Small Business Loans for Restaurants

Small Business Loans Ontario: CSBFP and BDC Financing | Mentor Works

Listen in! Pick up some expert advice to a reader's question that we selected from CyberSchmooz. For more biz answers go to Coffee Talk Answers.

Answer from our Guest Expert Kent Capener of Capener Consulting

SBA Loans

The SBA can be a valuable ally to any business seeking capital. Your question of what's required for collateral is one that perplexes many and leads to a major misconception by quite a few. That misconception is that the SBA requires a down payment for a loan. They do not.

So how do we misconceive? Generally, it's because the SBA doesn’t offer interest guarantees for 100% of any loan. (Note: interest guarantees are what the SBA really does – they do not make direct loans.) Some caveats also lead to some SBA misconceptions. For example, while several direct loan programs are in effect in the SBA’s operating procedures, Congress hasn't funded them for many years. With no money appropriated, the programs are just space on the pages they occupy – meaningless. The last funded direct program was for female Vietnam veterans of minority birth. Don’t confuse the farm loan programs that the SBA administers with direct loans. Even though they are direct, the SBA administers, it does not lend the money.

So how does the SBA really help in the fast food environment of small business loans? In reality, it’s the leverage to help your bank make the decision to make the loan.

  • Initiate and foster a solid relationship with an SBA-approved lending bank (This is the most important to-do) .
  • Develop a good relationship with "your" loan officer and let this person know quite clearly that you want him or her to help you with the "loan committee." Yes, the "committee" is involved in almost every type of SBA loan with the possible exception of micro-enterprise loans.
  • Have a clear understanding of what the goals are of everyone involved. Obviously, your goal is to get the money. Well, guess what? The bank's goal is to get your money. In theory, they want to make the loan each and every time. In practice, they only make loans to those they feel will keep their loan principle secure and pay the interest on the loan (their profit).

Entrepreneur Press Start Your Own Restaurant and More (StartUp Series)
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2009-02-28 16:51:36 by Cash_4_Ur_Biz

Need $$$ for your small biz?

Hello,
I am the East Coast Regional Representative for RFG Finance Company. I work with various types of merchants in your local area, such as : Clothing Stores, Liquor Stores, Auto Part Stores, Specialty Retail, Restaurants, Bars, Nail Salons, Spas, Motel Owners, Grocers, Franchisees, etc.
In these difficult economic times, business owners may be experiencing difficulty in obtaining bank loans. Our creative financing has helped thousands of business owners nationwide.
We provide unsecured business cash advances from $2,500 to $250,000 or more to business owners nationwide based on their gross sales/credit card sales volume

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