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Trying to start my first business

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  • Trying to start my first business

    I was wondering if anyone had any experience with SBA Loans. I have talked to banks and credit union and they say that without being in business for a year and showing a profit they cannot help. I was wondering what any of yall thought about the process. I want a loan to get my portable equipment and put a flat bed on by truck and hopefully 1 years worth of working capital. Any info will be helpful. Or, tell my how you did it.


    Thanks,

    James

    millermatic 135. various other tools.

    want a miller Trailblazer 302 with full mig, tig and stick setup.

  • #2
    ewingsteel,
    I suggest just getting a signature loan on the welder and the truck bed.
    Forget about the working capital. Why pay interest on money you have in your pocket? When you get jobs, ask for half down and then get the rest on the completion of job. Believe me when I tell you to get half down. If a customer is not willing to do that they normally won't pay the rest. Don't worry about turning down work because of this. There is plenty out there.

    Good luck, JWOOD

    Comment


    • #3
      Good luck. I tried years ago with 6 different lenders only one said yes but he wanted a large kickback in cash. I just didn't have enough equipment and machinery to put up....Bob

      Comment


      • #4
        Good luck

        Its do able Ive been in buisness now for seven years check with your local weldig store I financed my first machine through them with no trouble get your name in the phone book asap.hope this helps

        Comment


        • #5
          Hey Guy, might try [url]www.angelinvestors.com, you're going to write a business plan so do it right now because anybody with a PLAN has got a chance to get a loan, might try friends, family for loan but first write a business plan. This shows people your serious about your Business you can always make change as the first year progresses plus it is fun to look back at your Plan and say Hey I made every one of my planned goals and if you didn't make your goals then figure out where you need to improve on! check with your local chamber of commerce they might give you some tips for starting a small business. I would'nt recommend getting a SBA loan heard too many bad things about them, ex. they want about 10-20% of loan amount which if you had 10-20% you wouldn't need a loan in the first place. get some business cards made if nothing else it's a start hand out to friends, ask local welding shop, if they have a spot to put your business cards for small jobs they don't want, lumber yards, trailer sales shop, ranchway feeds or feed lots look in the yellow pages for places to put your cards up then hang on s--t will happen, you'll have some business? Your welcome, Welder Craig
          Last edited by WelderCraig; 01-15-2007, 08:38 PM.

          Comment


          • #6
            Thanks for all the info. I am in the process of getting flyers out to the local feed supply stores and getting business cards made. I have a 40 hr/week job now, but not getting anywhere. Have been welding for 21 years and ready to take the plunge. Should have done it earlier. Thanks again for all the great suggestions.



            James Ewing

            Comment


            • #7
              I tried the SBA route when I first started my trucking company. After filling out all those stinking pages and faxing in maybe 25 sheets of financial info and tax forms, they came back and told me I needed $150,000.00 cash in the bank before I could qualify for a $28,000.00 loan for a truck. All that wasted time for that baloney. To say I got mad is an understatement.

              Anyway, I found a leasing company that got me going. They specialized in rolling stock, trucks, cars, trailers, tractors, etc...They even are carrying my welding equipment now. If you found someone like that, maybe that would be easier. Leasing equipment is good come tax time as well..more paperwork, but you can write off more.

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              • #8
                I got a discover card and put my Trailblazer on it. I have a trailer I made in welding class and I'm going to scrounge for the other things I need. It's not going to make me the envy of the welder community but as I make money I'll put some away for new equipment....although, I'm trying to think of a way to come up with money for a suitcase mig welder.....anyway. Start smaller and look for a line about this on the motorsport board because there's a really great line about this subject. Also, you will get to know your own area and how your business will work.
                GOOD LUCK!

                Comment


                • #9
                  ewingsteel,

                  Welcome to the self employed world of contracting.....some swear by it...others just swear at it

                  Anyway, here's what $.02 I can offer. I started in my business (not welding, but the foundations are pretty similar for most things) by basically being sponsored by another guy. Mind you, he didn't co-sign on anything. I wouldn't let him do that even if I needed it. I was either going to get it on my own, or at least not take somebody else down with me if it came to that. By having someone like that, I was able to get to know some of the folks in the industry. This of course included the financial aspect of it too. I had my first real start with a small family owned bank that didn't have to jump through all the hoops of a larger operation. I think they only have three branches and you actually know your banker and tellers by first name. I have found that it is easier to get in to see someone that way. Just be open, honest and completely upfront about what you are needing and wanting along with your assets and liabilities.

                  If you are wanting to get into the field work side of it, don't overlook renting equipment. That way you can use if for the job at hand and then turn it in when you are done. No long term financing needed. Plus, if you go lean for a while, then that's one less thing to worry about. Also, it will give you a start on developing industry related credit references. We currently have $200K wrapped up in equipment, but still rent a lot of stuff that we need, especially if it is a new venture that we aren't completely sure about.

                  Here's a little tip from a general contractors side. We get a lot of random faxes and letters soliciting work. To be honest, most go straight to the trash. The ones that do catch my eye are the ones that take the time to put together a professional looking packet. I'm not saying go out and spend 5K with a marketing firm, but you'd be surprised what you can do at Kinkos. First impressions do make a difference. I'm always looking for guys that appear to be in something for the long haul. Not just filling a gap because they were fired last week for punching the boss. Two very important things I look for that will tell you if someone is really wanting the work: Do you have your insurances (liability/workers comp) lined up and a copy ready? Do you have any specific licenses that I need to see up front. Most guys hiring don't have time to baby sit and get your paper work together for you (nor should they). If you show them you are trying to make their life easier, they will be more willing to work with you.

                  Good luck, and remember....when you work for your self, you have the best and worst boss you could ever imagine!!

