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    6 Replies Latest reply on Sep 3, 2008 9:03 AM by Bridge

    SBA Loan for a new business

    tmccadden Wayfarer
      I am writing to get information on the process of an SBA loan. I have visited their website, but did not find the information I am looking for. I am looking to see if anyone knows what they look for to be qualified for a loan. I am looking for a loan of $200K to start my new business. I am opening a convenient store/deli in Arizona. I have 10yrs+ experience in working and running convenient stores with my husband. This store I will run as my own store(with his help and 20yrs of experience of running convenient stores). I have found the space I want to open, and I am in the process of negotiating the lease with the city. I should have the answer by the end of the week. My business plans are almost complete, and just need to do the business layout plans next. I have excellent credit, own a house(no equity though), and I am putting $30 -$40 of my own money down from a 401K if I need to. However, the financing process is all new to me, and I would like more information on the next step involved, and when should I apply for the loan. How long does the process take? What other qualifications do they look for? My goal is to have the store opened by November the latest.
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      Thanks for any advice.
      *Tammy

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        • Re: SBA Loan for a new business
          Tracker

          Hi Tammy,

          Before you apply you will need to be sure that you have your business plan in good shape and presentation ready. This should include 3 years of financial projections for the business. In your plan you need to stress the amount of experience that you and your husband have. The lender is going to need your credit info and history and questions about if you own your home, how much equity in the home and what your personal net worth is. They will also get into the source of any funds that you have to put into the business. Approval for the loan, the amount they can provide and interest rates are or going to be based on your personal credit and the security (collateral) for the loan. I've worked with clients for their SBA loans and it varies but the loan can close in 60 to 90 days if things go smoothly.

          You said that you visited the SBA web site but have you spoken with anyone with SBA in Arizona? Here is their info.

          Arizona SBA Office

           

          2828 North Central Ave,
          Suite 800
          Phoenix, Arizona 85004-1093
          Telephone: 602.745.7200
          Facsimile: 602.745.7210
          Hours of Operation:
          8:00 a.m. to 4:30 p.m. (Mon - Fri)

          What you might do is call them and ask for a list of their SBA approved lenders in your area. Then contact the lender and request more information or help with specific questions you may have about their application process.

          Also, regarding using your 401K as a source of funding; here are a couple of resources you might check out so you can determine the best way to do that:

          http://www.guidantfinancial.com/products/
          small-business-financing/default.aspx

          http://www.benetrends.com/services/busine
          ss-financing/index.php

          I hope the above helps you. Good luck with your start-up business.

          Dennis Lowery
          Adducent, Inc.
          • Re: SBA Loan for a new business
            LUCKIEST Guide
            SBA Loan for a new business.

            I have another web site you should visit. SCORE. SCORE is FREE and they can help.
            You can visit SCORE on line or in person. SCORE works with the SBA.
            On line you can ask SCORE Counselors of your choice questions and they MUST answer you.
            It is great that your goal is November. That gives you time to set everything up right.
            Every person in business should have an Accountant, a Lawyer and maybe an insurance Agent.

            Good luck, LUCKIEST
            • Re: SBA Loan for a new business
              Bridge Navigator
              You might consider buying an existing business instead. They are easier to finance becasue you can show a financial history.

              C-stores are for sale all the time. Try a majpr business listing services such as:

              www.bizbuysell.com or

              www.bizquest.com

              I would also recommend getting a good business broker to guide you through the process.

              Best of luck!

              Greg
                • Re: SBA Loan for a new business
                  she1072002 Wayfarer
                  regarding your e-mail, I want to have my own bar/lounge. Do you recommend buying an established business and if yes, is getting approved for a SBA loan easier than just having a start up.
                    • Re: SBA Loan for a new business
                      Fortis Wayfarer
                      she1072002,

                      Hope all is well. Lenders consider you a startup business whether your buying an established business or starting one from scratch. We consider it a startup for the first 2 yrs. Even if the business has a good track record doesnt mean that new ownership will keep that alive. In fact I have seen many people take good businesses and drag them down. Lenders will want to see your business plan and how you are going to improve on the businss.

                      SBA is always a great route with 30 yrs in biz or startup. How much does your business need to buy this lounge?
                        • Re: SBA Loan for a new business
                          Bridge Navigator
                          Fortis,

                          I was hoping you could clarify your last post for me. Do ALL lenders consider you a "start-up" whether you buy an established business or start one from scratch or is that your company policy?

                          I am not a lender but ahve raised acquisition debt financing and assisted people in obtaining loans and the feedback we always received was that it was easier to finance an acquisition than a start-up. With an acquisition, their is at least a track record of earnings and cash flow. Obviously lenders want the acquirer to have experience in the industry but there is less risk in purchasing an established business than starting one.

                          I would be interested to hear feedback from other members with their experience.