studio 102

Soapking is correct. I tried the SBA/Score route. Opening a coffee shop has a better chance. One Score rep told me I should forget tanning, and open a carwash..
Most of their advice was non-existant. They pointed me to an in-house library, and told me to go 'read'.
Tax payers money on the move!
Like Golden, I did with my own money. I purchased a salon for sale, built it up/turned it around..now have the clout where banks hold the door open for me when I drive up.
And, it is true SBA does not give loans, they back up a bank. But the bank has to approve a vital plan with solid financials. They could care less abot tanning. They want to see #'s. Is this venture going to return our money, or close within 6 months? They too, see it as seasonal. They will want proof that you have cash, not borrowed, to pay ALL debts over slow season. If you have THAT, open with out a loan.

Sol Tan

SBAis a joke. they ARE there to open startups but they never do. funny, actually thats sad. Uncle sam should shut down the sba and just start handing out wads of cash at the local post office to anyone with a plan. No wonder the economy is crap right now, no one is loaning money to jump start it.

OTM DALLAS

Pain in the rear, if you can do it on your own do it. If you have no experience then buy an existing, one less location for comp. and sometimes you can get the owner to carry part of the note. Heres two bank that have loaned a few tanning salons money South Trust Bank and Wells Fargo.

DWhite6872

This beg. post was from 03/10/04....but yes, sba is harder and will require more down. There are a few lenders who specialize in the tanning industry that can help out new salon owners..

tantootx

Sorry, but I disagree with everyone on SBA. I have gotten 3 SBA loans in 2 years. Two of them were new businesses and the 3rd was for equipment for the second. Maybe it is location specific or I got really lucky or unlucky as the case may be. Did pay 20 to 30 percent down on them all though so that part is rough.

DWhite6872

tell us about the process?

navigatin1

I will try and explain my process with the whole SBA thing. I appologize in advance for spelling and gramer as it is not my strongest points in life!

The SBA will loan you money for a start-up or any other reasonable business but there is a mountain of paperwork that goes with it and when I say you have to have everything in place, you do!

First thing is to try and find out if there is a person/persons in your area that is the "front line" for the banks. Here it was a guy at the local college that worked in the business center. They are the person that helps you put togeather your business plan and will basicly give you the run down if you even come close to being able to qualify for finacing.
It usally does not cost you a penny for there services, and this is the person that kicks the wanna be's to the curb for the banks!

Once you have that in place, stay away from the BIG banks as they are considered "leading lenders" and even though the SBA has there own rules, the big banks have there own too and will usally shoot down a tanning salon and blaim it on the SBA!
The problem with the big banks is they all financed salons during the big tanning boom back in the 80's, and as we all know, alot of them went under and the banks got stuck with a s**t load of tanning equip that they had no use for so that left them very gun shy about tanning salons.

Find a small bank that is growing and start dealing with them. The bank is basicly the "bouncer" for the SBA, if the bank likes what it see's, then you will get the loan!

There is a lot of BS involved with getting an SBA loan so start waaaaaaaaayyyyyyyyyy in advance and don't wait till the last min. Make sure you have everything in place, all old tax records, pay stubs, leagal filings, paperwork, top notch credit, business plan, D/B/A fillings, corp fillings, tax ID#, urine sample, blood sample, first born, ok ok so I threw in the last three for fun, but you get the idea.
Not all of the things I mentioned you will need, it all depends on how you are going to set up your business that dictates what paperwork you will need.

Remember, and I can't stress this enuff, If the bank likes what it see's, you will get the loan!!!!

Good luck and I hope my ramblings have helped!

tantootx

You will need to find a company that does SBA packaging and this is a must. It will keep you from having to go before bank officials to sell yourself They will charge you about $1500 and take all your information which is a somewhat of a time consuming process but well worth it.They will need all financials personal and business, if you already have one. You also need a very good credit score. They will then compile all the information into a package that the banks are familar with and ready to send to the SBA after bank approval. These companies have a network of banks they work with and will start working your deal to the appropriate personnel. Keep in mind your package will need to include a well put together business plan and all projections for your business so get a good accountant to help you. All of ours were Low Doc. loans which means they were under 150K. A Low Doc. SBA loan can be approved from the SBA in 3 days once a bank has approved the deal. We got lucky and the first bank they took it to accepted the deal. Once a bank takes it, it is pretty much a slam dunk for the SBA. They almost never turn it down.

If you are borrowing 150K your part will be anywhere from 20 to 30 percent. 150K X 25% = 37.5K and that is part of the 150k. You will need to break the loan down into 4 or 5 catagories. Buildout, Furniture and Fixtures, Working Capital, Equipment and Closing cost. Plan on using your buildout allowance for working capital which should be somewhere in the neighborhood of what you put into the loan. Side note: Before you close your loan the bank will require life insurance in the amount of the loan to have them as the beneficiary.

SBA loans are much lower interest rates for 7 years. Running about 7% right now. Nice part is that your loan will be interest only for 6 months on only the amount you have drawn from the loan.

Once your first business is up and running and making a profit the bank will usually be more than willing to take on another for you. They usually require 2 years but we got lucky again and did another at 1 1/2 years.

After a disastous loss to our builder we actually went back for a 3rd loan which paid for all of our equipment and additional working capital.

Not sure how the Capital Solution firms work, whether it is local, regional or nation wide. The name of the firm we worked with was Growth Capital Solutions in Texas. Should anyone have additional questions feel free to PM.

Steve Underhill

The SBA will finance a start-up business; in fact SBA is an organization that insures loans given by preferred lenders. The process is to find all of the preferred SBA lenders in your area. Call all of these lenders and tell them about your project and ask them if they are interested in speaking to you. Some will say no, others will say yes. You will need a comprehensive Business Plan that consist of much more than spread sheets. With this business plan the lender must see that you know exactly how you will run your business and exactly you will produce your income and means to repay the dept. You should have a complete Tanning Center Guide, Employee Training Manual, point of sale marketing material, income projections supported by a proven marketing material. If you have little business experience particularly in this industry it is of great help to have a consultant in your corner that does have the experience. With this you must be a home owner, they like to see other forms of income and you must have 25% to 30% liquid assets to invest. If you are under funded it will not happen. Half of the salons I open are SBA financed.

Gene

Just curious. Even if you go with SBA, do or don't banks require the whole amount financed to be back by collateral; example your own home or real estate equity?