                  Steve

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                  • #10
                    trying to start my first business

                    i would say go for it ! i have had my own business since i was 14 yrs old/ i am now 60 and have not regretted it once
                    steve gave you great advice /listen to him/the only thing i can add is i am taking courses at a local community college in welding/breaking the bad self taught habits and learning the new tech./just bought a new dynasty 200 dx and trying to figure out the bells and whistles/trying to get a small welding business started where we moved to a lake area/the whole point to this is take a course in small business at a community college/it will really help you to produce the paper work to present to banks & customers /belive me knowelge is power even if i can't spell
                    go for it pat from texas
                    p.s. i semi retired at 38 i was lucky but i still love to weld and fab.

                    Comment


                    • #11
                      Is TIG Necessary?

                      Do you already have a TIG-rig you plan to incorporate into a work truck? If not, I'd suggest you putting that at the bottom of your list, which could save you between $2000 and $4000 in startup costs. There is one exception to that rule that I've found, but I already had a PrecisionTIG185 when I started my own mobile business, and that is the mobile marine aluminum repair business...going to different marinas and working on pontoon sponsons, t-tops, engine mounts, jon boats, etc. In most/many cases, a small MIG machine or a spoolgun will work fine, but there are occasions where the marinas want a new/repair weld to match an existing weld, which could be a TIG bead as opposed to MIG.

                      If you don't already own an AC capable (probably) inverter machine, then I'd suggest sticking with worrying about longer leads for your generator-welder, loading up on a wide variety of sizes/compositions on your Arc rods, and several thicknesses and compositions of wire spools. If you think you may encounter some mobile pipe welding out there (I have a contract with an agriculture-irrigation company for some of their field-work) then buy yourself a stinger-rig setup for DCEN lift-arc and a couple of semi-transparent welding curtains you can setup in a hurry in the field to block the wind. I carry one (stinger rig) for just that reason, even though I could use the PT185 with the hand amptrol or foot pedal.

                      Don't forget about your field cutting capabilities....think of a small O/A rig or even take the money you might've spent on a nice TIG machine and divert it to a plasma cutter (although an O/A rig is still a necessity for thicker materials). You mentioned "various and assorted tools" in your signature, so I'm not sure if you've got a nice chop saw and at least two 4.5" grinders, but I've found all three to be helpful (so I can keep a grinding disk on one and switch the other back and forth between a cutting disk and a flapper disk).

                      If there's any way you can slide money aside from your regular job to purchase all of your tools and bottles and hoses over the course of 3 to 6 months, then you should be able to take out a single $5000 or less loan on your signature to purchase a Trailblazer, Bobcat, etc. Short-term loans have worked well for me...90 day payoffs that I can pay the interest on plus 50% of the capital and then slide the rest another 90 days...that way I haven't depleted all of my earnings in the first 90 days of operation to pay for the loan. Lower interest rates that way too. I've done this twice over the past 15 months and it's worked very well for me.

                      I hope some of this has made sense to you and maybe gives you some thoughts in different, more-self-sufficient directions.

                      ~Clint

                      Comment


                      • #12
                        Maybe

                        I'm not sure about where your are money wise, but the credit card companies sometimes send out special offers with blank checks most of the time with low intrest, better than banks. You may call one like Chase, they send out offers sometimes as low as 3.5%. Just a thought!

                        Comment


                        • #13
                          The only thing I'd caution with that is to read the fine print very carefully! A lot of times those low (3.5%, 4.5%) rates will only be introductory rates and, after 6 or 8 months, will return to more-normal rates of 12.9% - 13.5% (and sometimes closer to 17.99%!!!!). Chase isn't usually like that, but some companies are. Besides, you're going to need a business bank account that's separate from your personal account anyway, right........? Just my 2.5 cents (and I am NOT any sort of guru when it comes to banking!!!

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                          • #14
                            Just my .02

                            Ewingsteel,
                            I took a entrepeneurship course 'bout a year ago, and 1 piece of information I'll always remember, is they HIGHLY suggest you don't advertise in the phonebook (at least the yellow pages). You tell a potential customre that, and you give all your competition a possible job also! LOTS of good tips here, most of all, professional business cards, flyers, etc. Good luck! We're rootin' for ya
                            bert

                            Comment


                            • #15
                              Originally posted by Bert View Post
                              Ewingsteel,
                              I took a entrepeneurship course 'bout a year ago, and 1 piece of information I'll always remember, is they HIGHLY suggest you don't advertise in the phonebook (at least the yellow pages). You tell a potential customre that, and you give all your competition a possible job also! LOTS of good tips here, most of all, professional business cards, flyers, etc. Good luck! We're rootin' for ya
                              bert
                              Bert,
                              I would think whether or not to advertise in the yellow pages could/would depend on how many other welders there are in or around your location, right? I mean, if there's only three of you in town, then who cares....you're going to be sending business back and forth between the three of you depending on who's got the current contracts etc etc etc. If there's 50 of y'all in a town of 15,000 people, that'd be a different story. There are only two of "us" in my small town of 10,000 people and we both do various amounts of advertising with varying degrees of success. We constantly send business back and forth to one another...his shop is bigger than mine and he inherited quite a few metalworking tools (like different presses, lathes, work-positioners, jigs, etc) from his predecessor, so if someone comes to me with a project that requires a bunch of that sort of stuff, I go ahead and send them to "the other guy" in town (who, by the way, is a phenominally good weldor!!). In almost all cases, if the other guy gets a call from someone who needs mobile work, like a tractor broken in the middle of a big field, he gives them my name and number. Just my 2.5 cents on the yellow pages/advertising issue.
                              ~Clint

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