Well hello there Bloomy’s Blog followers (official and closet alike!)
I am the Rhino and although Katie does a fantastic and hilarious job of detailing our adventures, it is time for me to voice my 2 cents.
Some of you know me and some of you may not yet know me. Those of you who know me have an intimate understanding of my tendency to voice what can be a strong opinion at times. It is my hope that those of you who do not know me yet can learn to love and appreciate this filter-less take of my surroundings.
Rhino’s Take on Banks and the Bank’s Initial Feedback for Bloomy’s Loan
I would like to preface this section by saying that our contact at the bank is a very nice and helpful woman. Any and all ranting, venting, b*tching or other critical verbiage is not aimed at her but the banking system overall.
In all fairness I am already bitter against past banking practices that propelled us into this awful recession. I mean seriously I know someone who got a mortgage for a house before the crash with a utility bill that he doctored to have his name on it. He had a little insider help at a bank, but that is just plain ridiculous. What really burns me is Mortgage Insurance. This insurance does no good for the homeowner, but was supposed to be a fail-safe to protect the bank’s investment. What the hell happened to that money? I mean this kind of money is supposed to be locked away in some nominal interest bearing savings account right? Hell no! Put that sh*t in the market and gamble with it son! Oops now we need it for the actual purpose that the money was collected for but we lost it all. Oh well, have the government bail out the banks and then have the banks race to pay the money back to the government because they can’t take advantage of anyone with those pesky government clauses on the borrowed money. I almost forgot that the last part involves giving the bank execs bonuses for their great work. Jerks…
So anyways, like I was saying, Katie and I went into the bank with a wonderful appreciation for banks and their lending practices. Our blood, sweat and tears poured into our 65 page business plan that we were firmly convinced was probably one of the best ever made. :-)
As we expected it took the bank a little over a week to provide some initial feedback. This was actually some very necessary down time for Katie and I. I am a laid back guy for the most part and I am a very proficient sleeper so when my left pectoral muscle began twitching and I had several nights that I could not sleep I took it as a pretty good sign that I was stressed to the max. This week was great and via some yoga, gardening, walks, talks, killing fools on COD and several bottles of wine the Bloomy’s management is tick, twitch and sleepless night free (with the exception of a small incident which I describe below.)
Katie and the Cricket-Frog
Katie and I encourage each other to maintain healthy relationships with our friends whether it is a guys’ poker night or her ladies’ book club night. Either way we end up with a few nights on the calendar each month that are designated for this purpose. We both have our unique activities that we like to enjoy absent our partner. I tend to get some items crossed of my self-made honey do list, attend happy hour, watch non-Katie friendly movies or my favorite activity which currently is playing Call of Duty (COD.) I’m not totally sure what Katie does when I’m gone, but I enjoy visions of her vacuuming in the nude, reading her favorite book in a tub full of bubbles or simply making lists of things that she can do to please me. ;-)
We had one of these nights this week. After unboxing our new dehumidifier and connecting the direct drain hose I retired to the couch and to kill some fools on COD. Katie got home while I was still playing and was tired so she decided to head to bed. Please keep in mind that Katie is a light sleeper and can be kept awake or woken up by nearly anything that makes even the tiniest sound. She hadn’t slept well for like 10 days in a row. After I succeeded in killing dozens more pre-pubescent boys on COD I heard footsteps from down the hall, the junk drawer open and by the time I turned around to look all I could see was the open door to the porch. I heard some noise (which I found out later was Katie attempting to go out the door with the curtain still down) and the door slide open. I set the controller down and scampered over to investigate. What I saw out the sliding glass door was a barefoot Katie with a flashlight in one hand and the other hand in a fist pounding the ground outside our bedroom window yelling, “Die you freaking idiot!” I was a little confused to say that least, but got her to come inside only to explain to me that for 10 minutes while on the brink of sleep a (what had to be) large Cricket-Frog was croaking outside of her window. Even with her ear plugs in she could hear its lonely croaks and it was driving her to madness. It was silenced after her violent attack so she was convinced that she had either killed it or mortally wounded the creature. So just to be sure, like a good man, I took the flashlight from her, gave her a hug and told her to go back to bed and that I would stand watch for this Godzilla-like monstrosity that was keeping her awake. 5 minutes after standing in the doorway listening and watching for the Cricket-Frog and nothing neither made a sound nor stirred in the night. I went back to bolstering my manly ego by destroying high pitched voice basement dwelling pre-teens and Katie went back to bed. Just as she was once again on the brink of sleep, the elusive Cricket-Frog croaked once again. A frustrated Katie retired to the quieter guest bedroom to get some sleep (which she also utilized if I snore too loud or toss and turn too much) and I continued to play COD undisturbed. I did not know that Katie gave up the battle and conceited defeat to the Cricket-Frog nor did I hear the ferocious beast when I retired to bed. We have yet to hear this undocumented species since that magical night and pray to the heavens that we never do again.
