Business owners worry about loan repayments
13 posts across 4 communities in the last 60 days; 77% from r/smallbusiness.
“Please talk your dad out of the loan before anything else. Borrowing to keep ads running is how a small loss becomes a debt the family can't escape. A schedule that promises months of guaranteed losses, then break-even, then profit is a red flag. Nobody running real ads can…”
“Hey man depending on how many years you have been operating and how many employees you had I may be able to help [re: Small Business failure w/outstanding SBA loan]”
“Ouch there is a word loan shark! Don't go anywhere near them they bite. Before even talking to a lawyer I would get all the information possible from chat and only then go to a lawyer, chat is pretty good at it and it saves you money. Also simply talk to your landloard unless…”
Two posts mention concerns about business loans, specifically the possibility of owing money to someone named 'Vinnie' and the potential for bankruptcy due to debt. This highlights financial stress and uncertainty among small business owners.
SOURCES (28)
“Please talk your dad out of the loan before anything else. Borrowing to keep ads running is how a small loss becomes a debt the family can't escape. A schedule that promises months of guaranteed losses, then break-even, then profit is a red flag. Nobody…”
“Hey man depending on how many years you have been operating and how many employees you had I may be able to help [re: Small Business failure w/outstanding SBA loan]”
“Ouch there is a word loan shark! Don't go anywhere near them they bite. Before even talking to a lawyer I would get all the information possible from chat and only then go to a lawyer, chat is pretty good at it and it saves you money. Also simply talk to your landloard unless he's in the shark class.”
“Basically: It’s my company (UK Road Freight Forwarder) but my step dad loaned me money to start it up (unofficial loan) he told me the trading address is the accountants we use who are outsourced, I’ve just found out my step dads house is the registered trading address the company is split 60/40 between me and him, me 60, him 40, we are both the only two directors. I handle ALL transport and operation from my address, I’m a logistics director, he handles accounts and invoices and is managing dir”
Valid, so $60 to float them a loan for 4 months is not worth it.
“A business loan is going to want to see multiple years of a profitable business, or you have a well paying job to personally guarantee the loan. Generally, you start by using your own money, asking friends and family, then financing. It’s not easy to get a business loan on a business without multiple years of history.”
“silly question: if the biz is in your moms name, wouldn’t she be the one to declare bankruptcy? not silly question: who are your competitors and is there an opportunity to partner your way out?”
“yes, i am going to talk about fixing that 95-100% today and second is writing down things on a document, i literally asked my dad to dump all bottlenecks, issues, process he has faced on a document as its pretty valuable to me. i asked our accountant/finance manager to give me the total expense sheet as we write down a BOM each time and also our "general expense". about the man hours and stuff, i intentionally added a time tracking column in the task management board so i know which ta”
“Also your former employee should have saved his paycheck stubs to provide to the loan officer. But if his two month most recent stubs are of his new job that is in a different industry than his previous they have to default to the 2-3 years of tax returns to show stable employment with no gaps anyway.”
“Thank you! Since you replied to this I'll give an update. Today, all my loans are paid off completely and the business is doing quite well. I have been finally making some real money now that all the profits aren't getting dumped into paying back loans.”
“But is that debt leverage or bad debt? Also Robert Kiosaki isn't in 1.2B dollars of debt, his company is. even if it all crashes down I am sure he has his golden parachute.”
“Yeah, he'll just transfer the debt to his kids when he dies, fuck 'em. Not a good "dad" thing to do... And then they will transfer it to their kids. And we wonder why the financial situation of the world is in shambles...”
“If the owner is lending personal funds to the business, it is a loan and I’ve seen businesses pay back their loans by using the bank account for personal expenses. That’s why it’s listed as a liability. It gets used up until the loan is zero. Now, it sounds like they take way more personal expenses than what was loaned in, in which case anything spent above what was loaned is a distribution that goes to equity.”
“Yeah seems like if you can get a business line of credit from a bank you know and trust. The terms are clear cut and that's the way to go.”
“While technically true, the magnitude of how much worse it is and how prevalent it is now is not even close.”
“better yet a profit sharing plan, then everyone plays a role in the store's profitability.”
Talk to a bankruptcy lawyer. There are laws to protect business owners.
“Did they invest in the business or did they loan you the money? If they invested in the business for equity, then you shouldn't pay them back. You really really should know this stuff before you start taking investments.. Do you have any paperwork at all?”
“Why did you say you would pay them back? They knew the risking the were taking, then you took all the risk away by offering to pay them back”
“Looks like your Dad needs to look himself in the mirror and notice that perhaps he is not any good as a self-employed businessman and needs to go to work for somebody else. I am not sure he will ever be able to dig out from that mountain of debt. Perhaps it would help him to estimate how many loads that debt mountain represents once you subtract normal operating costs such as fuel and insurance and what it costs him to pay his personal expenses. A bankruptcy ought to be considered. And he needs”
““Personal guarantees”. A billionaire once told me never to personally guarantee any business.”