I got a call yesterday from a rep at Tri Counties Bank. He had recently come in the week before and sat down with me regarding our needs. I sent him back with a full set of financials and an outline of our expansion plans. At the time, he seemed very positive on the outlook and indicated he would talk to his underwriting department as soon as possible.
I wasn't surprised when he called yesterday without positive news.
He said that the underwriter reviewed our information and that our expansion wasn't in line with "historical growth needs" but rather based on "accelerated needs" which the bank wasn't comfortable with. He indicated that our new opportunity for expansion was great for our business, but something that otherwise scares a lending institution because of the rapid and dramatic rise in the need for capital.
Rather than being open to $750-$850k in financing, he said the bank couldn't approach anything beyond $250k and that would have to be fully secured with collateral. He indicated even this would be a stretch for them. This was different than what he originally wrote in his email:
"We are often much more flexible than our larger counterparts. When we need outside guarantees we can turn to the SBA 504 program, or California Capital (like an SBA for the state of California)."
When I asked about these guarantees, none were volunteered or offered.
To be fair--he was very nice the entire time and I appreciated him coming to the office and sitting down with us the week prior.
I talked with an associate and she said she didn't think the story would be different with any of the other banks. "In this economy, you almost have to prove you don't need the money to actually get the money..."