View Full Version : Business line of credit.
dmontzsta
05-24-2005, 03:35 PM
I have a long story, but I will make it short, unless someone wants to know more, then we can chat through PMs. Basically, I need to know how to go about getting a business loan or line of credit. Any business owners who have done this, I would appreciate the advice, this is for a start up business.
Thank you.
ChumpChange
05-24-2005, 03:38 PM
Make a business plan would be a good start or pay me lots of money to develop one for you.
jdogginla
05-24-2005, 03:40 PM
You will need a buisness plan for sure..........pm if you need help. I've put together a few in the last few months.
ChumpChange- your in the banking/loan biz right? I may have to have you tweak mine our use mine as a basis for one.
ChumpChange
05-24-2005, 03:45 PM
ChumpChange- your in the banking/loan biz right? I may have to have you tweak mine our use mine as a basis for one.
Yup, still am. Commercial Loans and Business Financing. Let me know if you need anything.
You got PM. :D
Do you qualify for a Business Loan (SBA Link)? (http://www.sba.gov/starting/qualify.html)
dmontzsta
05-24-2005, 04:05 PM
We have a business plan. We just need to get the funds to present a buyout to the current owners, or to break away and start our own business. Me and my partner have been in this business working for people who know nothing about it for 7 years each, we a professionals in this brokerage and are ready to do our own thing, I think the owners would go for it. They really have no choice, we run the business without us it is closed, so they could either get some money or close up shop.
moneypit
05-24-2005, 04:07 PM
If you ever have any questions PM me.
ChumpChange
05-24-2005, 04:12 PM
I would recommend working on a buyout price prior to applying for bank funds for a few reasons. First:You're going to want to know how much you can be approved for? Second:The bank is going to want a purchase agreement. Third:Maybe you can qualify for the amount but it will put unneccessary pressure on your current financial situation. Would you still want to do it?
People who own boats always think their boats are worth more than other people are willing to pay for them. People who own businesses are the same way. They may want to sell it for more than you are willing to pay because in their minds, they think it's worth that much.
dmontzsta
05-24-2005, 04:24 PM
I would recommend working on a buyout price prior to applying for bank funds for a few reasons. First:You're going to want to know how much you can be approved for? Second:The bank is going to want a purchase agreement. Third:Maybe you can qualify for the amount but it will put unneccessary pressure on your current financial situation. Would you still want to do it?
People who own boats always think their boats are worth more than other people are willing to pay for them. People who own businesses are the same way. They may want to sell it for more than you are willing to pay because in their minds, they think it's worth that much.
You have some good info. The plan we came up with is if they ask for more than $30k, then we will break off and do our own thing. We can get a business off the ground for $30-50k.
The reason we dont want to offer a buy out before getting the funds is, we could offer a buyout on Friday and be out of jobs on Monday leaving a scramble to get our business off the ground. I have talked to a few of my customers and they are willing to go with, since they dont know anyone else in this business but me and my partner. (We never signed agreements).
You have some good info. The plan we came up with is if they ask for more than $30k, then we will break off and do our own thing. We can get a business off the ground for $30-50k.
The reason we dont want to offer a buy out before getting the funds is, we could offer a buyout on Friday and be out of jobs on Monday leaving a scramble to get our business off the ground. I have talked to a few of my customers and they are willing to go with, since they dont know anyone else in this business but me and my partner. (We never signed agreements).
Be very careful about taking customers if you start a separate gig. In California, it does not matter whether or not you have an agreement or non-compete contract. CA is a right to work state, but, if you cause any financial hardship to a previous company due to activities like taking customers you gained knowledge of by working for them (never mind the owners don't know jack), that would stick in court. I have been on both sides of court cases like this. I was sued for a non-compete which didn't hold up, and another company I was working for sued a competitor who left to start his own gig and took customers with him...he was fined and was ordered to cease and disist all business with the customers layed out in the law suit, which shut him down.
Jrocket
05-24-2005, 04:52 PM
Does this mean theres going to be a new hot dog cart guy in front of Home Depot soon?
coolchange
05-24-2005, 04:57 PM
Does this mean theres going to be a new hot dog cart guy in front of Home Depot soon?
