect yourself incase of a lawsuit then I would incorporate first then start the business, There are a lot more fees but if you have a loss you can write it off, I'm not sure if you can write it off your personal income because because it would be a corp. now.. What kind of business are you trying to start? Sometimes, depending on the business having well written contracts is all you need. That's what I have, a sole proprietership, but I have some tough contracts, never been to court, not even close. I've had my agruements and disagreeements but have always been able to settle them no problem. ... Anyhow, what kind of business??????
Re: Re: Business Loans We got an Advanta card soon after starting the business. We also got an AMEX line of credit and soon after they offered us an Optima. www.creditsense.com
Re: Re: Re: Re: Business Loans MOU...........look up at around the 4th post on this thread or so. The explanation of what I am trying to do is there.
Re: Re: Re: Business Loans No personal guarantees. Can recall exact intial limits, but Advanta is up to 20000, I think it started at 7000. Same can of deal with AMEX, but line is 22000 and Optima is 11000. www.creditsense.com
Re: Re: Re: Business Loans creditwork, I'd love to get some more information about how you were able to do this. Didn't I see somewhere that your company is set up as a LLC? That's what I would to set mine up as. If you could e-mail me at hurrcane@bellsouth.net that would be great. If you don't want to bother, I understand. I would just like a tad bit of guidance from someone who has successfully accomplished this.
