Getting a small biz loan with no capital at all.

Discussion in 'Starting a Business' started by califsb, Jan 24, 2012.

  1. califsb

    califsb
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    My friend wants to start her own pilates and dance studio and has no capital at all and wants to start a brand new studio . No assets. no capital nothing.

    I told her no bank will give her a loan unless she has something to show.

    She does not believe me..

    Am I right?
     
  2. Fergal

    Fergal
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    You probably are right, but she should still try approaching banks and see how it works out. She has nothing to lose by doing that and she will learn from the experience.

    She should also look at other options such as hiring out a local sports hall, hotel conference room or studio by the hour for her classes. This would allow her to get started without the need for an upfront capital investment. She might even consider giving one to one tuition to people in their homes.

    By the way, welcome to our business forum califsb.
     
  3. califsb

    califsb
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    Thanks and thank you for the answer.

    No go she is set on getting her own studio.

    Works at a studio right now and teaches and has made up her mind and it is her dream is to open one with brand new equipment and have her own fully run studio with room for classes etc.

    I feel she is sort of in la la land but as you said.. she needs to get the answer from the bank and go through the process.
     
  4. Navida

    Navida
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    I think she can start it without any financial investment in the beginning. for this purpose she has to start by teaching basic techniques to new dance students, as it can be start from open air business which needs no cost of building, dance material etc.
    After collecting some tuition fee from her dance students she can upgrade her dance club by acquiring rental building or she may use her home for this purpose.
    It should be kept in mind that Brands are not established over a night. Its a long term process of creating name and value of your customers.
    So, take start from nothing with the vision to be a brand in the dance club market.
     
  5. DaveB

    DaveB
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    Hi califsb,

    I would also remind your friend that she is not entirely limited to getting funding from strictly a bank. Some other possible loan options I could think off the top of my head could be:

    -personal savings
    -friends / family
    -private investor
    -peer to peer lending
    -crowdsourcing
    -credit cards
    -cash advance

    among other choices. Has she written a business plan yet? Has she checked out any locations? What basic research has she done towards fulfilling her business dreams?
     
  6. sallya121

    sallya121
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    It is difficult to get loan from bank without capital.But she can ask someone to invest for the studio.
     
  7. rjd1265

    rjd1265
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    As being in the real estate world for 8 years prior and being closely tied ot the lending industry, i can tell you getting a loan is very hard...more difficult for commercial loans. You will have to have at least 20% down if not more. Best way to approach is to find an investor who believes in the product you want to sell. Health and fintness will always be around so you have good thing going there BUT this is also a tough time to get into that as people do not have extra money to spend.

    If you are in a large community who has "money" then i would start an upscale center...offer overpriced juices, great trainers for top dollar. ONce yo make a profit branch off to a more moderate crowd.

    If you are from a small community, white collar i would suggest paying like ValPak or something to send out flyers for first month free just to get them to come in.

    As for the loan you will have to contact a investor, preferably not a family member. Or you will have to have a 100% perfect, realistic business plan and projection data portfolio and maybe a bank will help you out. Start first by going to the bank where you have your car loan, mortgage, savings as they will be the best shot.

    Good luck with the new business venture.
     
  8. apatison982

    apatison982
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    It's really very difficult to get loan without capital.
     
  9. rjd1265

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    It can be done though but you are correct. She needs to bring on a partner/investor who does have funds/capital.
     

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