[NGE-CEO]

Pros and cons......which is the best route when financing a venture?

Reasons why?

Thanks

[ChaseManset]

There is no such thing as a "SBA Loan". What you mean is a SBA backed loan. To apply for a SBA backed loan, you must first be turned down by a bank for a standard business loan. You can learn all this information at www.sba.gov.

[kbud124]

um..you need to learn the terminology

the "sba loan" is actually a loan backed by the sba..its made by a regular bank

a term loan is a type of loan..fixed term, can only draw down once, etc..as opposed to a revolving facility which works like a credit card..use revolvers for working capital..term loans for acquisitions, equipment, etc (long-term assets)

[jasaunders]

Originally Posted by ChaseManset

To apply for a SBA backed loan, you must first be turned down by a bank for a standard business loan. You can learn all this information at www.sba.gov.

This is not true.

[ChaseManset]

Originally Posted by jasaunders

This is not true.

"In order to be eligible for an SBA Loan, you must apply and be turned down for a conventional loan by a commercial lender. By law, the SBA may not guarantee a loan if a business can obtain funds on reasonable terms from a bank or other private source." - sba.gov

Do your research before discrediting someone.

[jasaunders]

Chase... I have received an SBA loan, I currently have a $25,000 line of credit backed by the SBA, I did not apply for any loan from a bank first. You are completely wrong.

[kbud124]

Originally Posted by ChaseManset

There is no such thing as a "SBA Loan". What you mean is a SBA backed loan. To apply for a SBA backed loan, you must first be turned down by a bank for a standard business loan. You can learn all this information at www.sba.gov.

this is absolutely wrong..i had received a $150,000 SBA loan from a lender without being turned down by another bank..i know many others who have done so also without being turned down (unless the law has changed in the last 2 yrs)

[jasaunders]

I received my line of credit in December, so no, it hasn't changed.

[ChaseManset]

There is some cognitive dissonance occurring here. Both my business counselor, a SCORE representative with the SBA, and in multiple courses from my university have stated this clearly to me. I suppose you could be correct, I'll take your word for it; however, this has come from very reliable sources with virtually nothing to gain from stating otherwise. On the other hand, this forum is filled with a bunch of nonsense, which we all can agree. Have to take everything with grain assault. Regards to my first quote, yes my terminology was incorrect, I was in a hurry trying to explain quickly an answer to his original question, which is, the SBA does not grant loans, only guarantees them for a third party lender. Next meeting with my counselor I will definitely bring up the subject. Until then, I rest my case and apologize for the confusion.

[GBerardelli]

For those who know more than I:

All of the information that I've seen regarding SBA is secured lending - i.e. lending with collateral involved. The problem with my business is that it really isn't based on any valuable collateral - there's no factory or office, everything is either outsourced or virtual (which is great for overhead, but not so great for financing!)

What does a small business turn when it has no collateral to secure funding? Thoughts?

[kbud124]

Originally Posted by GBerardelli

For those who know more than I:

All of the information that I've seen regarding SBA is secured lending - i.e. lending with collateral involved. The problem with my business is that it really isn't based on any valuable collateral - there's no factory or office, everything is either outsourced or virtual (which is great for overhead, but not so great for financing!)

What does a small business turn when it has no collateral to secure funding? Thoughts?

friends & family...personal loans...cash flow in the case of a natural, slower growth...VCs or angel investors if its a solid plan..work on the side if you have time.etc

[NewBizz]

I am trying to borrow $700,000 for a buisness and The bank is actully doing the paper work and submitting the loan for SBA approval, They have not turned me down, but say its in their best interest to submit it, the SBA backs 40% of the loan, the bank 50% and you need 10% down. All the money is from the bank the SBA or goverment just back 40%, like a co-signer (kinda)
The term is longer than a bank would normally do and the rate lower because it is backed by the SBA.