I think it cost more than 30k to start a catering business! :D
Go for it Dmon.
Jrocket
05-24-2005, 04:58 PM
I think it cost more than 30k to start a catering business! :D
Go for it Dmon.
Those hot dog carts are more than 30K??? Cheese and rice thats outrageous...
coolchange
05-24-2005, 05:06 PM
No, but a new one is expensive. and you have to be attached to a catering address adn permits etc. I watched one of those guy at HD for about an hour once. Figured he was makin about 60 an hour min. Then talked to him and he does some outrageous hours. Seen Knessel lately?
Cheese and rice thats outrageous...
Thanks for that...I have been looking for alternative phrases I can say around my kids.
I started using "Goat Bammit" to replace another popular phrase.
:rollside: :rollside: :rollside:
Jrocket
05-24-2005, 05:09 PM
Thanks for that...I have been looking for alternative phrases I can say around my kids.
I started using "Goat Bammit" to replace another popular phrase.
:rollside: :rollside: :rollside:
I got tired of trying to hide it,my daughter just scolds me now instead.Much easier.
dmontzsta
05-24-2005, 05:40 PM
This brings up a good debate about the whole customer issue. Basically, my customers have said if I leave, they will not do business with this company and would go elsewhere (if not with me).
PHOTOGLOU
05-24-2005, 05:42 PM
I have a long story, but I will make it short, unless someone wants to know more, then we can chat through PMs. Basically, I need to know how to go about getting a business loan or line of credit. Any business owners who have done this, I would appreciate the advice, this is for a start up business.
Thank you.
Try talking to a friend of mine (Best friends for 20 years) he is a senior V P of Wells Fargo Bank He is in charge of business lines of credit from 100k to 3 million. His mobile number is 714 269 6051 tell him Jay Photoglou refered you and he WILL take the time to walk you trough what you are going to need and THEN send you to one of his employees to set the loan up HE DOSEN'T SELL you or take you too far through the process That's what his employees do......
Calif is a right to work state? Yeah right. Az, Nev, Tex, since when has Calif had that designation. Don't think so!
Rio
It is a CA legal term, not the motto, unless you are an illegal alien. :jawdrop:
Seriously, it is a right to work state and non-compete clauses are not legally binding in CA, unless they can prove financial hardship caused by information/customers taken by the ex-employee.
I had signed a non-compete with a company, but they thought they would get me because they were bases in Ohio - which non-compete are legally binding regardless. I had 10 years in the industry prior to working for them. I worked for them for about a year and left...and they thought they could sue me out of my industry. They tried to sue me in Ohio, but were unable, so they had to come to CA. They spend a lot of money just to have the judge toss it out before even hearing from them.
ChumpChange
05-25-2005, 07:07 AM
Try talking to a friend of mine (Best friends for 20 years) he is a senior V P of Wells Fargo Bank He is in charge of business lines of credit from 100k to 3 million. His mobile number is 714 269 6051 tell him Jay Photoglou refered you and he WILL take the time to walk you trough what you are going to need and THEN send you to one of his employees to set the loan up HE DOSEN'T SELL you or take you too far through the process That's what his employees do......
Jay: Who's your buddy? I worked at Wells six years prior to coming over to US Bank.
PHOTOGLOU
05-25-2005, 07:10 AM
Jay: Who's your buddy? I worked at Wells six years prior to coming over to US Bank.
Mike Horton Talk about a power couple His wife Jennifer is a V.P. of Bank of America (for private banking) and her father is V.P. of Ralphs
Jay: Who's your buddy? I worked at Wells six years prior to coming over to US Bank.
We have a few revolving credit lines in the $100K range with US Bank. On the whole they have been good to work with.
