Wednesday, April 27, 2011

Met with a banker today... after a Startup Business Class with SCORE

    First of all I want to say that "Business Plan Week" looks more and more like "Business Plan Month" just to start with. It is more overwhelming than I though and just dealing with all the startup questions is too much for a newbie like me let alone the technical details.
   That is why I registered for a class with my local SCORE office here in Sacramento and took a 3 hour class called "Simple Steps Startup Basics (Pre-Business Orientation)" which was very basic and easy to understand. All the info can be found on your own on the SCORE website reading the tutorials, which I did and I was familiar with most of the stuff spoken of in the class but the good part was that you could ask questions. That was the best part actually because the class was held by two volunteers who used to be one a former CEO for a financial firm and the other VP of sales for different corporations. Impressive, I know. Believe me when I tell you that they knew what they were talking about and I left a little wiser. Now I have to make an appointment with a mentor to talk to him about my idea and be rest assured that I will log everything that he will have to say.
    After this I had to deposit my paycheck from work and went to the bank and talked to my banker (currently I have an account with CHASE - it is relevant i believe because I learned that not all banks are the same) and asked him about a bank loan for my business - I didn't have a business plan with me or anything else for that matter, just asked if it is possible. After asking me some questions about my business, like what will I do, how much do I plan to invest out of my own money, what business structure will it be ( very important as you will see) and when do I think I will start actually selling something ( I said 3 or 4 months - that is without a loan, just me saving money for assets). After all this he said is pretty tough to get an SBA loan, for which by the way you don't need a collateral - I asked him that specifically, and the interest rate for the last loan he approved for a startup was at a 13% interest rate. which in my case won't make much sense because two credit cards I have are at 14% APR so we came to the conclusion that is better to use the credit cards in case of emergency. 
   Overall my meeting with the CHASE banker (business accounts specialist) left me pretty impressed with the service and he actually took the time to go through all that with me and answer my questions. He advised me to open a sole proprietorship business account for now, hearing my concerns that I will need an LLC to protect my personal assets but I do not want yet to spend the $800 minimum tax that is required here in California (payable within 90 days of filing incorporation request with the Secretary of State). So he will open another one when I file for LLC and transfer all balance to that account. Not bad for a big bank paper pusher. I am hooked, oh  and all this knowing that right now I have a little less than $100 dollars to invest in my business....  Now I can confidently say that I have a banker. 
    Just have to find the right people with the right attitude  I guess. 

1 comment:

  1. How do they achieve the best business startup when they are starting a business? I want to learn about it.