| There's one fundamental rule of bank financing: don't try to turn your banker into a venture capitalist.
For anything but small loans (or lines of credit to well-established businesses with a track record of success), the bank is going to want collateral. Sometimes that means your house if you can re-mortgage it (although I don't recommend this approach).
However, a bank will usually be quite willing to loan you money for the purchase of assets for your business so long as those assets have a good resale value and your business plan shows a record of success and reasonable future projections.
Don't try to BS your banker. Keep your business plan short, concise, and fact-based. You have to speak their language: your projections should be conservative (even if you think this thing will totally blow through the roof), but good enough to show that you'll have no problem servicing the interest and paying off the principal.
Banks don't like businesses that they deem to be "flaky". You won't get bank financing for an internet business. Same for almost anything to do with the restaurant industry (franchises are an exception).
Anyway, I'm getting off track here :-) The most important thing to focus on here is whether or not the bank is your best source of funds. There are lots of alternatives: mezzanine financing, angel investors, and the FFF (friends, family, and fools! :-D)
Best of luck to you! |
