New Business Failures

[Zeppelin795]

Yes, they have you right where they want you.

[Zeppelin795]

You don’t even understand fundamental concepts.

[Zeppelin795]

And number 2. Inadequate cash reserves. If you don’t have enough cash to carry you through the first six months or so before the business starts making money, your prospects for Success are not good. Consider both business and personal living expenses when determining how much cash you will need.

Don’t they have officers at the bank who are in charge of doing an analysis to make sure a start up has the capital to succeed, so that they have a better chance of being paid back?

[pfury]

@Zeppelin795

Don’t they have officers at the bank who are in charge of doing an analysis to make sure a start up has the capital to succeed, so that they have a better chance of being paid back?

Have you ever actually seen the difference between “projected values” and the actual?

They have officers at the bank that’ll do the math, but that doesn’t mean they’re responsible for researching every part of your industry to fact check your totals to the dollar.

[Zeppelin795]

@losthog

And banks were calling me to loan me money. I laughed at them when they called. I simply asked the “wtf were you when I needed your money, now I don’t screw off.” And hung up the phone

Good for you. Fuck those people!

[Zeppelin795]

@dt79

He thinks the financial institutions assume the duty to ensure the business taking the loan has the right amount of funds from the start and should, therefore, share the blame if the business fails.

I never said or implied that the banks should ensure the success of a business but they have a duty to analyze the weak points of the business and if the amount of funding asked for fits a weak point that it should be dealt with.

[Basement_Gainz]

Okay @Zeppelin795 put your critical thinking cap on.

Imagine you are a business loan officer at a bank. Your job description high level:

1. Don’t lose money. I.e. do everything within your power to write good loans that won’t default.

2. Loan as much money as possible (spread across multiple risk pools). It doesn’t earn the bank any interest until it is deployed.

So in your scenario where you have a good company that is in the correct risk pool you would loan them as much money as was within your power to loan. So people who claim their business died due to lack of funding MUST have had some underlying problem in their business that scarred bankers and other sources of funding away.

If Apple came to you and agreed to pay you 8% on your money because they needed to expand their product lines, would you loan it to them?

Now what if Toys-R-Us came to you and asked to borrow money. Would you lend it to them?

[pat]

I heard of this one nail salon that does crime on the side… They are very successful!
Oh, wait that’s just really dumb TV show.

[polo77j]

@Basement_Gainz

So people who claim their business died due to lack of funding MUST have had some underlying problem in their business that scarred bankers and other sources of funding away.

yea, but don’t they have guyz who look at that tho?

[polo77j]

@Basement_Gainz

If Apple came to you and agreed to pay you 8% on your money because they needed to expand their product lines, would you loan it to them?

Yes. I own Apple stock. They’ve been very good to my portfolio. Very, very good.

[iron_yuppie]

My God, what have I gotten myself in to?

[anon50325502]

@Zeppelin795

No you just have to read closer. Maybe that is too difficult for you.

@Zeppelin795

Yes, they have you right where they want you.

@Zeppelin795

You don’t even understand fundamental concepts.

Nothing as usual.

[polo77j]

I’m assuming you’ve never read and/or participated in a Zep thread.

They’re kind of fun b/c you can’t take this clown seriously at all. He’s froot loops man … just have fun and use it as a whetting stone as much as you can sharpen anything against a wet noodle lol

[anon50325502]

Don’t listen to polo Zep is

[dt79]

@dt79

He thinks the financial institutions assume the duty to ensure the business taking the loan has the right amount of funds from the start and should, therefore, share the blame if the business fails.

@Zeppelin795

I never said or implied that the banks should ensure the success of a business but they have a duty to analyze the weak points of the business and if the amount of funding asked for fits a weak point that it should be dealt with.

I choose my words very carefully when dealing with people like you.

@Zeppelin795

The blame can partially be put on the institution as they are the ones lending money and have a stake in the success.

[thehebrewhero]

I think you guys are getting lost in the weeds on this one. Not all banks are the same and not all loans the same. Ive applied for multiple types of loans for biz. In most cases you need Tax history, collateral, a business plan, 25% + down payment… Ive been turned down plenty and a few times got loans or lines of credit. But its not a political thing. You gotta shop different lenders & programs…Capitalism baby

[Zeppelin795]

I like the poster who told the banks to go fuck off as they came around when he really didn’t need the help but essentially ignored him when he did.

[Basement_Gainz]

@Zeppelin795

I like the poster who told the banks to go fuck off as they came around when he really didn’t need the help but essentially ignored him when he did.

Banks don’t exist to help people. They lend money and charge interest to earn a return for:

1. Their depositors
2. Their shareholders

Starbucks doesn’t sell coffee to help people, they are creating value for their consumers in order to make a profit.

Business =/= charity. Have you ever worked? Anywhere?

[anon50325502]

@Basement_Gainz

Have you ever worked? Anywhere?

I hope this was rhetorical.

[Silyak]

If I tie you down and cut out your stomach and intestines with a pocket knife, your cause of death will probably be blood loss. However, a continuous blood transfusion would do little more than make you live a little longer until you die from the gaping hole in your abdomen and general lack of a functioning digestive system.

Some startups may just need a little more blood to survive until the wounds clot and heal, but many of them don’t have a stomach. Banks try to tell the difference, but they aren’t always right.