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Bank Financing

by rmartin, Window Shopper

  • Created: March 23, 2010, 9:18 am
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6 comments

My business partner and I started our business 6 years ago. We are a healthcare management company that provides management of the physician practice from financials, accounts payable, HR, payroll, operations to billing and collection services.  We used our personal assets to secure financing for this business.  As our business grows we need additional working capital.  In addition, we lost a large client that was acquired by a large health system that significantly impacted our revenue.  We have a nice opportunity for future growth with a local hospital.  Our current loan is now due and we have been unable to obtain a bank loan for the current line plus additional working capital needs.  We have thoroughly researched the SBA loans and have been told that this is the avenue we need to pursue.  However, two banks (one local small bank and one large bank) have denied our requests indicating they don't understand our receivable or they think we are 'under capitalized'.  The SBA has indicated that their program is exactly what we need and they are wiling to help, yet the banks have told us that they don't give any credence to the SBA.  We have a very viable business with an incredible business plan and model.  We need additional financing to hire staff, obtain hardware and software, and to help with some debt build up.  My business partner and I have put up all of our personal assets and business assets.  These cover our current loan.  However, we need an additional $300,000 to $400,000 now.  With the SBA guarantee (they will guarantee up to $2 million), we are not sure why the banks are not willing to assist us.  We put all of our earnings back into our business.  We do not take large salaries - only what we need to pay our expenses.  We are not asking for millions of dollars - total loan would be about $1 million.  We are an excellent small business employer (in the State of Maryland).  We are frustrated that these big companies are being 'bailed'out by the government(whose executives earn millions and millions of dollars) and yet small businesses cannot seem to get a break even with the amount of personal and business assets we have to pledge.  Although the SBA is willing to help, the banks have to approve the loans first.  If anyone has any information or suggestions to help, I would be very appreciative.  Thank you.

Tags: Discuss Popular Topics, Loans & Grants
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hostingdiva | Creator | 1/18/2011 - 8:45 am

Hi rmartin - This is a repost of what I just wrote in another post. I think it is applicable in your situation as well. Being in Maryland, you are well situated because you have a lot of wealth in your area so you'll have additional resources to pull from (e.g., NY, CT, etc.). I hope you find the suggestions helpful :) Even though venture capital funds are not traditionally used in this manner, I would contact some venture capital firms. There are MANY big scale inventors who are currently looking for places to put their money. They may consider giving you that loan just because you can pay them a return on their investment. You can do a search on google for venture capital firms and just e-mail/call a few and/or even send your package. Tell them your situation and see if they have any suggestions. You can also get a list of attorneys who do estate planning in your area. Contact them to see if they have any clients who may be potential investors. Much of the time, these attorneys are looking for great opportunities for their clients. Finally, get a list of attorney who work with Angel investors (which are very similar to venture capital investors). You can look to http://martindale.com for a list of attorneys. Use the search term Investments or Venture Capital. If you live in a small town look to local larger towns. You can even consider going outside your state. Don't be concerned if you don't get responses - all you need is one to say yes!
Professional Web Site: http://pagebuzz.com

hostingdiva | Creator | 3/23/2010 - 9:18 am

Hi rmartin - This is a repost of what I just wrote in another post. I think it is applicable in your situation as well. Being in Maryland, you are well situated because you have a lot of wealth in your area so you'll have additional resources to pull from (e.g., NY, CT, etc.). I hope you find the suggestions helpful :) Even though venture capital funds are not traditionally used in this manner, I would contact some venture capital firms. There are MANY big scale inventors who are currently looking for places to put their money. They may consider giving you that loan just because you can pay them a return on their investment. You can do a search on google for venture capital firms and just e-mail/call a few and/or even send your package. Tell them your situation and see if they have any suggestions. You can also get a list of attorneys who do estate planning in your area. Contact them to see if they have any clients who may be potential investors. Much of the time, these attorneys are looking for great opportunities for their clients. Finally, get a list of attorney who work with Angel investors (which are very similar to venture capital investors). You can look to http://martindale.com for a list of attorneys. Use the search term Investments or Venture Capital. If you live in a small town look to local larger towns. You can even consider going outside your state. Don't be concerned if you don't get responses - all you need is one to say yes!

