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Forum nameFinancial Feast
Topic subjectNot sure what to do now...
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169, Not sure what to do now...
Posted by lisasgourmet, Mon Feb-19-07 04:51 AM
I had a meeting with a local bank that is "friendly" to small businesses.

Business plan is completed and great. Meeting went well. I thought.

Banker called me back & wants me to find a "co-signer" instead of writing up an SBA-backed loan package.

What do I do now? My personal funds have been depleted. I have no family that I can ask to put up their house, etc. or co-sign.

Do I move on to next bank or what?

Thanks for your help!

Lisa :-(
170, RE: Not sure what to do now...
Posted by BizConsulting, Mon Feb-19-07 05:29 AM

Well shoot! So sorry to hear about the banks response.

Did they give a reason why they want you to find a "co-signer" instead of writing up an SBA-backed loan?

You said your funds are depleted. For some this means they are truely zero (or close enough). For others this means they have $20,000 left in the bank. Since I don't know you, do you have any funds that you can put up at this time? House? Car? IRA? 401k? Anything?

171, RE: Not sure what to do now...
Posted by lisasgourmet, Mon Feb-19-07 05:36 AM
I have 1500 in my biz account that is to be used for unexpected expenses, as outlined in my plan. So far, I have invested about 12000 in operating, equipment purchases, expenses with 3000 in cahs infusions from me and sales.

It comes to about 24% of what I am asking for. At this time, there is nothing that I can put up for collateral. Isn't this the reason people go for the SBA-backed loan? To have a portion of the loan guaranteed by the SBA?

Very frustrating to come this far, do all this work to be held up because I just don't have any more money. If I had it, I wouldn't be asking for it, right?? Arggh! I hate banks!

172, RE: Not sure what to do now...
Posted by BizConsulting, Mon Feb-19-07 10:22 AM
Those blasted bankers. I feel your pain. Please know you are not alone. This is a common stumbling block. However, you may have some options.

When it comes to obtaining financing, that varies on a case by case basis. To get advice on your situation, you would need to have a consultant review your business plan to see where to go from here.

I would suggest you contact 3 different consultants. You know what type of person or business you prefer to work with. Interview them and go with the best fit.

My partner, Michael, is quite skilled in business plans and helping small business owners obtain financing. If you are interested, we can set up an initial conference call (no charge to you)to see if we can help.

Lisa, you don't know me from Adam. I wouldn't blame you if you don't want our help. Working with us is not the point. I encourage you to find someone who can help. You have worked too hard to stop now.

Like many on this board, I have been following your story for a while. I would love to see your dream become reality.

Best of Luck!

SHB Consultants, Inc.

173, RE: Not sure what to do now...
Posted by bizdev, Tue Feb-20-07 11:27 AM
Move on to the next bank.
It is quite normal for someone to go to several different banks before they find one that will back them.

However, they will likely all require that you have at least 20% of your start up costs funded by yourself. I don't think they will count what you have already spent as part of that 20%.

Have you tried for a microloan? Look through the SBA website and look for microloan intermediaries. They are a little more flexible. Intermediaries work only with local businesses, but they are located in many parts of the country and cover a pretty wide territory.

Don't give up! You've come so far already.
174, RE: Not sure what to do now...
Posted by lisasgourmet, Wed Feb-21-07 04:03 AM
Hello Again Everyone!

There is an update and a bit of light at the end of the Financing Tunnel! LOL

Talked with my banker again. I found a MUCH better location in the very heart of our downtown area --- it doesn't get much better than this!

Because of the new location, he is rethinking the loan request and is going to speak with my mentor at the SBDC. He seemed much more happy about the loan with this new location.

I guess I should mention that I also bank with this institution and have for a very long time.

So, this makes me a bit happier and have decided to write a paper about this process from the beginnings to the end --- whether it be getting funded or continuing on my current path.

Hopefully, it will be something that others can use and learn from -- if not for posterity! LOL!


Save the Earth! It's the only planet with cheesecake!;-)
175, RE: Not sure what to do now...
Posted by BizConsulting, Wed Feb-21-07 04:19 AM

That is Wonderful News! I am so happy for you.

Good for you for having a long-term relationship with one bank. That increases your chances quite a bit when trying to obtain a loan. I am glad you went back to them to work things out.

Going to another bank typically doesn't help much unless you have some sort of long-term relationship with someone there.

I like the idea of writing a paper on your experience. At some point you can write an e-book on your experience in starting up a business and sell it thru an affiliate program or something. Just a thought!

Best of Luck to you! Please keep us posted on your progress.


P.S. - I checked out your website and got hungry. Yum!