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I have noticed that about the sba. The worst part is according to the sba they gaurantee 85% of a loan that the bank gives you based upon the fact that the bank won't lend you the money in the typical fashion.
So here is the dilema, You have 85% of a loan gauranteed by the gov't with our tax dollars and the bank knows this. Yet, the still require you to have enough cash/collateral on hand to cover the loan in case you default.
The last bank told me that I shouldn't have got a second on my house for capital for my business because they wanted it for themselves. They didn't care that I had already put my house on the line and that I had money in the bank. They wouldn't even consider the inventory (which was 80% of the loan) as collateral.
Some othe banks such as BofA seem more promising, they require 10-30% cash injection and will use the inventory and business equipment for collateral.
I still don't get it though. Maybe I'm just a dumb engineer. But if the gov't gaurantees your loan for 85% of the proceeds, then the bank stands to lose only 15% of what they borrow because the gov't with tax money is paying the creditor for your default. I can see wanting collateral for the 15%, but not the full 100%.
Also, even though your supposed to be turned down by the bank and then the sba can gauarantee the loan. You still have to pass muster under the same criteria as though you weren't getting a loan gaurantee. What a bunch of hypocrites. I'll bet if I was a better match for their eoe programs and shit I would have no problem.
Another rant from a pissed of Marine.
So here is the dilema, You have 85% of a loan gauranteed by the gov't with our tax dollars and the bank knows this. Yet, the still require you to have enough cash/collateral on hand to cover the loan in case you default.
The last bank told me that I shouldn't have got a second on my house for capital for my business because they wanted it for themselves. They didn't care that I had already put my house on the line and that I had money in the bank. They wouldn't even consider the inventory (which was 80% of the loan) as collateral.
Some othe banks such as BofA seem more promising, they require 10-30% cash injection and will use the inventory and business equipment for collateral.
I still don't get it though. Maybe I'm just a dumb engineer. But if the gov't gaurantees your loan for 85% of the proceeds, then the bank stands to lose only 15% of what they borrow because the gov't with tax money is paying the creditor for your default. I can see wanting collateral for the 15%, but not the full 100%.
Also, even though your supposed to be turned down by the bank and then the sba can gauarantee the loan. You still have to pass muster under the same criteria as though you weren't getting a loan gaurantee. What a bunch of hypocrites. I'll bet if I was a better match for their eoe programs and shit I would have no problem.
Another rant from a pissed of Marine.
however, the best interests rates I have seen since then....are thru the MOB......at least they only give you new cement shoes one size fits all 
