Ready, Fire, Aim
by docwebtrc, Performer
- Created: April 3, 2009, 4:25 pm
My business is poised to grow, possibly significantly, and I am very fortunate to have found a source of private capital. I've been reading all these postings trying to learn about the process of getting bank funding - possibly SBA secured. And, I'm just being honest here, if the government is trying to help, then they are really missing the boat. Small and micro business, if nurtured, will grow and create jobs. When one reads all these postings, the theme is clear and consistent.
1) If you have no profitable record, use the 'bootstrap' and borrow on your own credit cards, 2nd mortgage, friends/family, etc.
2) If you have a profitable record, go to the bank but the bank wants you to personally have the ability to pay, have cash flow and collateral assets.
If either of those options is viable - why do I need SBA? If I personally have the ability to repay the loan, the bank will lend it to me to buy a boat, go to Costa Rica or start a business - they don't care, as long as I can personally repay it.
The gap - and you can see this gap in any number of postings on this board - is those individuals wanting to build a business that have already blown their own credit rating (bootstaps) or who don't have a full time job. I saw one response to a business owner that said 'why don't you go get a part time job to finance your business' ???????
I won't rant (for too long) as to how our government sat by idly (thank you SEC) and watched our big financial institutions bet billions on really bad ideas that did not create any sustainable employment.
What I believe the government needs to do, and the SBA is probably the right place to do it; is to create a program that guarantees the loans that banks make to LLC's, s-corps and the like that is based on the business, its' viability and its' potential for employment and NOT on the personal resources of the owner. If we did this and somehow the big bankers came along for the ride, we would hasten the end of the recession, start a major uptick in employment and rapidly grow the GDP. Yes, there would be larger losses in the SBA account, but maybe we could sell off a little piece of GM (Government Motors) to cover the bill.
Just my opinion - I could be wrong.
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