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Credit score of 738.  Applying for a start up business loan under the Patriot Express Pilot Loan program, where the VA guarantees 85% repayment on any loan under $150,000.  The maximum loan I'm offered when I go through a loan broker?  $5000.

I was going for around $40,000.  I can't open a fucking hot dog stand for 5 grand.  Anyone have any advice?  I'm thinking about calling a credit union tomorrow, because right now my options are pretty fucking grim, and the move-in date on my lease (which thankfully has a backout clause) is Feb. 15th.

Having just obtained the smallest of mortgages possible (bought a foreclosed house in Vegas, laughably cheap), I can attest I had to jump through hoops upon hoops. Although my situation is by no means identical to yours, my suggestion would be to keeping calling around. There are many lenders out there who are simply unwilling to lend anything, and there are others who are more comfortable with it.

Regarding the specifics of the business loan, I assume they requested a business plan and you did, in fact, have an excellent one available on hand?

I do, and I'm thinking the loan broker I went through (some place out of Utah) is basically just farming their $99 application fee at this point.

ETA:  I've already formed as an LLC, have an EIN, and am registered with my county.  I've got a lease ready to go.  My ducks are all in a row, and I'm not doing this half-assed.

Fair enough. There's an opportunity to be candid with the lender, and simply ask why the amount they could possibly agree to was low. When I was confronted with my issue getting a mortgage after what was basically an outright refusal I asked them what I could do to secure a mortgage. It turned out their main beef was that I simply was self employed. Under those circumstances, they really didn't want to deal with the mortgage unless I had a 20% down payment available. I saved for a bit, got that 20%, then the loan was suddenly within the realm of possibility. Of course (predictably) there were many more hoops, but at least it wasn't a dead stop anymore.

EDIT: Of course you could also be right in these people are just looking to score their application fees atm, which is why I originally suggested to keep asking around. When I was much younger I was trying to secure a loan for a car, one bank refused to do it without literally numerous co-signers, while another one I went to literally gave me the loan on the spot. No joke, I walked out of there with the loan in my account. Shopping around definitely is going to help.

Yeah, I'm going to make one last ditch attempt tomorrow, and then I'm essentially boned.  Tempted to fly down to Utah and beat the monkey ass of my voicemail/email dodging loan officer.  Probably a mormon.  He deserves it.

Truth be told, I could probably make it work on $20,000.  I wouldn't have shit for a cushion, but I could very probably make it work.  My monthly overhead comes to around $2500, which any tattoo shop in a college town ON MAIN STREET should be able to do without breaking a sweat.  And I can eat a lot of ramen.

Out of curiosity, why only "one" attempt? There are hundreds of banks out there - call them all until you get a positive response.

Secondly, and it's another point of consideration, what kind of business are you planning to get started? I only ask because certain sectors are going to be easier right now, while others notably more difficult. Right now is an excellent time to start a repo and/or debt consolidation business, but a bad time to open a jewelery or boating store ;)

EDIT: Ah, tattoo shop.

Maybe we should start an f13 angel capital consortium.

Well, because multiple credit checks lower your score.  I figured I'd go with a loan broker who supposedly works with "hundreds" of banks and see what I could get.

There's also the factor of my lease move in date being so close (Feb 15th).  I only just started this last week because it took forever to get a damned copy of the lease.  I don't want to give up this space.  It's dirt cheap, and it's premium real estate.  The place is a goddamned goldmine.  I'll be crushed if I have to pull out.

Is the money for equipment or tenant improvements on the space?

Pretty much equipment and operating expenses.  I'll need 4 dentists chairs (which I can get for cheap, I have a guy who rebuilds them), a piercing/barber chair, an autoclave, copier, piercing stuff, and then 1st month's rent, security deposit, malpractice insurance, fire & theft, and biohazard removal.  All told the initial chunk will be around $10,000.

Your problem is trying to start a small business in a recession.  New small business failure rates are high (only half survive four years), and realisticly most financial institutions will be looking for the ability to personally guarantee the full amount of the loan.  The fact that most of it will be guaranteed by a program doesn't matter if the administrative charges and fees related to getting their money back will potentially offset a considerable portion of the amount of the guarantee.

