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$60000 Bank Loan for Bad Credit Applicant – Morongo Valley, CA

The application is for a $60,000 bank loan to start a new business in the Morongo Valley area just outside of Palm Springs. The client has a business plan, which according to him is well done and states clearly all of his capital expenses and operating cash flow. The business is landscaping, water landscape development and maintenance for customers primarily in the Palm Springs area which continues to enjoy a solid economy at least in the area of landscape maintenance.

The client cannot seem to get approval for a loan for his business. There seems to be a number of contributing factors which appear to have contributed to being turned down for this bank loan. First of all he does have a bad credit rating which makes lenders take a much closer look at the loan applicant and apply more strident rules regarding approval for a loan of this type. Secondly, this is a new business and even with the business plan and solid market in the area, it is unproven and many lenders are unwilling to take this sort of risk for an unsecured loan with bad credit. Thirdly there is no security offered for this loan. In order to protect the lenders, some sort of security should be offered against the loan which would remove some of the concern about risk associated with this loan.

The client mentioned that he would use the funds for purchasing some equipment and also for initial operating expenses.  While this is a viable use of the funds, they do not represent any kind of security as far as the lenders are concerned. If the client can provide some security for his loan, he will have a much improved chance of being approved for a bank loan with competitive interest rates. Security typically would consist of equity on his home if he owns one.  Full disclosure of the value of the home, existing mortgage etc would be required along with an appraisal. The loan would need to be registered as a lien against the home in this case and he may qualify for a line of credit which would be more useful to him in operating his business. Further discussion in this area will be needed.


Bank Loan Amount :: $60,000

Bank Loan Application and Processing Speed (when do you need the funds):: within the next month

Do you currently have a mortgage? :: yes, a small mortgage that matures in 7 years

Bank Name and Branch :: Union Bank, Yucca Valley Branch

What City/Town, State and County do you live in? :: Yucca Valley, California

Zip :: 92284

What is your employment field? :: Landscaping & Waterfall Features

Employment Position :: foreman

When are you paid? (monthly/weekly/biweekly):: Weekly

Your credit rating to be – excellent, fair, or bad? :: fair to bad

How did you find us? :: searching for bank loans online

How are you paid? (direct deposit/paper check):: direct deposit

Gross Amount Per Paycheck ::$1000, varies a great deal depending on contracts

Do you agree to have this information published online, without your PRIVATE information of course? :: sure

Extra information here please (some detail):: I am foreman for a local landscaping company that serves the Palm Springs area as well as Morongo and Yucca valleys.  We do pretty much everything from cutting and maintaining lawns, trimming shrubs to climbing palm trees to removing the palm frawns. We also build and maintain water landscaping projects for home owners, hotels and golf courses. Although we are in the desert, there is an abundant water supply and many people have irrigation systems as well as ponds, water falls, and even streams. Most people will hire someone to design their landscaping and then we build the design as per the plans.

Business has been very good and I have decided that I would like to start my own business. Instead of working for someone, I would hire my own crew and bid on contracts etc gradually building up the business over the next couple of years. Even with the down turn in the economy, the demand for this type of work continues to increase in this area since it is a vacation playground for the LA crowd.

Note to Lender :: I need approximately $60k to get started. I need to purchase a truck and a number of tools, set up my company, hire employees and establish lines of credit with equipment rental companies in the area. Initially I will rent most of the equipment, however over time I plan to purchase some of the equipment that is used often. Basic things such as lawn mowers, scalpers and trimmers will be bought as part of this start up endeavor.

I tried to get loans from several banks and was turned down in every case. There were a number of reasons however the predominant one seems to be my credit rating. I had a solid business plan developed which described all of my plans, however this was deemed to be insufficient to counter the credit risk that the banks perceive. I do not think they are into helping small business get started.

It is quite frustrating. I have the plan, I have the knowledge and skills and can get good employees in no time. I just do not have the capital to get started. This is the last chance for my business and I am hoping you can help me out by either approving this loan application or putting me in touch with someone who can, at rates that are competitive.

Category: Home Mortgage Loan APR 4% APR 5% APR 6%
Loan Principal $60,000 $60,000 $60,000
Payment Schedule Monthly Monthly Monthly
Length of Term 5 5 5
Amount to be paid $66098.86 $67623.57 $69148.28
Total interest paid $6098.86 $7623.57 $9148.28
Paid per installment $1086.56 $1111.62 $1136.68