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As many of you know I'm just starting my own business. Here's the updates, they may help other aspiring new owners:
The Sprinter: I planned for the future. The truck was built with options I might need later, such as heavy duty cooling, hardboard interior, security system, hard partition, interior lighting, towing package, and HD suspension. Overall cost is $48,000 built the way I wanted it. When you order a custom truck you also get your own color choice, not the basic white everyone else has. I have chosen black onyx metallic, no badging, and any other badging/chrome piece will be removed, painted as the truck, and reinstalled. Awesome financing was obtained directly through Mercedes-Benz/AmEx at 2.9% for 72 months. This is better than any bank ever offered. I only required a $500 deposit for the build to be started. Your build may take 9-12 weeks to arrive - it's built in Germany, disassembled, shipped to you, then rebuilt and delivered.
Loans: Don't fall for the SBA route of financing. It's all good on the SBA website, in bank commercials, and from your SBA consultant. In reality the government only backs 85% of the loan and the bank is free to make more stringent lending rules. Here's one I ran into - 'you need to be in business for 6 months and have proof of $150,000 in gross receipts.' Another bank said, 'get outside financing for the truck and we can give you the rest.' They then said 'no' because 'too many businesses fail'. Another one said, 'sure, we can give you the $35K you need. At 16.99%' I mean, really? With a combined FairIsaac credit score of 780? Really?! Moral of the story: pay off what you can before you apply. Banks say they are willing lenders, but they want your debt to income ratio at 45% or less. (Who has that?) They might be willing to lend if you have own a house. They will not generally take hard assets or land in lieu of a house (what if you have no equity?). SBA loan rate is about 6.36% right now.
Retirement packages: It sounds bad, but consider cashing in or taking a loan against your retirement. If you are technically unemployed (by definition, I am, based upon the business and finance plans) the rate of penalty for retirement cashing in is a lot less. You may even get the Federal tax returned later. If you have an immediate proof of financial failure - loss of house, back rent, back utilities, etc. - there may even be NO penalties. Consult your CPA.
Other financial: If possible, get financing from lenders who don't show up on your credit history - family members, private financiers, gifts from grandma, etc. Also, if you have a spouse who has an outside job - structure the loan payment so that, in the event of business failure, the loan amounts can be paid entirely by that spouse's income. Privately owned banks or credit unions may offer a more personalized solution.
Suppliers: If you want to have a credit account with your supplier that's great. Remember though, they will do a credit check. Multiple hits on your history can hurt you with banks. Try to set up cash/COD accounts until your major financials are done. Then go back and have them run your history for charge accounts.
The overall theme from official lenders is they want you to have (lots) of money before they will give you a little money. It's depressing, yes, as they all say, to your face, 'you will fail'. Keep remembering, they are all desk donkeys and know nothing about anything outside of reading what their computer tells them to say. They are basically talking heads. They will say stupid things, and I encourage you to call them out on it. (I have $97,000 tied up in paid-for assets and $3000 cash in bank for this business. The bank said we require 15% owner equity in the loan. I need $35,000. Looks like I have way more than needed, right? Not according to them - see above - no house, no other cash, land doesn't count...) They will stutter, burp, fart and then say you will probably fail, it's a high risk business, etc etc. Then they will just say 'no'. Their math and lack of smarts, coupled with being tied to the computer, apparently overrides their common sense - how can anyone with such a huge amount of assets (paid for without outside financing, ie hard work!) fail on a $35,000 loan? You will still get a 'no' but it makes you feel good to make them look retarded. It's small consolation.
With hard work you WON'T FAIL!!
The Sprinter: I planned for the future. The truck was built with options I might need later, such as heavy duty cooling, hardboard interior, security system, hard partition, interior lighting, towing package, and HD suspension. Overall cost is $48,000 built the way I wanted it. When you order a custom truck you also get your own color choice, not the basic white everyone else has. I have chosen black onyx metallic, no badging, and any other badging/chrome piece will be removed, painted as the truck, and reinstalled. Awesome financing was obtained directly through Mercedes-Benz/AmEx at 2.9% for 72 months. This is better than any bank ever offered. I only required a $500 deposit for the build to be started. Your build may take 9-12 weeks to arrive - it's built in Germany, disassembled, shipped to you, then rebuilt and delivered.
Loans: Don't fall for the SBA route of financing. It's all good on the SBA website, in bank commercials, and from your SBA consultant. In reality the government only backs 85% of the loan and the bank is free to make more stringent lending rules. Here's one I ran into - 'you need to be in business for 6 months and have proof of $150,000 in gross receipts.' Another bank said, 'get outside financing for the truck and we can give you the rest.' They then said 'no' because 'too many businesses fail'. Another one said, 'sure, we can give you the $35K you need. At 16.99%' I mean, really? With a combined FairIsaac credit score of 780? Really?! Moral of the story: pay off what you can before you apply. Banks say they are willing lenders, but they want your debt to income ratio at 45% or less. (Who has that?) They might be willing to lend if you have own a house. They will not generally take hard assets or land in lieu of a house (what if you have no equity?). SBA loan rate is about 6.36% right now.
Retirement packages: It sounds bad, but consider cashing in or taking a loan against your retirement. If you are technically unemployed (by definition, I am, based upon the business and finance plans) the rate of penalty for retirement cashing in is a lot less. You may even get the Federal tax returned later. If you have an immediate proof of financial failure - loss of house, back rent, back utilities, etc. - there may even be NO penalties. Consult your CPA.
Other financial: If possible, get financing from lenders who don't show up on your credit history - family members, private financiers, gifts from grandma, etc. Also, if you have a spouse who has an outside job - structure the loan payment so that, in the event of business failure, the loan amounts can be paid entirely by that spouse's income. Privately owned banks or credit unions may offer a more personalized solution.
Suppliers: If you want to have a credit account with your supplier that's great. Remember though, they will do a credit check. Multiple hits on your history can hurt you with banks. Try to set up cash/COD accounts until your major financials are done. Then go back and have them run your history for charge accounts.
The overall theme from official lenders is they want you to have (lots) of money before they will give you a little money. It's depressing, yes, as they all say, to your face, 'you will fail'. Keep remembering, they are all desk donkeys and know nothing about anything outside of reading what their computer tells them to say. They are basically talking heads. They will say stupid things, and I encourage you to call them out on it. (I have $97,000 tied up in paid-for assets and $3000 cash in bank for this business. The bank said we require 15% owner equity in the loan. I need $35,000. Looks like I have way more than needed, right? Not according to them - see above - no house, no other cash, land doesn't count...) They will stutter, burp, fart and then say you will probably fail, it's a high risk business, etc etc. Then they will just say 'no'. Their math and lack of smarts, coupled with being tied to the computer, apparently overrides their common sense - how can anyone with such a huge amount of assets (paid for without outside financing, ie hard work!) fail on a $35,000 loan? You will still get a 'no' but it makes you feel good to make them look retarded. It's small consolation.
With hard work you WON'T FAIL!!
They are the nicest looking on the road, but god are they hard to keep clean
The bank always takes my money and is always calling me from their investment dept. 
its been 19 years 11 months since I bought. So in 1 month I'm free and clear
. With that being said, the loan person still wanted to see a 2 year rental agreement before my paid off home is considered an asset and not a liability
they claim I still have insurance and taxes that make it a liability. So basically, i'll shop for a loan eleswhere.and in reality all I was looking for was what I can prequalify for.
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