| nordlead said: heh, I took a class on entrepreneurship, but I don't really know all that much. Sounds like you did the right thing to me. Did you meet with people in person or are you just doing this via phone/e-mail. In person you might be able to excite the lender a little more and convince him to give you money. It sounds like you are off on how long it would take to buy the place (based on information provided in your post). You are looking to borrow 400k, with 150-200k profit per year. You are talking probably 3-4 years or more depending on interest rate, unforeseen investments needed, and if you are including your own salary. Of course, I'm making some assumptions as I don't really know to much about small business loans. Also, I'm not sure if the LAN business would fly with investors, of course you need to feel this out for yourself. If you find people are turning you down, ask why. You could drop the LAN from your business plan and you may be able to get an initial investment for the store, and then get another loan later for the extended business. Investments are probably down due to the recession, but you should still be able to get money if you can convince them you'll be able to pay them back. |
Ok yes, it could be around 3-4 years. That would be if I paid myself to work here, which I didn't intend to do, and there are no other investments that I would need for the business. The figure I used was 7% APR. Last year we did 170k (223k revenue) straight up profit. Including everything.
However, I know that I can expand by several ways. Previously the business was doing 250k+ (before costs)when the owner was here and organizing things like school involvement and party planning.
I actually don't plan to run the lan here for profit and I don't want to have it in the business plan either. I want to do that for myself, but it could easily bring in 4-5 thousand a year if done correctly.
Thanks for your advice. Maybe the most important thing is convincing them I could pay the loan back? Or do banks nowadays hope that I can only pay back 90% of the loan, so that they can take the business as well? 
Hmmm talking to them in person could really help improve my chances.
