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Echo this. We have collateral, revenue, decent profit margins, and significant YOY growth (over 500%) and it's been difficult to get a loan or LOC due to how yo

by rfc 8y ago

Echo this. We have collateral, revenue, decent profit margins, and significant YOY growth (over 500%) and it's been difficult to get a loan or LOC due to how young we are. We finally got one for a small $10k LOC which is funny because our company credit card is many times larger than that. Gotta start somewhere though...

duxup 8y ago
Struggling to get a 10k loan... like just as an individual that should be pretty easy for me to get at the drop of a hat. Odd a business would struggle to get something that small.
- cthalupa 8y ago
  > Odd a business would struggle to get something that small. It being that small is part of the problem. Your potential ROI for a 10k loan with anything resembling a normal rate is pretty small. There's not much money to be made, which means there's little incentive to take risks.
  - duxup 8y ago
    I should have thought of that as a relative founded a small local bank ages ago. They got bigger and he always talks about how they'd bring in a new loan executive dude and he'd be all "Oh man look at these tiny loans, these aren't cost effective." And then they'd have to teach him that those tiny loans are how they grow / maintain their business with the local businesses, and farmers. They're small but doing things efficiently, safely (risk wise), but also quickly is how they gain the locals trust and loyalty. Big banks show up and are all "naw we don't do that" and just don't catch on with the locals. At least in the areas that their branches operate it has been effective for decades, the locals in those areas really like local banks, other places maybe not so much.
- moccachino 8y ago
  A company can go under in two seconds with all the assets gone and the lenders will have to suck it up. An individual has to struggle with bankruptcy laws for a decade or more to get rid of the debt. So if I've got 10k to loan, I'd rather loan it to some poor sucker that I then own, rather than to a business that might disappear tomorrow.
  - duxup 8y ago
    Yeah good point, businesses can effectively evaporate into nothing. People, you can hassle them forever. Kinda sad how that is.
- elliotec 8y ago
  Often when it is that small, business owners will take out a personal loan because it is a lot easier.

by rfc 8y ago

duxup 8y ago

Struggling to get a 10k loan... like just as an individual that should be pretty easy for me to get at the drop of a hat. Odd a business would struggle to get something that small.

cthalupa 8y ago
> Odd a business would struggle to get something that small. It being that small is part of the problem. Your potential ROI for a 10k loan with anything resembling a normal rate is pretty small. There's not much money to be made, which means there's little incentive to take risks.
- duxup 8y ago
  I should have thought of that as a relative founded a small local bank ages ago. They got bigger and he always talks about how they'd bring in a new loan executive dude and he'd be all "Oh man look at these tiny loans, these aren't cost effective." And then they'd have to teach him that those tiny loans are how they grow / maintain their business with the local businesses, and farmers. They're small but doing things efficiently, safely (risk wise), but also quickly is how they gain the locals trust and loyalty. Big banks show up and are all "naw we don't do that" and just don't catch on with the locals. At least in the areas that their branches operate it has been effective for decades, the locals in those areas really like local banks, other places maybe not so much.
moccachino 8y ago
A company can go under in two seconds with all the assets gone and the lenders will have to suck it up. An individual has to struggle with bankruptcy laws for a decade or more to get rid of the debt. So if I've got 10k to loan, I'd rather loan it to some poor sucker that I then own, rather than to a business that might disappear tomorrow.
- duxup 8y ago
  Yeah good point, businesses can effectively evaporate into nothing. People, you can hassle them forever. Kinda sad how that is.
elliotec 8y ago
Often when it is that small, business owners will take out a personal loan because it is a lot easier.