Anyone received a small business loan here? Need advice

[Snow007]

Normally I'm against credit but I've come up with some great innovative ideas for a widely used product that I'm very confident will be commercially successful. There is no other realistic way for me to be able to start this business without credit.

Just a bit of a background, I'm a 22 year old Ontario business administration/marketing student graduating this April, currently unemployed with very little income but that'll change when I graduate and become employed. I currently have no debt and no student loans but I have very little assets that I'm unwilling to part with or would be necessary for the business.

I'm going for a small business loan (need about $3000-$4000) and was hoping someone here could tell me about their experiences with receiving a small business loan. What questions were asked, how much credit they received, how much information about the business they had to give out, etc.

Any information is greatly appreciated!

[Cleveland Metal]

Don't know how it goes in Canada, but you'd generally have to have a pretty complete business plan with a presentation plan for the initial contact. Regardless of the other missing pieces, you should probably at least be working on that for the future.

I'd also recommend taking some focused small business/entrepreneurial courses to shed light on the small biz side of thing that your current course study isn't touching on. It's really cool stuff and different that what your probably taking now.

Considering your situation you've explained, un-employed, no assets or prior credit history, I'm thinking it doesn't look promising.

I believe there are some people in the know here that will give you a real idea other than my ramblings.

I'd guess really tho, for a small amount like that, you'd just be seeking a personal, unsecured (high interest) loan.

[Carbuff]

For that little amount, (is that in canadian $ ?) you could probably just get an unsecured personal loan or even take a cash advance on a credit card. Can you get a friend or family member to co-sign something for you? Perhaps a benefactor who "believes" in your product?

[missionguitars1]

Yeah - sounds like credit card terratory (loans with the SBA down here are for larger amounts).

Check out www.nolo.com for some good books on advice to start your own business....

[xenophobe]

You need a full business prospectus detailing how much money you need, what every single dollar is going to be used for, how and when you'll repay it, projected earnings for at least several years, etc...

You'll also need to provide all your education and work experience, full credit check, they'll probably want to see your tax returns even.

It's really a pain in the ass to get a small business loan. I considered it once, and saw that to put a package together to submit one would cost a lot of money.

Oh, and if your credit sucks, forget about it.

And getting a grant is almost impossible.

[Snow007]

First off, thanks to all those who've responded.

Even though I have a good credit score (720) and a single credit card with no late payments in my life (3 years with a credit card), I have no legitamate income and getting a loan from any financial company/bank seems hopeless (already had 2 places saying they wouldn't touch me and it's unlikely any others would).

On Monday I have an interview with Enterprise Brant which is a Community Futures Development Corporation funded by Industry Canada / Fednor to deliver a wide variety of programs and services to support community economic development and small business growth in Brantford / Brant. I'm being optimistic but I'm quite sure this is only for people collecting employment insurance, welfare or currently employed from what I've been told.

I'm preparing the business plan they gave me to fill out and hoping I fit the criteria necessary so that I can begin immediately. If I am unable to get a loan it looks like I'll just have to start on this once I become employed in a month or so.

[mattsmusiccenter]

$4K is a pretty small amount of money. If I were you I'd just call my credit card company and get them to do a credit limit increase. Then either do a cash advance or just pay for your expenses with the card. Cards are great because the money is there instantly and you don't have to ask anyone's permission to use them. The downside is the interest rate, but there are ALOT of low interest cards on the market and if used correctly they can be of huge benefit.

I've been dealing with banks, credit cards and loans for 20 years. Generally speaking the only time banks are willing to give you money is when you don't "need" it. I started my shop with credit cards and then once I had an established track record I got a lower interest loan and paid off my cards.

You can learn alot at www.score.org
This is a bunch of retired business executives, loan officers and business owners. SCORE exists to help out guys like you. Best of all, it's free.