I'm Doubling My Money Every 2 Months - How Do I Get A Business Loan?

I have access to the resources you need if you can provide details
and verification of current results. Your chances with a bank are close
to zero. They aren't into loaning money on speculative ventures unless
you have more than 100% in unencumbered assets to pledge as security
for the loan.

I'll be happy to sign whatever non-compete, non-disclosure docs you like.

I have no interest in developing another business... I"ll give you a straight
up yes or no answer once I've seen the proof. Feel free to IM me if you want
to pursue this.

Getting a business loan can be very challenging even when the possible lenders DO understand the business. You would also need a longer track record. Your "expected profit" may seem totally unrealistic to the number crunchers. You might do better seeking a business partner that shares your optimism and wants to be a part of it with funds and to work at helping. You could post an ad in the JV section here but be cautious of course.

I would highly recommend letting Tsnyder take a look. He has a good rep here and would tell you honestly if he wanted to help with some funding.

The problem is that as businesses grow, the profit margin tends to reduce because expenses also grow. So you'd find it hard to get a bank to loan you money based on what you've written above. They know how business works and that scaling a business is not just as simple and clear cut as you think.

Conventional banks aren't your only option. Sure, if they're interested and willing to work with you then go for it. If not, there are dozens of financing alternatives starting with angel investors all the way to crowdfunding.

First thing you need is a detailed business plan explaining what you do, why it's in demand, who your customers are, how much you're making, how much you expect your business to grow, and a lot of other little picky details. If you're up for it, pick up a good book on writing business plans. Not so much so you can write your own, but to be aware of what the professional business plan writer you'll be hiring will be asking of you. Good luck.

I'm a commercial underwriter and business analyst by trade. Tsnyder and Claude are correct.

Your biggest issue isn't necessarily being a start-up. Banks will mitigate start-up risk with SBA guarantees. Your biggest issue is collateral. Unless you have an unencumbered house or other large assets to leverage, you have issues.

If I were underwriting your project, I would ask for, at a minimum: business plan including a thorough explanation of your business and projections (monthly for the first 24 months and annually for the following three years) and current financials. You should be able to show a minimum debt service coverage ratio of 1.15x ($1.15in cash flow for every $1 of annual debt payment).

However, before I'd even consider reviewing the items above, you'd need to provide proof of collateral.

Just wanted to thank everyone for their thoughtful responses. I've responded to people below. I posted similar questions in other forums, and its very obvious the difference in peoples limiting beliefs about money here. The other forums instantly thought I had a pyramid scheme, or thought I was trolling. The Warrior people just go straight to the juice. Love it.

Tsnyder

Thanks for your kind offer, I'd be open to discussing with you, I'll send you a message.

Janice

Thanks for your advice, it seems seeking a business partner with capital and skills might be the best option.

WillR

Yes I too expect the profit margins to drop, but not too drastically, a couple high quality hires will go along way and there is still a lot of room to optimize.

Travlinguy

Thanks for your advice, I've been realizing this as well. I'll have to slowly start working on this I suppose, the business is taking all my hours as is, but it makes sense. I wouldn't loan anyone money without a solid understanding.

Claude

Yah seems to be the common opinion, my bank however has already lent me about 25k in biz cc and credit lines (i've used half of it). Is a loan that much different than their credit line process? And I guess more importantly, does it hurt to give it a shot? I know I get a credit hit for the lookup and process, is there any other potential loss?

Dan Riffle

Wow awesome to hear from you, I do have about 40k cash, 17k debt. So I have some cash that i suppose could be collateral, but I'm pretty sure thats not the same. I guess this is another reason I should have bought instead of rented a place. Are there any other typical collaterals than house or car? Like ability to sign over future ROTH ira value or something?

So don't even bother applying for any loans anywhere, until I have some type of collateral? What about the business assets? As its making money the websites will surely be worth something, but not as tangible as a house.

Yukon

Really love your quote from Warren. Because honestly, I've never felt more sure this is the time I should push all the chips in. I've already sold all my stock, bikes, everything I own. I only wish I had been more frugal up until this point.

Frankly, and sorry to be blunt, but you sound hooked on a dream. Exciting - to you - profit projections while talking about still having to hire quality people. (More on hiring quality people a bit later.)

I too say grow slower. When I was 30, I was very excited about my then business earning
1.2 million per year with very little overhead. Did not happen.

A friend of mine, at age 56, also got hooked on a dream with his invention (it was a real thing, too)
and dreamed of a approaching a billion in revenue from all it's possible applications. It too did not happen, and he owes a couple of hundred thousand to people. Some was a $30,000 private loan from a sister, other money was from documented private investors.

