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To the customer who was at my desk today asking for a $125,000 loan to buy a local business:
Let me break down for you all the places where you currently fail, as well as the places where you will likely fail in the future.
You heard that one of the local bars was for sale. "Great!" you thought, "I go drinking here all the time. I can buy the bar, make some money, and get my drinks for free." I'm sure this seemed especially great to you since you just got fired from your last job for being rude to the customers. You told me you expect to be able to pay for the loan from the rent earned on the apartments above the bar. I doubt there's enough income from alcohol sales to pay the rest of the business expenses.
Your "friend" told you that the bar earns enough from summer festivals to pay the loan off by the end of the year. If that were true, why doesn't your "friend" buy the bar? How do you expect to compete with the other five bars in town, all within 3 blocks of each other? I bet you don't know that the bar's checking account has been overdrawn multiple times this past year.
Right now, your only source of income is the allowance your mother gives you out of the social security that she receives on your behalf. A large portion of that allowance goes toward your mortgage, which your mother also co-signed for, since you didn't have any credit at the time. (I got the impression that she just wanted you to move out.) Your savings account has a stipulation on it that both you and your mother need to sign for any withdrawals. If you can't handle your own money, I can't see how you could handle a business' money.
You came into the bank totally unprepared to apply for a loan. You didn't have a purchase agreement. You hadn't even talked seriously to the current owner of the bar. You didn't have a clue what sort of income the bar generates or what level of expenses they have.
You talked about securing the loan with the bar building, but you had no clue what it was worth. Well, I looked up the tax value after you left. It's under $60,000. You said you'd even be willing to do a second mortgage on your house. But your house is only worth $25,000, and there's a $9,000 loan against it now. You're still $49,000 short. There's no way we're giving you that much unsecured, and there's no way the business has that much in assets.
Legally, I can't tell you not to apply for the loan, but there's just no way. Even if I could do the loan, if you think people are going to frequent a bar that you're bartending, you're even more delusional than I thought.
And to top it all off, your breath smelled like chewing tobacco.
Let me break down for you all the places where you currently fail, as well as the places where you will likely fail in the future.
You heard that one of the local bars was for sale. "Great!" you thought, "I go drinking here all the time. I can buy the bar, make some money, and get my drinks for free." I'm sure this seemed especially great to you since you just got fired from your last job for being rude to the customers. You told me you expect to be able to pay for the loan from the rent earned on the apartments above the bar. I doubt there's enough income from alcohol sales to pay the rest of the business expenses.
Your "friend" told you that the bar earns enough from summer festivals to pay the loan off by the end of the year. If that were true, why doesn't your "friend" buy the bar? How do you expect to compete with the other five bars in town, all within 3 blocks of each other? I bet you don't know that the bar's checking account has been overdrawn multiple times this past year.
Right now, your only source of income is the allowance your mother gives you out of the social security that she receives on your behalf. A large portion of that allowance goes toward your mortgage, which your mother also co-signed for, since you didn't have any credit at the time. (I got the impression that she just wanted you to move out.) Your savings account has a stipulation on it that both you and your mother need to sign for any withdrawals. If you can't handle your own money, I can't see how you could handle a business' money.
You came into the bank totally unprepared to apply for a loan. You didn't have a purchase agreement. You hadn't even talked seriously to the current owner of the bar. You didn't have a clue what sort of income the bar generates or what level of expenses they have.
You talked about securing the loan with the bar building, but you had no clue what it was worth. Well, I looked up the tax value after you left. It's under $60,000. You said you'd even be willing to do a second mortgage on your house. But your house is only worth $25,000, and there's a $9,000 loan against it now. You're still $49,000 short. There's no way we're giving you that much unsecured, and there's no way the business has that much in assets.
Legally, I can't tell you not to apply for the loan, but there's just no way. Even if I could do the loan, if you think people are going to frequent a bar that you're bartending, you're even more delusional than I thought.
And to top it all off, your breath smelled like chewing tobacco.
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