View Full Version : Getting a Loan to Start a Business
01-16-2009, 01:51 PM
Does anyone know if a Bachelor's Degree in Entrepreneurship would be of any significance when approaching a bank in hopes of getting a loan to start up a business.
I have heard that it mostly depends on your business plan, financial statement, and credit score.
Anyone an expertise in this area? Thanks.
MIGHTY MANFRED THE WONDER
01-16-2009, 02:01 PM
Better to rub the ZMAN lamp....
If you have money, they will loan you money... If you don't, that's what pawnshops are for.
01-16-2009, 02:08 PM
you will probably need to find people other than a bank to help you out with getting the necessary funds. Banks will definitely need to see what looks like a good idea, because above all else they want their money back. If one could find a couple other people to loan you some money in order to at least get some sort of start before going off to the big fish.
01-16-2009, 06:37 PM
I had not heard of an Entrepreneurship Degree, so I searched it, and it appears to be something given by a few community colleges and online universities. Anything you can learn will help you later, but I don’t know how much something like that will matter when it comes to getting a small business loan. A diploma from a 4-year school would mean more, especially if you have a business-related degree.
I don’t work at a bank, and I’ve never had to pitch for a loan (just a line of credit based on a financial statement), so I’m not sure what it takes to open the vault. Maybe if you have a friend at a bank you could ask them. I think it does depend a lot on your business plan and whether there will be anything like inventory or property that can be used as collateral to make the loan less risky for the bank. Debt is cheaper than equity (for you), but if you’re having a hard time raising capital, you could always try to find someone with cash and give them an equity (ownership) position.
Banks these days are very tight with credit and pretty paranoid about taking on risk. It’s an awful time to get a loan, but recessions are a good time to start a business because people are looking for new vendors, new options, new ways to save money, etc. They lose faith in their existing business relationships and they look around.
Maybe if you give me some more specifics I can help with some better advice. Basically, try to get as much education as you can. After that, try to find a mentor—someone older who can teach you a trade and the specifics required to run a particular business. In school you learn fundamental concepts and you learn how to think, but most industries require specific on the job training. I don’t know how old you are, but it might be a good idea to gain some experience in an industry before you try to start a business in that industry. Do you have existing customer relationships? Skills or experience?
Good luck—I think you’ve got a great goal. Nobody works as hard as a small business owner, but the rewards and the satisfaction are amazing. You’ll never get the same freedom or control working for someone else. You also won’t take on the same risk, but that’s what it’s all about—risk and reward. Good luck and keep us posted.
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