As the title states, did you go through the small business administration to get a loan for your start up?

If so, how was the experience?

Did they beat you to death with paperwork and questions or did they just review your business plan, funding request, history and interview you?

I'm asking for a small amount in relative terms, 50k total, 30k in equipment, 20k to cover payroll until our first payments come in.

50k on a 49.6% gross margin business, with the owner having 15 years as a consultant in the field seems like a pretty straight forward ordeal.... no?

Any advice?

I've heard others had good luck. They beat me to death with paperwork. It was going to be a 6 month or year process. I tried twice and gave up within a month both times.

49.6% gross margin being straightfoward to get funds? Who knows. In some businesses 50% margin would end in bankruptcy, in others it would end in world domination.

Stating a gross margin without knowing a lot of other details is like saying "on sale, 25% off" but not stating the initial price. It actually means nothing.

I tried many years ago for a similar amount of $$ and the process isn't quick or easy. I also tried some banks and I got nowhere. I ended up financing what I could via a personal loan and sold some of my toys to free up some cash which still wasn't enough but I made it work.

What type of equipment?
From my experience financing equipment is pretty easy as long as you have decent credit and are buying new. I recently financed a $110k piece of equipment and all they wanted was last two months bank statements and the first two payments up front.

Worked for a county SBA as an intern for two years analyzing loan applications.

First of all every SBA has a different set of priorities. I can only speak to mine. My county works with banks to issue a bond sale with a cap set at X amount. These sales raise the money to loan to the various businesses looking for a loan. The applicants are reviewed and weak ones are weeded out.

Among the remainders they are prioritized. The county then adds up all the loans from top to bottom and draws the line when they hit the bond cap. If there are 12 viable candidates asking $100k each but the bond sale is capped at $1m then two companies will get dropped. You need to make sure you are included inside the bond cap. So the question is how do you get better placement on the priority list?

Remember that the SBA is not about how much your company can earn. They're really not interested in making owners rich. It's about how much you can assist the local community. Of course a successful business plan is required but that alone is not enough.

When filling out your application be sure to emphasize how much you think you will spend with local vendors and how many additional local employees you will hire. That is the type of information that will push your application to the top. A sole proprietor with an application earning 50% return on investment using vendors around the world will not do as well as a company hiring 3 local employees while buying from a local supplier but only making 35%.

They are also much more interest in high skilled/high tech manufacturing and headquarter operations than say a small retail shop. If your business requires any equipment make sure it's new from a local source and not used. If your business requires any manufacturing make sure it's contracted within your community borders. If your business has multiple locations you should plan on relocating your HQ (if it's currently outside the county) into the county.

Part of the wait time is the interval between bond sales. They only float bonds so many times a year. The county is not sitting on a bunch of cash ready to cut a check. All the viable applications are assembled into a portfolio tied to a specific bond sale so that the interest rates can be determined.

I think you get the picture how you need to frame your application.

Thanks to all three of you for responding. Each post helped and has brought up questions that I'd previously neglected.

I now know how I need to frame it, but it's going to be tough to frame it as a community wide gain. The bulk of the loan is for a single piece of equipment that runs just shy of 20k and is only made by one gentleman who lives near Houston. (Infrared Total Gas Detector and chromatography).

I'll be able to help the local welding shops, hardware store and possibly a machinist, but my Arfcom member machinist is doing a damn fine job for me. Overall my spending on consumables is less than a few hundred per month.

I'll have to be crafty about framing that.

Perhaps I can source the liability insurance in the county, etc.

I would still speak on the equipment being in-state Texas. Also sounds like you have at least one employee besides yourself.

Remember, this was only for my local SBA. Other ones might be different or offer different options. SBAs can be creative