WE'VE MOVED!

We are proud to announce our NEW community destination. Engage with resident experts and fellow entrepreneurs, and learn everything you need to start your business. Check out the new home of StartupNation Community at startupnation.mn.co

My bubbles burst...now what?

smokehousesmokehouse subscriber Posts: 3
edited July 2008 in Startup Funding
Well, I had a second meeting with a counselor from SBA today and my bubble has been burst.  My 1st meeting went well, they went over my business plan and gave me some tips to tighten it up.  They thought my numbers were good and we set up another meeting to go over some loan proposal paperwork. 
Well something changed between the 1st meeting (2 weeks ago) and this meeting.  Now they say to wait a year, maybe two, before I try to get funding.  They said banks aren`t giving money for start up restaurants right now because of the economy and it would be a waste of mine (and theirs) time to try. 
I`m crushed. 
Is this true?  Are banks not giving to risky businesses like restaurants?  Do I have any other options seeing as I don`t have the funding to do this myself?

Comments

  • StartUpSmartStartUpSmart subscriber Posts: 0
    Hi,
     
    Sorry to hear that. It is a tough time to raise money via bank loans. Although I have no personal experience with this website/company, I have heard good things about it. I suggest looking into Prosper.com. www.prosper.com
     
    Good luck!
    Joe
  • robertjrobertj subscriber Posts: 0 Member
    Well, I had a second meeting with a counselor from SBA today and my bubble has been burst.  My 1st meeting went well, they went over my business plan and gave me some tips to tighten it up.  They thought my numbers were good and we set up another meeting to go over some loan proposal paperwork.  Well something changed between the 1st meeting (2 weeks ago) and this meeting.  Now they say to wait a year, maybe two, before I try to get funding.  They said banks aren`t giving money for start up restaurants right now because of the economy and it would be a waste of mine (and theirs) time to try.  I`m crushed.  Is this true?  Are banks not giving to risky businesses like restaurants?  Do I have any other options seeing as I don`t have the funding to do this myself?
    I`m sorry to hear about your counselor`s opinion (not advice). Some quick comments:

    The loan proposal paperwork was probably for an SBA guaranteed loan, which is actually processed by a bank.
    It`s been my experience that when SBA counselor`s think about capital they think SBA loan.
    Banks have long considered start up restaurants as high risk for loans - especially without collateral.
    There are several possibilities for acquiring capital - depending upon many factors specific to your situation.
    There is no question that the "traditional" lending community is in chaos right now - but solid deals (which are Capital Ready) are still getting done.
    I can`t comment as to whether your deal is possible or not since I don`t have any information. It will likely be more challenging and possibly more costly than a few years back - but with preparation and persistence, it probably can be done.
     
     
     
  • stonesledgestonesledge subscriber Posts: 608 Silver Level Member
    Craig..... Great idea!! less risk.. atleast it would seem as so.. and less "overhead"!
     
    Erin
  • robertjrobertj subscriber Posts: 0 Member
    Craig,
    While starting "small" may seem to reduce risk, because one doesn`t put as many "chips in the pot" - in some situations, starting small means staying small. Every situation is different and I advise my clients to make an informed choice after considering all the implications.
     
  • smokehousesmokehouse subscriber Posts: 3
    While I like your idea, and have actually considered it in the past, in a town like the one I live in, I`m not sure it would go over well.  We have "fast food" joints, (which is kinda how I consider a BBQ Shack) but they are never as busy as the real dining places.  We`re a town (and State) of leisure.  Take your time deciding, ordering and eating.  A bbq shack, even with picnic tables outside (and in 100 degree weather, eek) I just don`t see here.  But I do appreciate the idea.  Maybe I need to just try this myself (going to bankers) with my business plan, as someone mentioned above that it was really just an SBA workers opinion that I wait.
    My business plan is done, it could probably use a little tightening up, but it is basically ready for viewing. 
  • robertjrobertj subscriber Posts: 0 Member
    While I like your idea, and have actually considered it in the past, in a town like the one I live in, I`m not sure it would go over well.  We have "fast food" joints, (which is kinda how I consider a BBQ Shack) but they are never as busy as the real dining places.  We`re a town (and State) of leisure.  Take your time deciding, ordering and eating.  A bbq shack, even with picnic tables outside (and in 100 degree weather, eek) I just don`t see here.  But I do appreciate the idea.  Maybe I need to just try this myself (going to bankers) with my business plan, as someone mentioned above that it was really just an SBA workers opinion that I wait.My business plan is done, it could probably use a little tightening up, but it is basically ready for viewing. 
    Talking to bankers can be helpful. Just remember, they have their own "template" for lending. Just because your situation doesn`t "fit" their template - doesn`t mean it`s not possible. There are a number of ways to bring capital into a business.
    Good luck - send me a PM if you have questions.
  • KevDevKevDev subscriber Posts: 5 Member
    Yes, the economy stinks, and yes, it might be better if you waited a year or two, but it seems to me that IF you are ready and IF you think you can make a go of it, you should apply for the loan.
    What`s the worst that can happen? They turn you down. Take what you`ve learned and try again later.
    Good luck!
  • RobAdams4CEOSpaceRobAdams4CEOSpace subscriber Posts: 1
    The overall economy may be down right now, but I just returned from a business forum that showed no signs of recessionary times. In fact, you could say that we were learning and doing that which would inflation proof our businesses.Much of our success with lending institutions is in our presentation... have we done our homework to know the market we are entering? What is it that we propose to do that will cause us to stand out from the others? For banks, they just want to be safe so if you go under they will not be at a loss. You are the one taking all the risk.For private investors, they are only interested in one thing... how much money they will make. They are the ones taking the financial risk. If you can make a compelling argument that your idea will make big money, you will have their ear. Don`t just give them what you think, but rather develop a presentation that is based on known facts and market research.
Sign In or Register to comment.