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Kelson Water
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does anyone have experience with applying for a small business loan? any certain places to look for . how to i go from wanting to open a food truck to actually working for myself and operating a food truck?
 
John Polk
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When you say 'food truck', do you mean a truck selling produce, or selling prepared meals?

Rules/regs would be different for either of them. Each state/county/city has their own rules governing such operations.
A lot will also depend on what is subject to sales tax in your region. Some states tax groceries, and I believe they all tax prepared meals. If you are selling non-taxed items, it is much easier to set up...one less big hurdle to jump over.

As far as getting a business loan, you will need a detailed business plan (with facts and figures) before anybody will talk to you. From my experience, the only people who can get a loan are the people who don't need one. If you are wealthy, everybody wants to loan you money, but if you are poor, they pretend that you don't exist.

 
Kelson Water
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im thinking a food truck or food cart that sells local carrot juice and/or local bean burritos.

i somewhat remember hearing on npr about organizations that coordinate individual investors with small business. the investors make micro-loans to small business at lower intrest rates than banks.

i am almost certain i have heard of this method of loan before.


yeah. "things" have changed alot since i heard about it maybe six years ago, though i am wondering if anyone has seen anything like it since.

thank you for the thoughts
 
Rufus Laggren
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Learn how to make a business. You're going to be an entrepreneur! There are schools and courses for just this thing. Don't know what resources you got near you, but look around. What I learned back when is that doing anything at all requires pushing your nose out there and talking to a LOT of people. You want to learn stuff. You want to arrange agreements. You want to buy stuff. You want to get you name out there to customers. You want to network so you know what's happening in your chosen field. Look at Paul, he's doing it right in front of us all. [edit: To be clear, I refer to Paul's frequent solicitation for input and his continuous efforts at connecting w/people; don't have a clew about his banking...] You'll do it different, but business is all about people and generally speaking the more the better - with obvious caveats. One trick my teachers taught was that you must be able to answer the question "what's your business" and answer it well in 15 words or less - something like that, been a long time. The point is distill your essence so you can put it across fully and with confidence in one or two sentences. You really want to make it possible for people to hear you and also understand quickly, clearly and easily; muchos wordos don't cut it in a face to face opportunity.

Another thing I learned is that the one single most important startup tool is the BUSINESS PLAN. Required. No shortcuts. No hiding and wishing and dreaming. BUSINESS PLAN. It teaches you the facts of life as you make it. Start to finish, every detail, contingency plans, prices, wages, equipment, next years gas price, the works. It shows you and others that you're serious. It's your primary tool to get funding.

Business ownership is not a job, it's a vocation. It will be 24/7 for 3 to 5 years, 60-70 hours/wk - or more. For a long time any minimum wage grunt will be making more money than you on an hourly basis. If possible find a small group of people starting up just like you; think support group, trade war stories, tips, all that stuff. Helps the psych.

Know that you are embarking on one of the most truly American traditions and it need all you got one way or another. The above is a laundry list of things that will give you an edge, improve your odds - take what you want and run with it. <g>

Rufus
 
Rufus Laggren
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And your question:

> biz loan

You look everywhere. Friends, family, members of your church, big bankers, little bankers, your land lord... Re. banks, be _sure_ to shop around. Policies vary widely. Per above it's pretty much required that you have a really complete business plan. No biz plan = no thought to most people and pretty much they're right. Most new businesses are family funded. Bankers should be vetted but it's rare to find any enthusiasm there. But they hung out the shingle so go make them earn some of that money they make by talking to you. Get as much info from them as you can: advice, leads, references, anything they can say could help later.

You basically want HELP. Help comes through people. So we're back to my free advice above. Talk to everybody (do try to talk sense, though); everyday, everywhere. Make connections, friends, even acquaintances are good. If you don't have eidetic memory, keep notes, organize the notes and follow up on them. I doubt very much Facebook will help you much here, but you should probably establish a presence there so you can put it on your cards. Oh. Cards. Meet people hand out cards. You're a businessman now.

Rufus
 
Kelson Water
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thank you=)

 
Josh T-Hansen
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Location: Zone 5 Brimfield, MA
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You are more likely to get money if the business is already generating an income, even one very modest. Even if you are just doing the very basics. Then you can get a loan and expand to a point where you even make a decent hourly wage/profit.

Also would help to have all possible contracts negotiated.
 
neil bertrando
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One potential source for loans of this type might be the Program Related Investment type from foundations that Eric mentions in his podcast.

I'm not sure where to look for this PRI type, perhaps Eric can add some details on this.
 
Kelson Water
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i will plan on listening to the pod cast though yeas, it would be fine with me if my question about loans was answered directly here by Eric


=)
 
Jocelyn Campbell
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Here's a bit of a repeat of what John, Rufus and Josh said, but maybe a bit helpful about what not to do.

A handful of my small business clients applied for loans at regular banks and were turned down. I was not involved in the bank loan application process, though I think all of the rejected applicants had these factors in common:

  • fairly new - only 1-3 years history
  • low profit margins
  • little or no assets as collateral
  • .
    One was able to get a loan from a relative.

    One was patient and eventually got a very small loan from the bank (+/-$500) to begin building a business credit track record.

    Other businesses have used credit cards to finance early or low cash periods. (Not really recommended.)

    Note also that if your food truck is considered a restaurant, the failure rate for restaurants is crazy-high - I recently heard that 9 in 10 fail. So, I'd recommend start scrimping, saving and setting aside your own funds!

    Kelson Water wrote:
    i somewhat remember hearing on npr about organizations that coordinate individual investors with small business. the investors make micro-loans to small business at lower intrest rates than banks.

    i am almost certain i have heard of this method of loan before.


    The Slow Food movement has spawned a Slow Money movement, which might be what you heard about on NPR. Besides the PRI Neil mentioned, I've been wanting to learn more about BALLE / Be A Localist. Perhaps they might have some links or resources for you.
     
    Eric Toensmeier
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    Many options many already covered here.

    Regular banks.
    Friends family credit cards.
    Put together a CSA model and have people buy shares ahead.
    Join a small business program with lending options. I started my seed company that way - went to a class every month and that same group of farmers had a lending pool. This group is now called Accion USA.
    I know more about farm specific loans which I addressed in another post.
    There will be at trainer at FPC who is writing a book on creative financing for food businesses, Elizabeth U. Send mean email at toensmeier AT gmail and I'll pass on her info. She worked for Slow Money who would definitely be someone to talk to.
    Also do order the fall issue of The Natural Farmer which consists entirely of excellent profiles of creative financing of food businesses, including two examples of million dollar loans including High Mowing seed company.
    Goodluck!
     
    Angelika Maier
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    I would start without a loan. I think at least half of the start ups fail and then you have the loan and no business. I would safe up for a very old truck. When you are talking about food truck I would not go fancy with burritos. I lived in an inner suburb and there was an old man with his son and they sold their produce. They came once a week at the same time had a bell an cried potatoes, strawberries vegetables. The son had to bring the potatoes in the cellar. They made a good business even there were a lot of greengrocers and markets three times a week. In Greece we saw the same, but they stood at certain corners rather than driving around and they had somewhat more choice.
     
    mick mclaughlin
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    Location: Augusta,Ks
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    Don't borrow money, for nuttin, never. It is a sure recipe for failure for most folks. Start small, use old crap. The quality of the product and your ability to supply it will lead to success or failure.
     
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