I am on the verge of applying for a small business loan. I do feel that I need it. Heres why:

Right now I have to commute 15min every evening after my day job to edit on an imac that is slow and frustrating when editing in HD

I have 5 projects lined up with one in production now.

Now I have yet to turn a profit. Yet. The other 4 jobs are paying jobs so I know that I will be making money. I have enough outside income (dayjob) to pay the small business loan if my company fails.

Who has gotten a small business loan? Would you do it again if you had to? I'm scared of it. Can anyone put my mind at ease?

Sounds like you mean an SBA loan. For equipment it might be simpler to go to your bank and discuss a business equipment loan (don't refer to it as a "computer loan", "airplane loan", etc. since those might imply expertise needed in a particular loan type which they likely won't have). Alternativelly, look into a business equipment lease. You can typically get a 2 year lease with a $1 buyout provision at end of term. Any of these loan types you are likely looking at a couple points over prime, which is why in general it's a bad idea to borrow money unless you're certain you're going to make a lot off the equipment you bought via the loan.

If you aren't in a position to make a relatively small purchase like a computer without a loan, I would not recommend taking out a loan to get one.

Do you have another job? Can you use your income from that towards the purchase of a computer?

Many vendors have services like "Bill Me Later" or basic financing that may be a better idea than a bank loan with high interest. I have used Sweetwater.com's "Three Easy Payments" option when spreading expenses out over three months was more convenient than making the purchase outright. I think the convenience charge was $10 for each purchase, which is significantly less than a bank loan.

FWIW, I used a "fast" (slow) borrowed Mac for several months before saving up the money to get/build my own computer.

The other thing about an SBA or bank loan for business is this. One, with the economy the way it is they seem to be only loaning to established businesses, TWO, you would need a business plan detailed out to the nth degree, THREE, unless you personally guarentee the loan the chances of getting a business loan would seem to be pretty low.

I think you'd be better off either dealing with what you have until you can save enough to buy what you need for now until your business have a track record, the economy loosens up a bit and the banks start lending again to startups.

I thought about the business plan thing....when I asked the banker he said he did not require one. Is that weird?

I can buy the computer with my outside income, but my specd out mac is 6k and thats with what I feel I need to last me a few years. Also. It will take me awhile before I can make that purchase. This business equipment lease sounds interesting though...

I could rent an edit mac for the jobs, but that comes in at 250 a day. I can only work on the projects for 3-4 hours a day after my day job.

Interesting article:

6 Tips To Successfully Apply For An SBA Loan | Rogerson Business Services blog (http://www.andrew-rogerson.com/6-tips-to-successfully-apply-for-an-sba-loan/)

Your 6K Mac may only be a 3k PC, though I understand switching platforms may be difficult. Also, buying a 3k Mac that lasts you 4 years (at least) is probably a better decision than a 6k Mac that lasts you 5-6 years. Definitely do not rent.

Don't get caught up in the tech details. Number one priority: getting work done. If buying a used Mac for $1.5k will help get you through the next two years, go for it. If you end up making money, you can use the profit for cameras, tripods, and lights. Then you'll be making big bucks (hopefully), for a rockin' computer. Buying a $6k computer won't improve the quality of your video so much as a $6k camera, anyway.

FWIW, I had my i7, Windows 7, 64-bit, 8GB RAM PC built over a year ago for ~$1,700. A high-end video card and software would push that number higher, but under no circumstances would I have spent $6k on a computer unless I was editing over 50 hours a week.

I thought about the business plan thing....when I asked the banker he said he did not require one. Is that weird?



I think $6000 is a bit of a small loan for a typical bank. Similar to a used car loan, which they don't do much research on, just a quick credit check. They'll probably make you cosign it, with your own personal credit & SSN on the line. I set up my business bank account last summer & when speaking to them about setting it up like yours, he just said write up a quick business plan, list of officers etc. Really didn't view it or critique it at all, just standard policy. Some of these "small businesses" are established landscaping companies & manufacturing & labor companies requesting loans of $100k & up, but they've been in business for 20-30 years. A bank needs to determine if they are sticking around another 10, or going bankrupt. Anyway, a $6k loan to them isn't a whole lot.

You sound pretty confident you can repay it with your day job. If that's the case, I would do it. So long as your bank is providing you the loan & decent low rates. I agree with someone else to me, $6k is alot for a computer. However I suppose that's the mac world. Last summer I got a new PC & the comparison to my old PC is night & day. Worth every cent I paid in terms of waiting, rendering, faster & more options for effects. I disagree with the previous poster, if you're going to do it, do it. Don't buy a $1500 or $3000 computer when you're pretty sure you can repay a $6k.

I've never taken a small business loan yet, but I've thought about it. Always figured it was more cumbersome like Don said. I should look into it next time. Anyway, to me it sounds like you have the supplemental means to repay it and you've spoken with your bank who's stated they're willing to offer it to you. I would do it.

Have you considered changing your workflow instead of your computer?

I've edited HD on an ooooooold G5. Single core. Low RAM. It's all about intermediate codecs.

Editing HDV raw, sucks. AVCHD raw, sucks. DVCPROHD... well, it's OK, actually... But generally, things will be less painful if you transcode your video to ProRes (LT or Proxy). You can also transcode to DVCPROHD, test a small sample to see what works best for you.

Make sure to use an external FireWire hard drive for scratch, rendering, and capture.

Generally, don't apply ANY filters, color correction, transitions, or other effects until you have your rough cut COMPLETE on the timeline. Then hit all that stuff at once to generally free your life of eternally spinning rainbow pizzas.

You may find you can get by easily enough with what you have until you can afford what you think you need outright.

thanks for everyones post! I'm going to meet with the bank on Monday. I'll report back my results.