Small business loan advice needed

RBJtree

Well-Known Member
My business is in its 8th year and it's way past time to expand. I never really planned on building up my business, I just wanted to stay small and do everything myself, but I have realized in the last couple years that I can't keep going that way.
Does anyone have any advice on how to obtain financing for a small but established business? My credit isn't bad, but I have never done a lot on credit so my history is lacking which keeps my score in the "fair" range. Are there companies who loan based on business income rather than the owners credit? I'm concerned that if I start putting in applications, I will get denied and the credit pull will drop my score eliminating my chances with the next company. Are there companies who can use one pull for multiple apps? Like a loan broker? I don't know much about this side of things, obviously.
 

ATH

Well-Known Member
Go to a small community bank and talk to the commercial lending officer. They will talk about options. A good one will go through those things with you before pinging your credit score.

But BEFORE you do that, get a business plan. The local SBA and/or Chamber of Commerce are good places to get started with that. Put some real time into that plan. Besides (or maybe more important than) helping with financing, it helps focus your efforts.
 

ATH

Well-Known Member
We've never held a balance on a card. Never had a car loan. Both are big cash drains (a business truck is a different story than borrowing for a personal car - but I haven't done that either...).

Used to have a small LOC for the business (essentially a larger available balance, relatively lower interest credit card...) - but cancelled that many years ago. Only personal loan is a home mortgage that we pay on time.

Haven't looked lately, but last I knew we had a high score. I'm looking for more shop space for the business and loan officer said it wouldn't be a problem...

Speaking of that - you didn't mention: what are you looking to buy with credit? Equipment? Dealers will help arrange that. You may get slightly better terms at a local bank, but if you are struggling and don't have a bad credit history, the dealer wants to help you take the equipment home, so let them do the legwork. Property? If you have a 25-20% down payment, it will get a lot easier...they can repo and sell the property without a loss if there is enough equity in it... If you want to borrow for cash flow.....just don't start digging that hole!
 

RBJtree

Well-Known Member
Equipment is my biggest concern. I have 2 GM 3500's , a chipper, a backhoe and a trailer. I need a bigger dump, a bucket, and a stumper and mini loader would be nice. The bucket truck is first concern. I lease a 5000 sq. Ft. building with a 1 acre lot. I got a great price on that because it's next to a coke plant.
 

ATH

Well-Known Member
You might also consider a lease (with option to purchase at end). There was a discussion about that a couple of months ago... there are circumstances where it makes sense.
 

RBJtree

Well-Known Member
Ideally I would like to get several of the items on my list as soon as possible and with one loan, thus 1 payment.
 

RBJtree

Well-Known Member
I have the call volume to double my work load if I can get the work done. I believe a bucket with a chip box might be the ticket to cover me on my bucket and dump truck needs for now. Next is the stump grinder. Right now I save up stumps and rent one. It's not very efficient. If I could wrap a mini loader into it too I would be set. I doubt I could find some one to lease me all three at once, or one place who could sell me all three at once. Plus my budget will probably mean used for all items.
 

ATH

Well-Known Member
Buy a used truck and lease the grinder and/or mini??? Can you lease used equipment? I've never tried...
 

CanadianStan

Well-Known Member
I have the call volume to double my work load if I can get the work done. I believe a bucket with a chip box might be the ticket to cover me on my bucket and dump truck needs for now. Next is the stump grinder. Right now I save up stumps and rent one. It's not very efficient. If I could wrap a mini loader into it too I would be set. I doubt I could find some one to lease me all three at once, or one place who could sell me all three at once. Plus my budget will probably mean used for all items.
If you've got so much work you can't keep up with it ... you should be able to get some new equipment too.

At any rate, talk to your local bank, talk to the equipment dealer, and have an honest chat with yourself if you need the new equipment or if you'd be happy with your current setup, with a 20% increase in your prices ...
 
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RBJtree

Well-Known Member
Thanks everyone. I am leaning towards talking to a local bank. I do all my banking thru a large bank that is notoriously hard to get a loan from, but very convenient for me because they have branch offices all over the area. There is a smaller local bank with a great reputation not to far from me who I can talk to.
 
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Z'sTrees

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Is there anyone in your area reliable you can sub out stump grinding to? You can charge a percentage as a contractors fee and write off their cost as a sub. You might want to space those big purchases out for deductions at the end of the year.
 
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