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"Hey guys , I had to type up a estimated expense and revenues report for my bank." As meaning that you were in the process of putting your pro forma together. Banks are lending now without a lease agreement or at least a promise-to-lease in hand? My how things have changed. |
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My bank didnt want an lease agreement or anything when i bought my truck. |
Ya, wasn't that hard to get approval . But I had to go threw interview on phone with my currently bank, he asked me about my business, liabilities, current income, expected income and expenses, and if my engine were to blow, what would I do and how would I be able to pay for it.
I thought it was awesome that the bank took the time for me to explain my situation, we actually were on phone for about an hour. The only stipulation was for me to be a limited liability corp. and one yr warranty was to be added to loan along with 9,500 down on tractor and payments of 1443.00 month on 06' pete 387 c15/475 |
When I started, they wanted to see a lease agreement in order to qualify for tier 1 terms. That was with sterling credit, putting $40,000 down on a factory ordered truck, and plenty in reserve. Of course, I was a start up. But without a lease agreement or promise to lease, what good are your numbers? You're presenting them with pro forma revenue numbers that are dependent on the situation you end up in. I'm not on your case, you've obviously done your homework. Just a little amazed sometimes at how banks conduct their business. Obviously you have some other assets and income that they feel insulate them from risk, but why ask for the projections then?
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You don't need to be an LLC or corporation to secure business credit. Simply establishing an EIN is enough to allow a sole proprietor to build credit separate from his personal. While you can't separate yourself legally from the obligation with this form, as soon as you sign a personal guarantee you eschew any protection you might have had with an LLC or corporation anyway. And banks rarely lend to new entities without that guarantee in place. I've never done business as a sole proprietor and I've dealt with banks in various capacities when it comes to business lending. Obviously, they are satisfied with their level of risk in this case; probably due to other assets/income available. But I'm still surprised they don't require more in the way of revenue assurance. Then again, given what we've just gone through; much of banks' behavior is puzzling. |
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