I have been trying to get infromation on getting a loan through the SBA. I am trying to get the money to get my fees for a franchise.
However when looking through the information on the SBA website I can not understand how people get loans through them to start with.

It states on there that you do not always have to have collateral but you do have to have 20% or more of your start up cost. Not everyone has 20% of start up cost. I own my home, well I still owe
about $62,000 the house is worth about $140,000 maybe a little more.

So how do you open a business if you do not have any money saved up at all. The business I am looking at just to get started I would need at least $50,000. And I do not have any family or friends that I could get money from. I noticed on the SBA website they tell you to get your money from family and friends, I do not know anyone who could just hand over money like that.

Does anyone out there have any suggestions. Should I just give it up. Thanks for any advice.

Sincerely,

Lanell

The SBA does not give out loans. They work with banks that issue the loans and the SBA backs the loan via a guarantee. Should the borrower default on the loan the SBA picks up roughly 75% of the loan. Of course they are in no hurry to do such a thing, so they are extremely selective and the fees are pretty high. They have many requirements attached, one of them being the 20 - 30% of the cash needs must come from the borrower. In your particular case it sounds as if your portion can be gotten with a home equity loan.

Another requirement is that the borrower have applicable experience in the industry they are going into.

The very first step to applying for an SBA backed loan is to write an outstanding business plan (see below for help with that). You can then take your business plan to your local SBDC office (Small Business Development counselors housed in local colleges) for their input and advice. When the business plan is ready to go you take it to local banks to apply for your loan.

You will find much more information and detail in my business startup kit.

Sylvia
http://businessplanmentor.com
Business plan and start up resources

It's tough tryingt o get business capital, so if you don't have any conventional options, you have to be willing to work harder than everybody else to make a way to make your business work. I acutually found a tool that has already helped me. check out the link, it will help if you are ready to work hard!


http://www.bedzzzinn.com/raisecapitalcsampson.html

> I have been trying to get infromation on getting a loan
>through the SBA. I am trying to get the money to get my fees
>for a franchise.
>However when looking through the information on the SBA
>website I can not understand how people get loans through them
>to start with.
>
> It states on there that you do not always have to have
>collateral but you do have to have 20% or more of your start
>up cost. Not everyone has 20% of start up cost. I own my
>home, well I still owe
>about $62,000 the house is worth about $140,000 maybe a little
>more.
>
> So how do you open a business if you do not have any money
>saved up at all. The business I am looking at just to get
>started I would need at least $50,000. And I do not have any
>family or friends that I could get money from. I noticed on
>the SBA website they tell you to get your money from family
>and friends, I do not know anyone who could just hand over
>money like that.
>
> Does anyone out there have any suggestions. Should I just
>give it up. Thanks for any advice.
>
>Sincerely,
>
>Lanell

I'm a firm believer in never giving up. With that being said I can tell you that lots of people have started their own business with little or no money. I like the basic story someone wrote about how you buy something, sell it and then buy two, sell them and then buy 4...etc.,

You haven't mentioned what kind of franchise it is but knowing that would help us better to help you.

I am aware of many grant funding programs but am not familar with one that will offer funding for one to buy into a franchise. Most of the funding programs that I know about and are involved with deal with people starting their own business.

I don't believe that you should give up but if getting the money is the problem have you considered starting smaller and then working your way up - having saved the money - to buy into the franchise?

Rose
Grant Basics 101
http://grantbasics101.bravehost.com/grants.htm

2 things, what is the franchise you are trying to open? Is it a food franchise? If so, be careful to know what your margins are that you are working on. Many startup franchises find it difficult to make a means of living by only owning 1 restaurant, they have no buying power and the margins are meager, like 8%, when they are reaching full potential.
On the flip side, you have 80K in your house that you can tap without needing to verify what you need the means for. There are no ratio and no doc loans that don't require you to verify work information. That may be your best option if you are putting all your eggs in this basket to start the franchise. Send me an email if you want me to talk to me more about it. csk317@yahoo.com
-Chris

Well if the home is the only collateral you have, you may just want to use the equity in it to finance your business if you feel the success rate is high. But if its questionable, I wouldnt risk it. Starting a business, even a franchise, is a risk and of course most small businesses fail due to under financing and bad marketing/business planning. How much research have you done to ensure that your business, if acquired and started will be moderately successful?

By no means should you just give up (if its something you are passionate about doing) but if you want to get this going, you may need to use some alternative methods of financing (and Im not talking about family or friends...I always laugh when I see someone suggest that)

If you would like information on some alternative financing options, feel free to email me.

Highest Regards

> I have been trying to get infromation on getting a loan
>through the SBA. I am trying to get the money to get my fees
>for a franchise.
>However when looking through the information on the SBA
>website I can not understand how people get loans through them
>to start with.
>
> It states on there that you do not always have to have
>collateral but you do have to have 20% or more of your start
>up cost. Not everyone has 20% of start up cost. I own my
>home, well I still owe
>about $62,000 the house is worth about $140,000 maybe a little
>more.
>
> So how do you open a business if you do not have any money
>saved up at all. The business I am looking at just to get
>started I would need at least $50,000. And I do not have any
>family or friends that I could get money from. I noticed on
>the SBA website they tell you to get your money from family
>and friends, I do not know anyone who could just hand over
>money like that.
>
> Does anyone out there have any suggestions. Should I just
>give it up. Thanks for any advice.
>
>Sincerely,
>
>Lanell

Anthony Jones - Business Consultant
ABC Solutions
ajones@abcsolutions.cjb.net

All you have to understand is that you do not have to go through the rigour of deposite a collateral or 20% of the cost of the funding you need via a small business loan.
I was able to get some funding for my business via at the beginning of this year by paying just 10% of the funds needed for my busniness. If you are realy interested getting to know more about this SBA loan Programme you can email me: paulforstevens@yahoo.com
Good Luck!!!!