small business loans are not an investment vehicle further, regulation has generally strongly discouraged banks from mingling retail banking / loans with investment grade opportunities. They're formally structured differently because of economic realities in addition to regs.
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I mean this with no disrespect, but have you done a startup? Is this an area you have much experience with?
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Replying to @bitemyapp @0K_ultra
have worked at early stage startups before and gone pretty deep on financials of companies of that class. also spent a modest amount of time adjacent to the finance industry via internships at investment bank.
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and if it counts, was a "co-founder" at a brick and mortar comic book store one time in the sense that I was working as a combined store clerk + accountant and assisted the owner with some financial organizing
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Replying to @danlistensto @0K_ultra
Okay, can you lay out the pre-loan financials, tell me what they wanted the loan/investment for, how it would be spent, and what impact that was anticipated to have on revenue?
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Replying to @bitemyapp @0K_ultra
in which example? we talking any of the ones i've actually had experience with or a hypothetical? i'm not really sure what you're asking me besides interrogating me to figure out if you can dismiss me or not. if that's the case it would be easier if you just said so
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Replying to @danlistensto @0K_ultra
I want a detailed example of someone that couldn't get financing
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Replying to @bitemyapp @0K_ultra
k, here's one from the brick and mortar comic store. shop founded in 2005, operated under original owner until 2009. rough patch happens, three consecutive loss months, store would go under without a loan to covering operating costs until recovery...
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original owner can't get loan. instead, find's a buyer, sells the whole business. new owner comes in and takes over, makes a few cosmetic changes but mostly runs the shop as is. 2 months later rough patch ends, store becomes profitable again.
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a relatively small loan would have kept the original owner in place. the sale to new owner was at a distressed price (for obvious reasons) and original owner would have been better off with a loan if it had been available.
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under normal circumstances he might have been able to get a loan. this all went down in 2009 when the credit market was dry and tight so for reasons having nothing much to do with the business itself he kinda got a raw deal.
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