This is extreme, but you could potentially put most of that on a credit card. If you can find an introductory rate card and pencil it out so that you can get most of it paid off in six months you could potentially swing it.  It's risky, but if losing your prime location is the alternative it might be worth exploring.

Okay, things are looking up a little bit possibly...  One of my old high school classmates on facebook is now an attorney in Lansing whose ex owned a tattoo shop.  Apparently she's going to pimp me to some private investors (ie, people who want to liquidate and tie up cash)!  Between that, hitting the credit union, and the pitiful $5000 I've already been approved for things might not be so grim.

Of course, there's also the last ditch credit card option, but I really don't even want to think about that right now.

Good luck with all this.  I hope it all gets sorted out in the best possible way.  I enjoyed looking at the stuff you did.  I think you're very good at it.

Locally run banks seem to be lending more than national banks. If you have a good local bank you belong to, you might try talking to them. At least you can see them in person. Just make sure it's actually a local bank and not just a rebrand of a big international bank (like Bank of the West). A credit union might also work, but usually require you to be a member.

If you have equity in your house or somesuch, you might be able to use that to secure a bigger loan as well. Maybe you can buy your car from yourself with a loan? ;)

The SBA also has some loan programs (no idea if it's better than that Patriot one or not):
http://www.sba.gov/financialassistance/borrowers/index.html

Your credit score is too high.

Yeah, I know, that sounds jacked, right? Guess what? They don't want you to repay the loan in full, or make your payments on time. They want you to cruise along for 6 months to a year, then start missing payments so they can charge you late fees. And extra interest. And anything else they can stick you with, because that's where the profit is on loans these days. The vig on a regular loan that gets paid back promptly on a regular basis? That's small time these days. CEO's don't get multi-million bonuses on regular old loan interest.

If you haven't done it already, check out your local Small Business Development Center

http://www.sba.gov/aboutsba/sbaprograms/sbdc/index.html (http://www.sba.gov/aboutsba/sbaprograms/sbdc/index.html)

They can be very helpful. They helped my ex wife get a couple of $50k small business loans, and her application/business plan was basically thrown together over a weekend and a couple of meetings with an SBDC advisor. Her credit score was lower than yours as well. I can't stress enough how helpful and easy they made it for her.

Lenders seem to favor small businesses that go through the SBDC because you are working with an advisor that makes sure you are doing the right things to start up a business. You can take or leave the advice, but the people at the one I'm familiar with are pretty damn good.

This. Knowing your local bank, getting to know the lending agents there and maybe the execs, is a great thing. Over time, you build up a trust no credit score can form. Also, some local banks (like mine) never went near toxic assets like the big hungry monolithic machines did.

BUT NOT THIS. Don't start a business with your own money, DON'T LEVERAGE YOUR PROPERTY, ffs. Sure, you hope the biz goes well, but you plan for it to fail. Realistically it'll take a few tries before it works out ok, you don't want to destroy your financial life on your alpha test :)

Seriously, that's the single biggest business mistake you can make. You want to be able to fold the business and walk away to start a new one, or you probably shouldn't move on it yet.

have to reiterate this: BUT NOT THIS. Don't start a business with your own money, DON'T LEVERAGE YOUR PROPERTY

also *local* Credits Union FTW.

Will places even give you a start-up loan without a personal guaranty these days? 

Not that I've seen, which is why I've mentioned it. Obviously, if you can get loans without putting up your own collateral, do it!

No. 

Established closely held businesses are usually required to have the officers/shareholders personally guarantee large loans/lines-of-credit. 

Credit score isn't the be-all and end-all of lending. Do you have a high debt/income ratio? If so the lender would be prudent to limit his exposure in case shit hits the fan, and in that case you may want to consider getting a silent partner who has good income/low debt to cosign the loan.

Along the local lines again, look for city and county business incentives. We had a hip hop 'emporium' that got a $5k check three months after it closed because, well, the paperwork had been filed six months ago  :oh_i_see:

It may seem like a Hail Mary, but I know back home in CDN there was a university's business school had a downtown MBA office where local entrepreneurs could go for help with their business plans.  They also provided some funding.  May be some help you could get near you.