Forums: Discussions for entrepreneurs and small business.

Recently I have just been turned down by a bank for a SBA loan because of collateral. Everything else is fine, except for the collateral. Problem is, I have a great space and a lease contract on-hand. I would like to get any advice on banks or other financial options that are friendly towards restaurant start up. I knwo there are a few leasing companies that can finance the equipment but i need cash for construction, T.I., permits and fees...etc.

I budget 150k for this pizza restaurant start up which includes 40k for 6 months reserve. I have excellent credit, 50k cash injection, 35k personal line of credit, and 20 in credit card lines (13% apr). I also have over 5 years in the businesss as a manager and about to get my Master degree.

I am considering starting my LLC and building my business credit through Dunn and Bradstreet with a company but I am worried that if that doesnt work out that I wont have anything to fall back on. I still have approximately 2 months before I get the lease. Does anyone have any suggestions or know someone i can contact in regards to getting funds? I would like a loan for at lease 75-100k.

Please email me and your help is greatly appreciated!

Leespizzahouse@aol.com

Perhaps you could partner with somebody who has collateral.  Work out a reasonable % ownership for the collateral infusion and off to the races.

I`m assuming that when you say the bank turned you down for an SBA loan "because of collateral" that you mean a lack of collateral?

Perhaps you applied for a loan from the wrong SBA program, the wrong lender, or both.  Did you apply for a 7a loan or an Express loan?

If you applied for the 7a loan, you might instead consider the SBA Express program which provides loans for amounts up to $350 thousand.  If the business plan, your equity investment and the projections all look good, then lack of collateral is not necessarily a deal killer for Express program lenders.  For the right lender.  The Express program offers the lender only a 50% guarantee compared to the 75%+ guarantee offered to 7a lenders.  But the SBA gives the Express program lenders a bit more flexibility and loans can sometimes be approved and funded within 3 weeks.

By the way, a written request for money is often very helpful in selling a borrower`s story to a prospective lender.   My blog posting "What Will a Banker Ask Me?" provides pointers on how to write this document. 

Hope this is helpful.

Marshall

I was looking into the different SBA programs. Are there any banks out there that you know of that are restaurant friendly? I dont think this bank was as aggressives towards restaurant. The banker (V.P.) was very supportive but his loan commitee wasnt.

Any restaurant friendly banks out there that you can recommand?

In what city are you located?

Stockton, CA but I am willing to work with any Bank from S.F. to Sacramento.

Lee

Lee,

Please give me a call in the afternoon to discuss if I`m able to help you.

Marshall

GOOD DAY,

     IF YOU NEED FINANCIAL ASSITANCE YOU CAN CONTACT tandata_loan_company@yahoo.com THEY CAN HELP YOU WITH A LOAN OKAY.THANKS

Tandata.. are you one of those "investor" or "scam artist" from Nigeria or London...whatever you claim yourself to be from? What sup with those people anyways? Do those "investor/banker" from Nigeria actually have so much money that they want to invest it in the U.S. at 5% ROI? Have anyone else ever ran into one of these guys?

I was on craigslist list and responded to an add from a "lender" from Nigeria. It was so retarded! He would call me one minute at a time, and adjust my loan to anything I want... "oh.. you want 50 at 5%.. Okay! wait.. you want 100k at 3% okay!! just give me your information.. including s.s. and bank account!" hahhahaa I thought it was the must funny thing... please give your inputs! Another guy actually cut and paste the HSBC sign onto his email and straight up ask for my name/s.s./drive license #/ and b-day. I was like.. humMm... now which banker from HSBC would do business this way. 1 minute approval or 100K. funny... but i guess there are really people dumb enought to fall for these loans.