Applying for a SBA Loan

[bamaster]

Looking for feedback on where to find funding. SBA seems to be the first place to start, but I've heard mixed reviews about working with the SBA.

The money needed, as we see it now, are around $150K - $200K. Very large place with the needed renovations and about a year worth of working capital.

Your input is appreciated.

 

[ElPugDiablo]

I got into the coffee business by buying a very busy shop with a SBA guaranteed loan. I was turned down by three banks but the fourth one okayed the loan. Even though the first three banks were looking to get SBA guarantee, they required substantial collaterals, which I didn't have. However the fourth bank's lending officer took a look at the shop's tax returns, ran the numbers, visited the shop and okayed the loan in less than two weeks. The presentation, paper works and business plan were exactly the same for all four banks. The first bank that I applied with is the bank that the shop does business with, they knew the business was raking money hand over fist, and the purchasing price was way low, plus I knew the lending officer pretty well, but they still turned down the loan. The other two were all local banks, where as the fourth bank that took a chance on me, is an out of town bank. You just never know.

By the way borrow on the high side, and ask for a 5 to 7 year loan, and be conservative but realistic with your numbers.

Good luck.

 

[consciouscup]

SBA

We're opening with a $150,000 SBA guarantee loan. The terms are actually very good given we're a startup business. You must, however, be extremely detailed with your breakdowns from buildout costs, equipment and inventory. Once money is allocated from your loan to these three "buckets" you cannot, we are told, shift. Got a low bid on appliances? Great, but don't expect to be able to shift the savings to an overrun in buildout.