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  • Got denied for a business loan

    I went to the bank today to see how much I could get approved for starting a mobile business. They basically(in short) said now isn't a good time to start any kind of business. He also said that in order to receive a business loan I would have had to owned the same type of business for 2 years???!??! I After they told me I could only be approved for about $5000. Now that to me just doesn't sound right. I know people who made less money than me and had car notes and mortgages to pay and got the money they needed. I guess I just need to keep on saving. And I just not asking the right questions? I thought I was pretty clear with them.

  • #2
    I would try another bank.

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    • #3
      Call the mobile company. they will have information on financing mobile vans. That bank does not sound business friendly to me. This is a great time to start a business if you are prepared, especially in this field. MANY banks dislike dealing with small business people and I do not understand why.

      Banks are stricter than you think about loans. I got one though 11 years ago for $15,000 to open. No credit, no collateral. I had a business plan and was able to show that I knew what I was doing. It took me 2 weeks to get the plan together.
      <a href="http://www.groomwise.typepad.com/grooming_smarter" target="_blank">My Blog</a> The two most important days in your life are the day you are born and the day you find out why. –Mark Twain

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      • #4
        I know nothing at all about loans but maybe try someplace else?

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        • #5
          Let me share several things, and keep in mind I have been a part of over 1,000 fundings of pet care business plans from $5000 to $12,000,000. I am pointing out some things that may not apply to you, but everyone in general in this predicament.

          1) Never feel as if your idea is being judged. Every financial institution has a "profile model" of who they lend to. It changes regularly too. Tightens and loosens, snaps like a rubber band. They can profile any which way they want. The result: all they are saying is that you don't fit THEIR profile model of what they want in a lender. That's it, plain and simple. In your case, their profile is telling you WE DON'T LIKE STARTUPS, but we may make loans to existing businesses, and that is common when the credit market is tight, but you haven't hit a brick wall except with them.

          2) Once you have closed negotiations with them, approach another. Don't go out and shop multiple banks, credit unions at the same time other than getting info, but once you start talking and they know who you are, stop, finish with that entity. They have ways of knowing who is going around bank to bank etc, and that isn't good to some lenders. Business account relationships are far different than personal checking/savings relationships.

          3) Go in with a personal financial profile ready. What is your personal net worth? Everyone asking for a loan should know that, and clean up your credit bureau records first. So many mistakes it's a ridiculous system at times.

          4) If you have a written business plan, you will get a better reception, but they want collateral and sometimes in mobile the vehicle itself is enough...but here we go again, what is their profile model?

          5) It is tougher to get loans now, it's worse than the news reports. But business will go on and most business selling essentials will survive even prosper. To millions having a clean pet is essential, but travel and luxuries will be affected. You may have to shop more. I would talk with the SBA too. There are banks that specialize in working with the SBA while others have a far more casual attitude. Always go to the central location for the bank chain. The branches in the grocery store or convenience bank centers in a shopping center are usually connected to a main branch where officers and board members of the bank reside. These main branches specialize in making decisions and true business banking. Keep in mind that most business loans must be approved by headquarters behind the scenes, they take a bad rap for making loans that go sour, so they are cautious. Don't take it personal, work with the SBA and banks they may recommend, and talk with SCORE reps in your area as well. There may be a special program you qualify for, another aspect of funding that seems to change regularly.

          6) If you only need financing for your mobile vehicle it's going to be a possible plus because all of the funds they give you over the vehicle purchase are high risk when you expend those funds for non assets, it's gone. Of course if you are buying a new mobile vehicle the conversion company has some assistance for you with financing. Also, the Barkleigh Management Group has financial assistance for business plans etc.

          7) If someone can co-sign that may help.

          I've known plenty of groomers that marched down to 10 or more financial institutions before things clicked, and every one of them had a different profile, but all wanted collateral for business loans. If you have no collateral financing a vehicle alone is often the route and use your savings for startup costs like advertising, tools, insurance etc.

          This is just some bits and pieces for a complicated topic.
          Most questions regarding GroomerTALK are answered in the Board Help Talk Forum. Thanks for coming to our community a part of PetGroomer.com https://www.petgroomer.com.

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          • #6
            I am right now working part-time grooming and part-time at a bank while I wait for the economy to get better to get my own business going.

            I have seen hundreds of loans from even established business getting denied and many stating the reason that the current economy wont support their type of business because it is "non-essential" and more of luxury services in general.

            So not that it will make you feel better but your not alone in that battle.

            But Maybe you can get an RV type loan through the dealership or something.

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            • #7
              Just a thought.

              I don't know what size/kind of town you live in, but most city/town's have a certain amount of money allowed every year as loans to encourage new businesses in town.
              The earlier in the year you apply, the more is available to loan, and the less picky they are. In my town, you would talk to someone at city hall about this funding, but usually it's the same place you would go to for a business license. It isn't advertised, so alot of people don't even know that their town has a fund for such things, and honestly I don't even know if every town everywhere offers this,,,,but it can't hurt to ask. I would think that they would be opposite to the banks, in that they would be willing to go out on a limb more to encourage as much business as possible for their town.

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              • #8
                There's no advice I can offer you,, but I know how you feel.. I've been denied too..Started house call as a way to have some kind of business of my own...

                Just wanted to say that I wish you the best of luck..

                J.

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                • #9
                  All I can say is, I'm glad I don't OWE anyone!

                  I didn't take out a loan for my lil shop and if I had to close tomorrow, I'd only be out what it cost me out of my pocket. I wouldn't have to worry about repaying a loan I could no longer afford to pay for.

                  However, my situation is a little different and things are tight, but I am growing slowly as my money allows and it's a much safer feeling for me. My hubby is wheelchair bound and I'm the only breadwinner (so to speak), so I feel better knowing it wouldn't be more of a burden if I couldn't work for whatever reason.

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                  • #10
                    I'm not sure how much money you think you will need but have you ever thought of just applying for a credit card with a low annual APR. Credit cards are getting more competitive these days and you can sometimes get a very low interest rate. Just a thought.

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                    • #11
                      well....

                      I was watching some financal guru guy on the tv last week, and he said that,
                      a new little trick that the banks have, is, they just passed this into law, (although the wording in the contracts are like three pages long, it boils down to)
                      They can and often do raise your intrest rate, whenever and to whatever they feel like
                      for NO reason at all.

                      There is no doubt, that they are loan sharks, and to big and powerful for their own good.
                      If your buisness flourishes and you can make the payment ok, but be very aware, they are betting agaist you and have stacked the deck. Most card purchases cost the borrower at least triple what they have been lent.

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                      • #12
                        I was also denied. My idea was to establish myself without a co-signer. Sadly, I had to bite the bullet - and my husband co-signed. Albeit - it was for a very measly amount - and the loan officer did say that gone are the days that people come in with nothing and make a fortune - so, I am established - but through a co-signer.

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                        • #13
                          You mentioned nothing about your credit---bad credit can really mess things up for you also. It is worth it to have good credit.

                          Tammy in Utah
                          Groomers Helper Affiliate

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                          • #14
                            Have you already worked mobile? If not I'd ride along with someone or work for someone else to make sure you enjoy it.I love it but it's not for everyone.Talk to Dennis at wgnts they have a great financing but you'll need at least 5,000 for a down payment.I bought mine in Jan. of 07 for 1.9% ot was cheaper for me to buy new than get a loan at 7.9 for a used.

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