Forums: Discussions for entrepreneurs and small business.

When I had applied for my business startup loans in the past, before hiring the brokers, one of the questions they asked me is how much I make a year. I would answer, "I make X, but this is a business startup loan. On receiving this loan, I'm not going to have this job anymore. Don't you want my projected income from the business I'm starting instead? That's what'll be paying you back." The answer was, "You're not assured to make Y a year because the business hasn't started yet." My closing statement was, "I am assured not to be making X a year when I quit my job. Should we put down $0.00 for my yearly income then?" It makes no sense whatsoever. If I was keeping my current job, I wouldn't be taking out a business startup loan. They might as well ask what I made at my first job, or my second - both are just as completely irrelevant to the situation at hand. That situation is, "How will I repay the loan?" and the answer is, "Either with the Y dollars a year from the new business, or I'll go bankrupt." Neither answer is, "My old employers would be happy to hire me back and I'll pay you with the X I make now."

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Making limitless possibilities much more limited.

Can I service the loan? My answer is, or should be, the same as every other entrepreneur in the world: I can repay the loan if my business plan succeeds. This isn't a mortgage. This isn't automobile financing. Those loans aught require steady employment, and they aught to use current employment to determine loan eligibility. This is a "business startup loan", and by definition is speculation. No wonder so many banks needed bailouts. They can't see reality. Evaluate the risk of my business plan, I say, but pass or fail me on realistic measures.

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Making limitless possibilities much more limited.