Small business loan, worth it?

Discussion in 'Business Operations' started by 1 shot, Jan 11, 2003.

  1. 1 shot

    1 shot LawnSite Member
    Posts: 6

    I have been seriously pondering whether or not to try an apply for a small business loan. I have heard that for this type of business that it is relatively easy to receive one. And for someone who can prove that he doesn't have to pay himself out of the business to provide for income, then it is even easier.

    Right know I have another full time job with a very nice company (on paper). My plans are to start my landscaping job full time next season and drop my other career completely. In order to do this I could really use the help of a sbl. I would not drop the career until I had at least 1 month of meshing the two jobs together.

    I am wondering if any of the LCO's out there have taken this route of loan and has it worked.

    $25000 loan amount

    $5200 enclosed 24' trailer
    $10500 (2) gravely 48" walk behind
    $2500 computer setup
    $1500 advertising expense

    I already have a 60" 1999 gravely 260z.
    (2) shindaiwa trimmers
    craftsman handheld blower
    husqvarna backpack blower

    Sbl or maybe a different route. What way got you started off on the right foot.

    I am not going to just sit here I am going to grow larger than anyone knows.
     
  2. bubble boy

    bubble boy LawnSite Bronze Member
    Posts: 1,020

    2 WB and a 60" and only $1500 in advertising?

    how many clients do you have now?

    why so many mowers?
     
  3. rodfather

    rodfather LawnSite Fanatic
    Posts: 9,501

    Instead of a SBL, why not a line of credit? Then you are only paying interest on the amount you have outstanding.

    There is a lot of paperwork with a SBL. They want to see a business plan, marketing/advertising, and so forth.
     
  4. 65hoss

    65hoss LawnSite Fanatic
    Posts: 6,360

    Why not start using your current equipment to its fullest first? Then buy the extra mowers when needed. You should have some cash for them by then.
     
  5. KenH

    KenH LawnSite Bronze Member
    from CT
    Posts: 1,622

    I just went through this also. What I found out was in order to get a line of credit, you have to be an etablished business. I am not sure about a loan for a startup though. You might wish to try a personal loan.

    For what it is worth, I pulled out a line of credit to be used for a new truck.
     
  6. 1 shot

    1 shot LawnSite Member
    Posts: 6

    I do already have a business started. I have about 7 accounts that are grossing me something like 15k a year.
    I am tired of being small. It is time to get off of the porch and run.
    I have one individual who is going to be my other full time employee, very good worker. Another to just go around searching for new jobs and opportunities. And a part time secretary to answer the phone.
    $1500 advertising is only for the initial ads going out to let the customers know we are out there. The market in my area is growing tremendously. 2nd fastest in the state.
    Hoping hard work and the right equipment to take me to 100k gross. Also very fun to work outdoors.

    Tough to get personal line of credit right now, because trying to buy a house and move closer to customers.

    Thank you for the replies. :D
     
  7. KenH

    KenH LawnSite Bronze Member
    from CT
    Posts: 1,622

    Just be careful on the employee front. I have about 55 residentials, and I have a hard time keeping 2 of us busy all season long. If you have 7 accounts, with more coming, 4 employees might take a big crunch out of profits and cause you to financially struggle.
     
  8. bubble boy

    bubble boy LawnSite Bronze Member
    Posts: 1,020

    triple the ad $ to have any hope of getting your name even near out there.

    2 employees for under $100 000 grand...if you want.

    part time secretary...you lost me.
     
  9. noclevername

    noclevername LawnSite Member
    Posts: 52

    I might hold off on the loan 'till you pick up more clients. Use the winter to hustle up more work. Look for a used trailer. Regarding the equipment most of the bigger dealers here have good lease to own or "six cheque" no interest plans that don't kick in until you pick up the equipment (and therefore making money on the new clients you've picked up). If you're already on the internet your computer is fine for now. Get some good letterhead made up and use some business software that is adaptable to your particular type of work. And kiss any spare time that you've had good bye for the next couple of years. lol
     
  10. noclevername

    noclevername LawnSite Member
    Posts: 52

    Oops almost forgot, instead of small business loans, see if you qualify for any type of grant (ie something you don't have to pay back) good luck !
     

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