Anyways back to the loan feedback…. The type of loan that Katie and I are applying for is called an SBA loan. As a wonderful anecdote I have included their mission statement for your reading displeasure:
The U.S. Small Business Administration (SBA) was created in 1953 as an independent agency of the federal government to aid, counsel, assist and protect the interests of small business concerns, to preserve free competitive enterprise and to maintain and strengthen the overall economy of our nation. We recognize that small business is critical to our economic recovery and strength, to building America's future, and to helping the United States compete in today's global marketplace. Although SBA has grown and evolved in the years since it was established in 1953, the bottom line mission remains the same. The SBA helps Americans start, build and grow businesses. Through an extensive network of field offices and partnerships with public and private organizations, SBA delivers its services to people throughout the United States, Puerto Rico, the U. S. Virgin Islands and Guam.
I don’t know how the Guam division of the SBA program operates but here is the feedback that we got from the SBA:
- Initial equity from personal sources would be 30% of total loan request. I believe we talked about the potential for a higher equity portion.
- Requirement for 1:1 collateral coverage either through business assets or personal assets
- Life insurance to the extent each of you contribute to the business that can be assigned to the Bank that covers the loan balance
- More detailed resume information regarding your food service background and scope. (What did you do, where, when, etc.) SBA is looking for your "experience" running or managing this type of business or the various aspects of the business - food prep, cook, etc.
30%? 30%. 30%!?!?!?!?!?! Shut the front door! Why in the world if we have to provide a 1:1 collateral coverage would we need to contribute 30%? I don’t recall eating any lead paint chips as a child, but I must have somehow severely damaged my frontal lobe because this doesn’t make any sense to me. Take the liquid assets in which help qualify you for the loan and contribute a significant portion of them for the initial investment. That way if the business isn’t successful you are left with no money to cover the loan payment and you lose your house and/or other assets. Silly Bloomy’s! We thought that we could borrow money from the bank and keep our money so ensure that we could make the payments. Why would we think that? It makes entirely too much sense.
Food service background? If Katie and I both worked at a fast food roast beef place adding water to reconstitute what they refer to as meat would we have enough coin saved up to qualify for a loan? Does the fact that we have to sign a personal guarantee on the loan with our assets and the bank has zero risk mean that they can ask us for our food prep experience? Are they loaning money or interviewing us for a job because I thought that the principle philosophy of lending was to secure the loan? Yes? No? Maybe? Would we not have to be clinically insane to sign over our lives to start a business that we were confident that we could not run? Could I go on for hours about this? The answer is yes and you can ask my co-workers because after 5PM they hear it all.
Whew! Are you still with me? That rant left me exhausted and frankly very hungry for the heavenly nourishment of a Bloomy’s Smokey beef sandwich.
Katie and I are still in negotiations with the bank and have a conference call tomorrow with a different bank to see what madness that they have to offer, but that is a tale for another time and another blog.
Stay hungry my friends,