The other problem I have faced is being self employed with doing service work seems to also go against me. If I work at a dead end job with little chance of making any extra money every month am a good loan candidate. But if I am self sufficient and can increase my cash flow with what I spend from the loan I am a bad candidate?
One thing they wanted was records for what my material assets are. Thats not a problem since showing what I have and its current market values is easy for me.
What they dont like is most of what I own I acquired by using the buy it broken and fix it method. The fair market value assessment of my equipment is many times higher than what it was worth when I got it. However they see it as bought broken and worth broken value against a loan.
To them it doesn't mater that I purchased a broken welder for $100 and fixed it and now have a fair market value $1500 welder. They still see it as a $100 piece of junk. Same with most of my other higher value equipment items.
Plus things like when asked what my yearly profit is I told them its about zero. Because what ever doesn't get used for normal expenses goes into home and shop repair and improvements. That is whats left gets reinvested into my business.
Its not that I cant make reasonable loan payments but rather since they were not an issue I have not re budgeted my monthly expenses and work load to compensate for the greater financial outlay. I can easily bring in the added money if I need to but until I need to there is no gainful purpose in it.
I typically dont put money in savings if I can use it to buy something fix it and make a quick return on it. I do have more equipment I can sell but at this point in time the market value is low and I am reluctant to cash it in being that its currently not worth half what it was last year at this time. Because of that I wont have enough profit to cover the basic house and shop expenditures if I sell it.
I felt a low interest loan would work well and when the market for my equipment went up in year or two I would then cash it in and pay off much of the loan at that time.
Unfortunately the losing the two customers unexpectedly killed off most of my reinvestment cash flow and all of my winter savings potential and now I need to get things fixed up and make the shop better for winter work in order to change my direction enough to make it possible to recover those looses by doing different types of work during a time when I normally dont work much.
The bank is looking like a bad option and picking up a longer term 'regular job' may be my only way to get this done this winter.
The more I deal with this I find that everything seems to be set up completely backwards from what common sense logic would seem to dictate. Its partly why I dont do loans in the first place. Every time I do look into one they seem to have gotten more twisted and just plain stupid as to what hoops I have to jump through and what ridiculous criteria I need to meet.