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3 Replies Last post: Jun 6, 2008 12:43 PM by Adducent

General Start-up Loan Requirements??

Jun 3, 2008 11:04 AM

tlux11 6 posts since
Jun 3, 2008

Hello,
I am interested in starting a business and wondering what are the general requirements for a start-up loan?
My credit score is between 710-725, I will be able to invest 25k, have a 20k credit line, and looking for a 55k loan?
What do you guys think?
Will I need to have more money to invest in order to get the full loan amount?

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Bridge 364 posts since
Jun 3, 2008

1. Re: General Start-up Loan Requirements?? Jun 4, 2008 8:51 PM

You really need to provide a little more information if you want a solid answer.

In short, with good collateral, you should have no problem but any bank will require a business plan and probably personal guarantees.

Look for a lender who participates in the SBA programs. The SBA does not lend money but guarantees loans to banks. You can also try a loan broker - most will charge a small up front fee that is refundable if they don't place the loan.

You might want to consider buying versus starting a business as it is generally easier to get funding for an acquisition of an existing business rather than an unproven concept.

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tlux11 6 posts since
Jun 3, 2008

2. Re: General Start-up Loan Requirements?? Jun 5, 2008 10:36 AM

in response to: Bridge

Little more information:
Personally the 25k is all the money I have.
I have manageable debt (mortgage, car, and zero balance on all credit cards).
My wife makes enough money to pay our mortgage, all of our bills, and for us to live on so I really won't need to profit any money for a while.
I will be the only employee for the first year or two so I will have no payroll expenses.
I have tried to setup the business loan in a way that I am paying for all of the things with no collateral.
The loan amount will be used purely for inventory and equipment.
The Credit Line will be used to cover the first five months of operating expenses.
Bridge, if you don't mind...could you tell me what you mean by peronal guarantees?

The reason I am trying to get an idea on whether or not getting the loan is possible is because I will have to get several certifications before I even apply for the loan. The certifications are expensive (8k) and I am included that cost in the 25k that I am planning to invest. I don't want to go through all of the certifications if it isn't possible for me to get the loan.

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Adducent 338 posts since
May 22, 2008

3. Re: General Start-up Loan Requirements?? Jun 6, 2008 12:43 PM

For a start-up, even with good credit and putting some money in your self, the lender or funding source is probably going to need collateral and will want a personal guarantee. A personal guarantee means that you as an individual will pay back the loan if the business can't or if the collateral is sold (should the business fail) and not cover paying off the debt.

Some businesses are easier to fund than others so if possible, tell us what kind of business you are starting and I (and I'm sure some of the other SBOC members) may be able to give you some further feedback.

Dennis Lowery
Adducent, Inc.

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This Question is Possibly Answered

General Start-up Loan Requirements??

Jun 3, 2008 11:04 AM

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