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How hard is it to get a small bank loan?

I am wanting to start up a homeday care, but at the same time we are moving- and having a new baby in May. With everything going so crazy - we would need a little extra. I could pay it off as soon as my daycare starts kicking in money. How hard would it be to get a small loan?

I have friends that got a bank loan for school, and their books- but they can't even pay that back as fast as I think I could. At least I would have a "Business" income to pay back with in a few months. I have never had a loan, so if you ever had one please inform me of what exactly I would be in for? Both my husband, and myself do have jobs, which i'm sure we need that information to qulify for a loan. Thanks!


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Anonymous

Asked by Anonymous at 6:24 PM on Jan. 17, 2010 in Money & Work

Answers (7)
  • For Small Business Loans you'd have to call a lender and see what the eligibility requirements are. Normally you have to show them your Business Plan. You can get help creating one through a class given usually through the Better Business Bureau or the Community Development Center.
    admckenzie

    Answer by admckenzie at 6:27 PM on Jan. 17, 2010

  • Just be cautioned - in today's economy it is VERY difficult to get a small business loan. Your credit has to be impeccable. I commend you for wanting to make a difference tho!!
    RutterMama

    Answer by RutterMama at 8:08 PM on Jan. 17, 2010

  • Right now, it's hard! My mother was just turned down for a $5000 personal loan. She has a 740 credit score (800 is perfect), earns well enough to pay it back and had a co-signer just in case... The banks aren't lending to ANYONE!
    SabrinaMBowen

    Answer by SabrinaMBowen at 9:31 PM on Jan. 17, 2010

  • It would probably be easier to get a personal loan than a business loan.
    HOWEVER I would not bank on what is not there yet. You don't know if your pregnancy will turn out fine, or if your baby will need tons of medical help, or if you'll have really bad PPD that makes it impossible for you to work a day care from home.

    Also when you're writing a business plan and thinking about how much you'll make you consistently fail to see worse case scenario. And that is why a loan is too risky in my opinion.

    I'd recommend getting on a written budget and cutting your expenses. You'd be surprised how much money you can save just by sticking to a budget.

    GOOD LUCK :)
    Anonymous

    Answer by Anonymous at 9:51 PM on Jan. 17, 2010

  • (Op here) Well thats just it, we are in survival mode right now. Thats one of the reasons why i'm wanting to do this, to change what we are doing. Something has to change, and I have been wanting to do this for awhile now. Also I would rather take a chance of it failing, rather than not trying at all. I was wanting a personal loan for or under $2000, just didn't know if that was possible.
    Anonymous

    Answer by Anonymous at 10:11 AM on Jan. 18, 2010

  • So what are your plans if it doesn't work out? How will you repay the loan?
    Anonymous

    Answer by Anonymous at 12:05 PM on Jan. 18, 2010

  • sometimes a loan isn't the answer it just adds to your debt can you really afford to pay the payment until the daycare business takes off enough? what happens if it don't work out?? Most ppl would rather depend on friends and family to watch their kids for free or a small amount than take their kids to a daycare or they rely on their oldest child. People just don't have the kind of money they used to ya I support you for wanting to try but I'll give you an example my friend got licensed and all and it started up as a success but then she also lost alot of kids due to the economy and the parents were'nt able to pay her for her services plus the added expensure of toy's beds cribs and whatnot you wouldn't be able to even get it started it's reallly expensive to get going just for the supplies she needed she was looking at $5-6k it's alot you may want to rethink daycare:)
    chica679

    Answer by chica679 at 12:17 PM on Jan. 20, 2010

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