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Is it easier to get a Small Business Loan if your buying an exciting business or starting a new one?J.B.

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Monmouth County, NJ

Jeffrey: I am assuming you mean "existing" vs "exciting.

Just my two cents. From what I have come across, getting a small business loan via a bank for either can be quite a challenge in this continually tight credit market. Start up bank loans are very difficult if not almost impossible to come by. Even finding bank financing on an existing business purchase is a challenge in and of itself. Most banks require a MINIMUM of your owning a business for two years before they will consider lending you money or issuing a line of credit.

Just for an example. I own two small businesses, maintain all business and personal bank accounts at the same bank and have a credit score in the low 800's. Both of my current businesses were startups and I utilized my own personal capital to do so. I was looking into "buying" an existing business to increase my ownership to 3 businesses and was outright told by the bank "no" to financing for the third business due to their two year requirement.

If you are buying a business with something that can be collateralized ( i.e. real estate, etc ) you may have a better chance of finding financing.

Jun 17, 2010
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R A

It is generally easier to get a loan for an existing business that to start a new one since an existing business will have some stability as far as sales and income are concerned. Either way, you will have to have your own money to put into the deal. How much do you have to put towards your business?

Jun 17, 2010

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