Jane and I recently met with a banker to talk about loans. We already knew that a Small Business Administration (SBA) guaranty would probably be required, and that it would take a while for the government to process our loan application. What we didn't know was that we'll need to be sufficiently funded, and have a location picked out, before we apply.
According to the SBA, banks typically like to see equity account for at least 25% of financing. That means if our expected startup cost is $800K, Jane and I will need to come up with $200K before we can apply for an SBA loan.
Location-wise, we won't be able to sign a lease until we've received a loan. We'll definitely need to have a place picked out, though, and have it thoroughly inspected (with the help of our trusty architectural team) so we'll be able to claim a specific renovation expense instead of a broad range.
To meet our goal of being fully capitalized by the end of May, Jane and I have a lot of work to do. The SBA can process a loan application in two weeks, but they're swamped with applications right now. Hopefully we'll be able to raise enough investment capital and choose a location by the end of this month, and hopefully the following month will be enough time for the SBA to make a decision. At least we picked a suitable political climate for audacious hope.