Thursday, December 17, 2009

Raising money in 2009: Strike Two--Five Star Bank

This is a follow-up to this article about obtaining financing for expansion:

Raising money in 2009: Are banks lending to small business?

In the ongoing attempts to establish funding, we submitted an application to Five Star Bank...and it was turned down because the personal score for the submitter was not high enough.

That was it. That was the sole reason listed.

Folks--we're going on 8 years old as a company. Our expansion project will take us to three new metro areas and quadruple the size of our company. SBA is covering 90% of the risk on these new loans.

It doesn't matter--its exactly what I have said before: banks are not lending to small businesses. When you have a mature company--not a startup--with a significant growth initiative that can't get funding, the banks are just hoarding cash...

As I mentioned in the last blog post--we have three positions we could hire for immediately, but the funding for the growth project needs to be there first. Banks are squatting on billions in federal dollars and the government has otherwise failed to allocate funding to anything worthwhile, yet they are still pushing forward with "health care reform" and raising the debt limit to an amount so big, we couldn't pay it back for 100 years.

Do you know anyone who got an SBA loan lately?

I don't.


1 comment:

J Simoneau said...

Posted this on Twitter a while back:

Small businesses continue to get screwed by the banks for loans regardless of credibility...

Guess it only helps raise the frustration though. Its just silly out there and the sad part is... people who go bankrupt (not meaning businesses) have an easier time getting loans then people who have average credit these days. Sure their interest is 135% or something but still... they get the green light. Creditors are happier if you don't pay money back then if you have a high credit/dept ratio.