SBA Loan Success/Failure

ZippityzzzZippityzzz Posts: 2subscriber
edited November 2006 in Startup Funding
I am going to be going for a SBA loan this year and would like to hear some Success/Failure stories.
I don`t know what I am in for and would like also to know how the process goes.
My whole business depends on this funding.

Thanks,

Walter

Comments

  • EMMYTAYEMMYTAY Posts: 0subscriber
    I went for an SBA loan with a startup business plan.  Because I had already invested over $50,000 in startup costs and had written them off (LLC), I had negative equity.  They will not lend on negative equity. FYI
     
     
  • leespizzahouseleespizzahouse Posts: 3subscriber
    We got creative as.....?
  • robertjrobertj Tampa Bay, FloridaPosts: 0subscriber Member
    Just be aware that raising capital by selling unregistered securities via the internet may be "frowned" upon by the SEC and your State.
  • MNGrillGuyMNGrillGuy Posts: 2subscriber
    robertj, you make a good point.  I`ve read much about Reg. D and proper solicitation of capital.  My guess is that most seed money is not obtained "by the book".  At what point will this become a problem?  And how easy/hard is it to resolve?  My gut tells me that if "big money" is coming in they will want everything worked out and fixed prior to any such investment. 
  • daleyfla99daleyfla99 Posts: 1subscriber
    I have to add my voice to robertj`s, tread carefully in securities issuance waters. 
    One of my consulting clients did the SBA route (against my advice) with CIT and it`s killing her business slowly.  The busines was a franchise that put up some impressive fantasy numbers about what could be made.  If she did not have the SBA loan, she might be able to pay herself a salary someday, but will not be anytime soon.  We had hurricanes here in S. FL and the triple net lease pass thrus here are killers.
    What I am trying to say (other than don`t get into a franchise unless you are sure it will work) is do not go into debt with them if you can at all help it.  Look to some of your local finance people, there are angel investors who would rather bankroll new businesses than gamble with their money.  They are kind of tough to find and will require the same disciplined business plan that the SBA will.  Less red tape with them though, they make decisions and act much more quickly. 
    Have a lawyer review any private loan documents drawn up, and DO NOT use thier lawyer or anyone they recommend.  Pay the fee to a lawyer so you can sleep well at night.
    Good luck.
  • robertjrobertj Tampa Bay, FloridaPosts: 0subscriber Member
    I agree - one can earn the money to fund their business - whether by being employed or by creating another business that accumulates funds through the sale of goods or services.
    Many people do it this way. There are many ways to bring capital into a business and there is no one way for everyone. The key is to use the one that is "optimum" for the situation.
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