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    0 Replies Latest reply on May 30, 2008 10:55 AM by carokel

    Collateral needed for typical loan

    carokel Newbie

      Hello! I am trying to get a retail store open and need a loan of $140,000. I have a business plan, many years of experience, a location (though I haven't signed a lease) and a merchandise and fixture plan.


      My question is this..... How does the bank value the business assets of a start-up? In retail, so much money is tied up in inventory.... does this count as collateral against the loan? I plan on spending about $60,000 on inventory and the rest on build out, equipment, cash reserve of about $60,000 and the remainder on misc. licenses and other start up expenses.

      I have great personal credit and have about $130,000 equity in my home.

      Will I have to pledge my home to get a loan? If I qualify for an SBA loan, doesn't the SBA guarantee the loan to the lender?

      Thanks for any clarification you can provide.