I bring this up because you sound like you might go the private investor route and want to caution you about going this route. When I say documented private investors, I mean people who are on the corporate paperwork and SEC filings as investors. It takes surprisingly little investment funding to need to have SEC compliance and they have all sorts of categories of investors that you need to pay attention to. Probably to protect the people who somehow have money, but don't really understand investing in a business.

Another caution I have about the private investor route, is that investors tend to want to have a say
or direct interference in the business. An attorney who almost invested in my friend's business
suddenly, after a preliminary agreement was reached, began to talk about installing her person as
a paid officer of the company. (VP or President - I don't recall.)

My friend also tried to hire quality people with start up experience. He got a few who looked good on paper, but did not really have the needed industry experience. Their "start up experience" was with a company after it had received it's first or second round of venture capital finance. So, they really did not know how to be effective and fund and market with no budget and with a truly brand new company.

Anyway, he ended up owing a lot of money and having too many people to split the pie with even if there ever was a pie to be split. He had a board of directors, employees/subcontractors, and investors.

One application of his invention was superior to what the military currently used and the US was heavily involved in Iraq and Afghanistan at the time. There was truly a need for this application of his invention. Even so, he learned the hard way that the military is very slow to adapt to new technology and there is a lot of red tape and a lot of corrupt people in the way of getting to who you need to get to.

Anyway, grow slower. When the time comes, I think it is after a minimum of a one year track record,
you can look into SBA backed lending. Your bank should be able to guide you properly, even if they are not an SBA lender. Also, even amongst SBA lenders, there are differences between banks so it may take a few applications to find the right bank.

Meanwhile, you can also find a lot of free and low cost help from your county Economic Development Agencies.

The best way is to try and do it from your own revenues though. Less debt (overhead) and more control of your own business.

Dan

2 months? 10 years? WOW! OK $1028 seed money(2 months minimum wage)

Year 1=32,896
Year 2=2105344
Year 3=134,742,016

OK, why haven't we heard about you? I mean sam walton and the other equivalents are dead.

NO BANKER worth their salt would give you a loan on your claims. They CERTAINLY wouldn't on your desire. And things RARELY scale as you indicate. It is a LOT easier to double $5 than it is $5 MILLION.

Steve

Seasoned -- the reason for my rush, as it seems you missed, was that I believe there is a window on the opportunity. My guess is 6 months, hence my desire not to wait. If I believed it would last 3 years, I would be taking a slow route. However your point is well taken. I never believed that this would be my ultimate opportunity, more that I have sat on opportunities on the past and lost because of a tendency to be over cautious, and want to make sure I'm pushing hard on this one that is atleast showing proof and potential for scale. Also I wasn't expecting anyone to give me loan on claims, but more based on looking at my numbers, and seeing how easily it could at the least be turned up 5-10x from where I'm at now. You are right, that It would present a whole new set of problems if I was trying to feed 5 million dollars into it.

however that said, I appreciate everyones advice. It does help to caution me and step back to look at my situation from different eyes.

I appreciate everyones sage wisdom, I may not do exactly as you say, but I will certainly think hard about what your saying.

Maybe I'm being oversimplistic, but if you have $40k cash, and this thing doubles money every two months, just invest your money and you'll have $2.5 million in a year. Am I missing something?

I know i'm bringing back a old thread. But I'm doing it to update everyone, in hopes that if someone else reads this thread in a search, they might have more hope than the thread seemed to get from other people.

I dont know why my situation was different, but everyone seemed to think it would be impossible to get a loan. I ended up just trying 2 banks, for the heck of it, and one of them approved me within 2 days. So my advice to anyone in a similar situation, is just to maintain hope but be reasonable. I would say put in 20% of the effort that might get you 80% of the money you need, try a couple things, and it might just be easier than you think.

Being a former investment analyst/number cruncher, I'm puzzled as to why an entity that is doubling it's money constantly needs a loan. In due course, given the nature of mathematics, you'll surely be rich as Croesus in next to no time.

(Based on the fact that if you double the value of 1 cent every day for 30 days you'll end up with $5,368.709)

Interesting that you never answered my question.

So now that it's over a year later, how are you enjoying your millions? Feel free to take that in a positive vein if you've actually succeeded... frankly, I'm curious.

I visit this thread every two years.

See you in 2018...

Hi Kurt.

I'm more interested in finding out how revenue and profit projections played out.