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Thread: Best bank for small business

  1. #1

    Default Best bank for small business

    Does anyone know of a bank that will loan money to a small business? I have been to several of the big banks and it seems impossible to get any loans or line of credit.

    Thanks,
    Adrianne

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    I'm not sure it'll be any easier to get a loan from a small bank than a big one. Banks typically loan to business who they can be sure can pay them back, which is often businesses that don't need the money. I think now, given where the economy has been it might even be a little harder than usual to get a loan.

    What do you need the money for? Maybe it's more a matter of how you present your case to the banks? How have you been asking for the loan or credit?
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    We need to the money for growth. Some of our products need more testing. By performing more testing, we could open up new markets for revenue. But to be honest, my credit took a hit when I started the company in 2008. My credit is now right at 700. So I would like to try again for a loan or a line of credit.

    I noticed that you are from Boulder, Colorado. I went to school at the University of Colorado in Boulder. I lived there for many years until I moved back home to Texas.

  4. #4

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    WatermaxLLC who do you do your banking with currently, work with them first. They know you and currently invested in your business and more likely to understand you and also extend credit. Are there any merchant banks you are working with currently?

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    If you need the money for growth that's another story. I assume your business has a history that shows it can make money. I would think if you could present the case well and show how the loan will help you make money it would be realistic to get a loan. How have you been presenting to them? I wonder if it's more to do with the presentation than anything else. I think the main point with getting a loan is convincing the bank that you'll be able to pay it back.

    How long ago were you in Boulder? I live on the north east side of town now, but I used to live close to the university. For a year or so I worked up on the Hill and rode my bike through campus every day to get there.
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    Don't expect to get a loan or a line of credit for the "business". They really will be loaning you the money - meaning you will have to personally guarantee paying the money back regardless of the success of the business.
    Steve B

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    if you have a decent amount of business assets to lend against, Union Bank has some unique asset-based lending programs to take a look at.
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    Not sure that a business loan would be your best option for what you outlined. You should be using other resources like equity or earnings to testing your product and markets. Loans are leverage - you leverage current revenue in a lump sum amount (called a loan) to generate even more revenue - enough revenue to repay the loan with interest and fees as well as enough revenue to handle these things that you are trying to accomplish. You never use a loan for something that does not directly generate more revenue or at least generate an equal amount of cost savings.

    Best bet - find another way to test your product and your market.

    If you still want a loan - you might have to look for loans other than traditional business loan like alternative loans that leverage financial assets, micro loan or even personal loans (which are easier to get). But, if you really need the funds, then it should not matter where the money comes from because after you get it - it all spends the same.
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    Alternative financing may be your best choice in the near term, but you will need to build a relationship with one or more banks to eventually take advantage of the lower interest rates banks provide. I highly recommend that you reach out to small, business-focused community banks in your city or geographical area. For these banks, small businesses are their bread and butter. Many of those on the board of directors of these bank are entrepreneurs. Do not just apply willy nilly for business loans at banks. Instead, focus on community banks and seek out an introduction to someone at a Vice President level or higher. Branch managers have little (typically $25,000 to $50,000) signature authority. This is the amount that they can approve without going up the food chain. VPs typically have signature authority of up to $250,000. Even if the bank operates on a committee approval system, the VP's recommendation carries much more weight.

    You can network through LinkedIn, your church, organizations and associations you belong to. You want an initial introduction which leads to a meeting. When you get the meeting, bring a 2-5 page Executive Summary of your business. This shows the VP that you know your business and are prepared. You may not get a loan immediately, but you will lay the foundation for getting a loan within the next several months. If you impress the VP, then s/he will tell you what they need from you or your business or where your business needs to be to obtain a loan. If the first bank relationship does not pan out immediately, pursue another one while cultivating the first one. Make your business banker a key component of your networking strategy and you will get your loan.

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    Have you looked into alternative financing? That may be a good place to start. You should also look into seeing if you qualify for any grants, or possibly check into crowd-funding.

    Check out SBA.gov, they have a lot of listings of Lenders.

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