My input would be- More inportant than getting a loan, is who your gettin it from. Most likely you will be working with that co for a while and if they are retards it will make life hard to concentrate on getting your biz off the ground.
lucky
05-25-2005, 07:19 AM
Be very careful about taking customers if you start a separate gig. In California, it does not matter whether or not you have an agreement or non-compete contract. CA is a right to work state, but, if you cause any financial hardship to a previous company due to activities like taking customers you gained knowledge of by working for them (never mind the owners don't know jack), that would stick in court. I have been on both sides of court cases like this. I was sued for a non-compete which didn't hold up, and another company I was working for sued a competitor who left to start his own gig and took customers with him...he was fined and was ordered to cease and disist all business with the customers layed out in the law suit, which shut him down.
free isn't free anymore ! as in free enterprise !
Big Warlock
05-25-2005, 07:44 AM
This is a good thread in general. But I have a few questions.
How long has the business been around prior to you guys coming in?
You guys apparently are running the operational side, but what about the business side? I know lots of great companies that get started as a family affair and then grow into something beyond the family's control.
There are many types of loans. Buying an existing business is a great way to go. They have a history of revenue etc. etc. What bank do they bank at? They would have a history at that bank. If you can talk to the owners about what you want to do, the current bank that they bank at will be a good source of information and they have the history of the company.
An SBA loan sounds like a potential solution. It wuold be guaranteed by the government. But I think you might need more than just $30K. If $30K is the buyout price, you still need working capital etc. etc. Many of these questions can be answered in a business plan. Sounds like it's a catering business? You have to have bucks to pay for food, employees, insurance, fuel transport, etc etc. Having a SBA loan for a part of the buyout and then a line of credit attatched to a credit card account at the bank would be easiest and clean way to operate. Agin, I don't know the type or scope of your business.
Owning your own business is a wonderful experience. But I think some of it is like a boat. Happiest day of your life? You know? Day you buy........day you sell..........
Best of luck to you!!
Rob :mix:
dmontzsta
05-25-2005, 08:19 AM
This is a good thread in general. But I have a few questions.
How long has the business been around prior to you guys coming in?
You guys apparently are running the operational side, but what about the business side? I know lots of great companies that get started as a family affair and then grow into something beyond the family's control.
There are many types of loans. Buying an existing business is a great way to go. They have a history of revenue etc. etc. What bank do they bank at? They would have a history at that bank. If you can talk to the owners about what you want to do, the current bank that they bank at will be a good source of information and they have the history of the company.
An SBA loan sounds like a potential solution. It wuold be guaranteed by the government. But I think you might need more than just $30K. If $30K is the buyout price, you still need working capital etc. etc. Many of these questions can be answered in a business plan. Sounds like it's a catering business? You have to have bucks to pay for food, employees, insurance, fuel transport, etc etc. Having a SBA loan for a part of the buyout and then a line of credit attatched to a credit card account at the bank would be easiest and clean way to operate. Agin, I don't know the type or scope of your business.
Owning your own business is a wonderful experience. But I think some of it is like a boat. Happiest day of your life? You know? Day you buy........day you sell..........
Best of luck to you!!
Rob :mix:
Hi Rob,
Let me answer some of this so everyone can have a little more inside.
The business was started in 1996, however the part of the business me and my partner run started when we came in. We came from a company that closed down and the owners now invested some money to start it up and "borrowed" some of the customers to get started. I built this business from ZERO. When it was new I got on the phone and made calls and knocked on doors to get it to a steady pace it is at now.
The owners sort of handle the business side. They look at the profit and losses and tell the account what to pay, etc...we do have a cpa that comes in every so often.
haha, no it is not a catering business. It is a brokerage.
uclahater
05-25-2005, 08:32 AM
All you have to do is send a Post Card with an announcement that you've gone somewhere else. You cant call them, and sullicet them with knowledge you've obtained from this company. For example you cant call a customer, and say "Your paying 2 bucks a piece, and I can lower your price to $1.75 This is considered an unfair advantage. But you can answer any questions that the customer has, and they can choose to use you. Dont take anything from this company especially files that would be suicide. Just take your personal belongings, and make them sign a a document where you,ve written down everything that you took.
Jim
ChumpChange
05-25-2005, 08:41 AM
I will let you know that service businesses with no tangible assets such as brokerage houses are more difficult to get loans for. It's all in the structuring.....I mean packaging.