BizResearcher | Window Shopper | 1/18/2011 - 8:45 am

Show Replied Text…
Hi rmartin - This is a repost of what I just wrote in another post. I think it is applicable in your situation as well. Being in Maryland, you are well situated because you have a lot of wealth in your area so you'll have additional resources to pull from (e.g., NY, CT, etc.). I hope you find the suggestions helpful :) Even though venture capital funds are not traditionally used in this manner, I would contact some venture capital firms. There are MANY big scale inventors who are currently looking for places to put their money. They may consider giving you that loan just because you can pay them a return on their investment. You can do a search on google for venture capital firms and just e-mail/call a few and/or even send your package. Tell them your situation and see if they have any suggestions. You can also get a list of attorneys who do estate planning in your area. Contact them to see if they have any clients who may be potential investors. Much of the time, these attorneys are looking for great opportunities for their clients. Finally, get a list of attorney who work with Angel investors (which are very similar to venture capital investors). You can look to http://martindale.com for a list of attorneys. Use the search term Investments or Venture Capital. If you live in a small town look to local larger towns. You can even consider going outside your state. Don't be concerned if you don't get responses - all you need is one to say yes!
I agree with the previous post that money may be available from an angel investor (probably the best bet) or a venture capital firm. However, angels and VC firms don't like, and may not respond, to a cold call. They like pre-qualified investment opportunities. Therefore, the best way to find someone may be through a referral from your attorney or CPA, someone who knows you and can vouch for your character and your financial status and ability to repay. Your attorney or CPA can also match you with the firm most likely to invest in your type of business, since angels and VC firms have their preferences.

phanio | Contributor | 10/4/2009 - 9:52 am

To go along with the venture capital response above - there are also SBICs that usually provide their investment capital in the form of loans - might also try there. You can find a listing on the SBA website. Also, if your bank does not want to help you - find another bank. There are still good banks out there that want your business. If you currently use a national bank - start looking at local or regional banks who may want your business. Or, if you use a local or regional bank - try a national bank. All banks have their loan policies and face differnt situations. Some may not lend because they are short of capital - others may lend just because they need more business or are trying to build market share. Thus, ask around - ask every single lender in your area - never hurts to ask. Message Edited by phanio on 10-04-2009 08:55 AM
Professional Web Site: http://www.businessmoneytoday.com/

phanio | Contributor | 3/23/2010 - 9:18 am

To go along with the venture capital response above - there are also SBICs that usually provide their investment capital in the form of loans - might also try there. You can find a listing on the SBA website. Also, if your bank does not want to help you - find another bank. There are still good banks out there that want your business. If you currently use a national bank - start looking at local or regional banks who may want your business. Or, if you use a local or regional bank - try a national bank. All banks have their loan policies and face differnt situations. Some may not lend because they are short of capital - others may lend just because they need more business or are trying to build market share. Thus, ask around - ask every single lender in your area - never hurts to ask. Message Edited by phanio on 10-04-2009 08:55 AM

BizResearcher | Window Shopper | 3/23/2010 - 9:18 am

Show Replied Text…
Hi rmartin - This is a repost of what I just wrote in another post. I think it is applicable in your situation as well. Being in Maryland, you are well situated because you have a lot of wealth in your area so you'll have additional resources to pull from (e.g., NY, CT, etc.). I hope you find the suggestions helpful :) Even though venture capital funds are not traditionally used in this manner, I would contact some venture capital firms. There are MANY big scale inventors who are currently looking for places to put their money. They may consider giving you that loan just because you can pay them a return on their investment. You can do a search on google for venture capital firms and just e-mail/call a few and/or even send your package. Tell them your situation and see if they have any suggestions. You can also get a list of attorneys who do estate planning in your area. Contact them to see if they have any clients who may be potential investors. Much of the time, these attorneys are looking for great opportunities for their clients. Finally, get a list of attorney who work with Angel investors (which are very similar to venture capital investors). You can look to http://martindale.com for a list of attorneys. Use the search term Investments or Venture Capital. If you live in a small town look to local larger towns. You can even consider going outside your state. Don't be concerned if you don't get responses - all you need is one to say yes!
I agree with the previous post that money may be available from an angel investor (probably the best bet) or a venture capital firm. However, angels and VC firms don't like, and may not respond, to a cold call. They like pre-qualified investment opportunities. Therefore, the best way to find someone may be through a referral from your attorney or CPA, someone who knows you and can vouch for your character and your financial status and ability to repay. Your attorney or CPA can also match you with the firm most likely to invest in your type of business, since angels and VC firms have their preferences.