From : Blaine
Location : Los Angeles , CA |
Question :
What are the chances, realistically, of a pure start-up getting an SBA loan if the business owner does not have other assets (house) to pledge as collateral? |
Reply :
A good business plan is essential. Management ability, cash injection, are going to be critical. |
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From : McKinnley Raine
Location : Tampa , FL |
Question :
Is there such a thing as state incentives/subsidation for small business start-ups looking to relocate? I.e, My educational film/video business start-up can operate from virtually any state, but I wish to move to, and operate within, a more rural state than I currently reside in. |
Reply :
You may find State, County, Local, including city initiatives to provide incentives for relocation. Check out the web for possible resources from these entities. |
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From : Kim Morgan
Location : Wallace , SC |
Question :
So for a $50,000 loan, I need to have $10,000? |
Reply :
Banks do not provide 100 percent financing. Traditional bank financing will require 20 to 30 percent of equity in the business. Equity is considered to be cash and other assets that you have invested or will invest in the business. |
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From : Sue
Location : Westerville , Ohio |
Question :
How do I get working capital without collateral? How can SBA help our 8a certified company? We tried to get loan against Account Receivables and bank won’t talk. |
Reply :
First you should be talking to banks that provide line of credit. It will be important to have the conversation with the bank official responsible for small business lending. Contact the district office by viewing the map at www.sba.gov and get a list of active lenders and the point of contact that provide lines of credit. Accounts Receivable can and will be used as collaterial. |
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From : Tom
Location : |
Question :
What are the dollar amounts that define a "Small Business according to either the SBA or Fed Gov? Limits and maximums. |
Reply :
SBA is the responsible federal agency for determing size. The size of a business is determined by North American Industrial Classification System. The size standards are posted on the SBA web site at www.sba.gov/size. |
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From : HV
Location : Alexandria , VA |
Question :
We would like to acquire a company worth $1 Mln. What is the best way for me to get a loan from a bank. The company we are acquiring is profitable and has strong financial record. However, when we approach banks for financing, they are not willing to consider revenue from the "new company" - they are only taking into consideration my net worth and current business revenue. How do I go about the acquisition? |
Reply :
You are local, contact Bob Carpenter 202 272 0355 or Freddie Biddle 202 272 0354 from the district office. We will guide you to several banks that provide acquistion financing. |
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From : Harmik
Location : Los Angeles , California |
Question :
I want to initiate a new business that has never existed in the U.S., its a new kind of service. The problem is that I don't own a house and I dont have much to put down for collateral. I only have a car that I could use. How can I go about borrowing from Banks that work with SBA. My second question is which one is easier to borrow from and what are the benefits and disadvantages, Banks (with SBA) or venture Capitalist. Thank you. |
Reply :
Starting business without collaterial or cash would be difficult. The SBA guaranty will be essential because of the credit enhancement. Remember SBA cannot deny a loan because of insufficient collaterial provided that you meet the other three credit requirements, Managagement, Ability to repay the loan thru the Cash Flow, and the cash or assets (equity) invested in the business, usually around 20 to 30 percent. |
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From : Luder Messervy
Location : Charleston , SC |
Question :
I heard the Lowdoc and Express loan programs are being terminated. Is that true? |
Reply :
Lowdoc loans ended on September 30, 2005. SBA Express was made permanent. SBA Express loans require no paperwork from SBA and our turnaround time to the lending institution is 24 hours. |
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From : Hally Hicks
Location : , Ms |
Question :
Is there financial assistance in purchasing a new home? |
Reply :
SBA financing is only for small businesses that are for-profit. Buying a new home would be ineligible for SBA financing. |
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From : bonnie grunfelder
Location : waukesha , wi |
Question :
Does it matter to the banks or finance officers how i set up my business for ex. incorporated or sole proprietor to get a loan.? bawana2@hotmail.com |
Reply :
What is important is the business plan. It should not matter to the lender as to whether this is a corporation, a partnership, or a sole proprietorship. |
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From : anthony t proctor
Location : Fairmount Heights , md |
Question :
My question is;being that I am trying to open a new business with a poor credit rating and I am trying to get SBA financing;would it be practical to use a relative with better credit ratings and the use of their properties as a form of collateral but,I would still be held responsible for any and all financing needed to get the business off and running. |
Reply :
The first agenda item is to get a copy of your credit report so you know what is actually on the report. Work closely with SBA's resource partners (SCORE, SBDCS, and Women Business Centers) and provide information to the report credit agency with your statements as to why and what you have done to repair your credit. Many of our resource partners provide classes on repairing credit. |
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From : McKinnley Raine
Location : Tampa , FL |
Question :
I have approx. $250K in Equipment directly related to my start-up business, $20K currently in operating capital, stable credit, an estimated operational cost of $200K annually, with a modest prospectus of initial gross revenue around $500K. What would be a reasonable figure $$ to approach the SBA for? |
Reply :
Thanks for all of the information. Incorporated in your business plan will be a cash flow statement. The cash flow statement indicates the shortfall and surpluses on a month to month basis. The size of the shortfall will indicate the size of the loan. You should present your business plan to the bank official responsible for small business lending (Usually not the branch manager) |
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From : Joyce Brayboy
Location : Enterprise , Alabama |
Question :