A hot dog cart would be easier.
dmontzsta
05-25-2005, 01:30 PM
Jim, I would like to thank you for the phone call last night, I took alot out of it, especially the way to approach the customers. I would still like to proceed with my originally plan, but everything is a possibility at this point, time will tell.
ChumpChange: I also would not make that much money with a hot dog cart and also I would be owning a hot dog cart. :D
totenhosen
05-25-2005, 01:39 PM
I will let you know that service businesses with no tangible assets such as brokerage houses are more difficult to get loans for. It's all in the structuring.....I mean packaging.
A hot dog cart would be easier.
He's right there isn't much there for a bank to take as collateral. So if I understand this you are not actually the business owner but want to buy the guy out. Conventional financing won't work nor an SBA express loan (pretty cool product since it is scored driven and not by financial statement).The only financing I could see the bank I work for doing is an SBA loan 504 or 7a (I always get the two confused since I don't underwrite them). If my Bank passes on it I know a guy that brokers SBA loans and he'll get it done for you. Let me know if you are interested.
ChumpChange
05-25-2005, 01:58 PM
What bank totenhosen?
Dave C
05-25-2005, 02:40 PM
I just did what you are talking about, minus the loan.
Be very careful talking to your customers before you leave. Do not tell them what you are doing until AFTER you leave. You have a legal duty to be "faithful" to your current company while still employed. Conspiring with their customers while employed is not allowed.
After you leave its OK to contact their customers. Be careful using any "proprietary information" that belongs to your old employer.
DO NOT under any circumstances take any documents, information or destroy any information that belongs to your old employer (or at least so they can't prove it, if you know what I mean) ;)
I did the same thing you did. (but we said f-ck the old owner and left without making an offer) We did some research and consulted an attorney on this before leaving.
Also our attorney told us that by making an offer it could backfire if it is subsequently turned down and then you leave and start your old business and take their customers. It can be construed as an admission of guilt.
PM if you wish, I'll be happy to share some info.
Good luck. (go for it!)
You have some good info. The plan we came up with is if they ask for more than $30k, then we will break off and do our own thing. We can get a business off the ground for $30-50k.
The reason we dont want to offer a buy out before getting the funds is, we could offer a buyout on Friday and be out of jobs on Monday leaving a scramble to get our business off the ground. I have talked to a few of my customers and they are willing to go with, since they dont know anyone else in this business but me and my partner. (We never signed agreements).
Jrocket
05-25-2005, 05:38 PM
Mike Horton Talk about a power couple His wife Jennifer is a V.P. of Bank of America (for private banking) and her father is V.P. of Ralphs
NO WAY!!! I totally shoppped at a Ralphs once,what a small world....LMAO.......J/K :D
Jrocket
05-25-2005, 05:38 PM
I must have missed it,what kind of buisness will this be?Type of work?
ChumpChange
05-25-2005, 05:46 PM
NO WAY!!! I totally shoppped at a Ralphs once,what a small world....LMAO.......J/K :D
When I worked at the Claremont Ralphs during high school, I worked with the CEO's son. The CEO calls up the store manager one day and says "my son has an interview with you tomorrow." A few days later, he was hired. Now that guy was power guy. Came walking in all the time with his Presidential jacket for donating so much money to Clinton and the DNC.
Big Warlock
05-25-2005, 05:55 PM
And SBA loan to do the buyout. That way you don't have to have collateral. Although you will have to promise your house, kids, toys, etc. etc.
A line of credit on the receivables. It makes life really easy if you can get that. Again, history is the key here. The bank they currently do business with is the best place. In addition, a friendly buyout would be helpful with the bank.
Best of luck. Hope you get it done.
As a backup, equity in your homes?
As a backup, backup.......venture capital....but the deal would be pretty small and they WILL own you forever and pay outrageous interest on the money.
Rob
dean51267
05-25-2005, 06:31 PM
Dean Owen, Dean@owencpa.com, I set up lines of credit for business owners every week with different banks. Call if you need a hand - 888-OWENCPA
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