Friday, December 3, 2010

Small Business Funding and other various mysteries...

The process is just beginning and it's already not what I expected... basically, I thought... write a comprehensive business plan and it was a big part of the funding process. But in reality, no one looks at your business plan. They are focused on your credit history because these are unsecured loans. The first round of loans you go for are from SBA lenders, who get SBA grants and charge low interest rates. Typically you fill out a short one page loan application. I have the loan application but I am waiting to submit it until I can clear a couple of things off my credit report.

I will never go an extended period of time without checking my credit again. I did not realize I was being charge unsecured property taxes on my boat in two cities and was only paying one set. Now I have three liens on my house for not paying boat taxes in Stockton. Well, I paid the taxes last week and the liens will be released soon, but it might prevent me from being able to get an SBA loan. For something so stupid... deep sigh.

Anyway, so far the Small Business Development Center has looked at my Business plan, but no lender asks for it as part of your loan application in the intial stages. I feel like the loans are not really based on anything but your credit and the merit of your business plan is not really relevant to the process... which makes sense really. Banks are really skittish after the past few real estate years. I mean, I know this is all reasonable, but I feel like I wasted two months on a business plan that no one is even going to look at.

And the one page lender form is baffling! It asks me how long I've been in business... well I've been officially catering for 6 months, with a business lisence and fictitious business name and all that. However, I've been catering since I was 19. Also I am not opening a catering business. I am opening a delicatessen. Most of the loans are for expanding a business, not for start ups... so it's been reccomended that I list the current catering business and the money I made this year, and say I am looking for funds to expland. The cost of the rent on this site is so low, it would cost me more to lease most kitchens for catering anyway. It's just... nothing is all that clear cut.

I talked to the fire inspector this week as well. I will be able to use the smoker, but I won't be able to use a deep fryer. I also received my resellers permit this week.

Also I took the Servesafe exam today. It is a requirement have someone that is Servesafe certified in a restaurant like I am planning to open. I took the class three years ago and some of the laws had changed. Thank goodness the nice lady where I took the test sent me some practice exams, they were emmensly helpful. You only need to get 75% and the stuff was familiar enough that I feel pretty good about how I did (knock on wood).

So to date (in order):
Ficticious Business Name
(Pay $75 to advertise the name int he paper for 3 weeks)
Home Occupancy Permit
Business Lisence
($105.00)
Federal Tax ID
State Tax ID
Reseller Permit
Servesafe Certifiction

OH plus I will have done all of the work for my Baking and Pastry Cert and Culinary Arts Cert as of next Thursday (We don't get our actual certificates until next May, I can apply for them at the beginning of the year).

The business plan is about 300 pages long as of now.

No comments:

Post a Comment