I am currently in a female-owned, minority used car business in a small town, trying to transition to a superstore, needing an additional 10 employees and planning for about a million dollars to purchase the location, new building, etc. What advice can you give me in planning to present to lenders, in things to consider, in things to be able to answer to. What lenders would get us to the best SBA source for what we want to do? |
Reply :
The best approach would be SBA's 504 loan program. The advantage is that you would only be required to inject as little as 10 percent of the total project cost. Contact the local district office in Birmingham or go to www.sba.gov and click on the appropriate state for the local distirct office. Ask the SBA for the most active certified development companies that utilize the SBA 504 program. |
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From : Hally Hicks
Location : Wiggins , Ms. |
Question :
I am intending to open a new sporting goods store in my strip mall once its completed. Can you help there with start up costs i.e. inventory? |
Reply :
The SBA 7(a)loan guaranty program is used for start-up businesses, including sporting good stores. About 30 percent of SBA loans go to entrepreneurs that are starting a business. |
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From : Sonya Washington
Location : Charlotte , NC |
Question :
What is the best way to start a jazz club and beauty lounge |
Reply :
Any business, including a jazz club and beauty lounge, will need to have a business plan. A business plan includes an introduction, marketing, financial management, and operations. SBA's resource partners can help (SCORE,SBDC, and Women Business Centers and the SBA web site has business plan templates www.sba.gov |
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From : Robert
Location : Marin , California |
Question :
Hello Mr. Loddo: For the last ten years I have owned and operated a small business in an area which, due to severe storms and flooding, was recently decalred a state and federal disaster area. I have worked very hard during this ten year period and, I am proud to say, have never once sought financial assistance. However, the recent storms have all but erased business income for the last quarter of 2005 and I am finally feeling the effects. While I only sustained limited property damage from the storms, I had previously invested thousands of dollars in reovations and equipment in aniticipation of a strong year. Because of the lost revenues, I now find myself in jeopardy of not only missing payments on my renovation expenses but also not haveing sufficient cash flow for payroll and taxes. My wife and I have a very high credit rating but do not own property at this time (we have owned homes in the past) - we are also minority business owners. In your opinion am I a good candidate for a SBA loan? If so, could you please recommend which steps I should take first? Thank you very much for your time, Robert |
Reply :
SBA's disaster loan program provides for the long term recovery for all businesses, homeowners, and renters. In order for an area to be considered a disaster, either the President, the Administrator of SBA, or the Secertary of Agriculture must declare an area as eligible for disaster assistance. FEMA provides the immediate relief, SBA provides the long term relief with low interest loans for up to 30 years. You can find more information at www.sba.gov/disaster or 1 800 659-2955. |
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From : Hally Hicks
Location : Wiggins , Ms |
Question :
How long does the application process take and is there help filling out the apps? |
Reply :
Using SBA Express or the SBA's Preferred Lender's program, the turnaround time is 24 hours. Not bad!!! Our resource partners can help in developing a business plan as well as SBA's web site on business plans. |
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From : Paul
Location |
Question :
for an IBO, is the SBA loan approval process tied to individual credit scores? |
Reply :
SBA guaranties the loan that the bank will make to the small business. Bank traditionaly look at credit scores in order to determine how a business or an individual has handled their past credit. The credit score is just one part of the credit process. The business plan is essential. |
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From : Sheila Smith
Location : toledo , oh |
Question :
I was wondering what are the reasons for excluding ex-convicts of any type of business funding. I would also like to know if there are any programs that a reformed ex-con can participate in to acquire assistance. |
Reply :
Ex-convicts are eligible as long as they are not probation or parole. They will have to fill out a 912 form which will ask for their conviction. SBA will review each submission and make a determination based on how remote in time and how serious the offense. |
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From : Susie Gates
Location : Charleston , South Carolina |
Question :
Does the SBA have loans specifically for women? Howabout for military spouses? |
Reply :
SBA loans are for everyone and are based on credit requirements. The credit requirements are management experience, the ability to repay the loan through the cash flow of the business, and sufficient equity (usally between 20 to 30 percent of the loan), collateral is also considered as the secondary component if the loan was to default. SBA cannot deny a loan because of insufficient collateral, if you meet the first three requirements. |
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From : JOY SWABY
Location : SAINT LOUIS , MISSOURI |
Question :
I need Financial Assistance to start on my business, I don't need much, anywhere between 5-10,000. I know for the fact that my ideas are great, but I have one concern,that bank won't think my business proposal is complete enough, I have so far 12 pages, and it gives a complete idea but financially it doesn't,because I really don't know what type of profit I will make just by guessing.So is there any resoursces out there who are willing to invest in my idea if they see the pootential? |
Reply :
A business plan is essential for obtaining a business loan. SBA has several resource partners to help you. They are Small Business Development Centers, SCORE, and Women's Business Centers. The counseling they provide is free with only a nominal charge for classes. (Classes include start-up, business plans, selling to the federal government, understanding cash flow statements.) |
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From : U.S. Small Business Administration
Location : Washington , DC |
Question :
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Reply :
Welcome to the SBA Chat. My name is Joe Loddo, distrit director of the Washington Metropolitan Area District. Let's dispel the myths about SBA. 1. SBA turnaround time is 24 hours 2. Many of our loan programs do not require paperwork (SBA Express) (PLP only at closing) 3. You do not need decline letters in order to be eligible for an SBA loan 4. SBA does not have grants 5. We are not the small business associations. |
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