[Sean Cash]

If you're going to do 2 year deals, do monthly payments and there must absolutely be a PG. If the business fails, the owner needs to be fully liable. The loan should be reported to the credit bureaus every month. Even still, I wouldn't do a 2 year deal. A friend of mine works for a large bank and it's their internal policy to decline 100% of all retail and restaurant loan applications they get, no exceptions. It's not because the loans are too small, but because the default rate for brick and mortar businesses is so high. I asked if they would do a 50 location restaurant chain with each location having been in business for 10 years, the owner having a million in the bank, no debt, and 800 credit. He said ABSOLUTELY NOT.

Lending Club does personal loans for 3-5 years. What do you think about that?

[jbrown]

If you're going to do 2 year deals, do monthly payments and there must absolutely be a PG. If the business fails, the owner needs to be fully liable. The loan should be reported to the credit bureaus every month. Even still, I wouldn't do a 2 year deal. A friend of mine works for a large bank and it's their internal policy to decline 100% of all retail and restaurant loan applications they get, no exceptions. It's not because the loans are too small, but because the default rate for brick and mortar businesses is so high. I asked if they would do a 50 location restaurant chain with each location having been in business for 10 years, the owner having a million in the bank, no debt, and 800 credit. He said ABSOLUTELY NOT.

Lending Club does personal loans for 3-5 years. What do you think about that?

I like this thread. Some very good thoughts here. The problem with a PG is that without collateral, it doesn't mean a lot. We all know what it means to chase a PG on a small business owner who has closed their business. I can sell anyone lots of that paper at pennies on the dollar if anyone is interested.