Quote:
Originally Posted by bazooka87
I'm not saying it's trivial, I'm saying taking $3 to $1m is not the same.
'Hi Mr. Bank I'd like to loan $300k to sell books out of my garage.'
'gtfo'
People get loans like this. It might not be easy, but its not impossible.
Read the story about how Masayoshi Son founded Softbank (
https://hbr.org/1992/01/japanese-sty...-masayoshi-son). The whole article is good, but this part outlines him getting an even bigger loan than that more than a decade earlier (in a more conservative financial system nonetheless) without any collateral, business experience, or co-signers.
Quote:
When I started the company, I used straight bank loans. And that was really difficult. I went to the Dai-ichi Kangyo Bank when the company was only three or four months old. At the time, I had revenues of about $10,000 and I asked for a loan of $750,000. I told them, I have no collateral, I have no business experience, and I am not going to ask my family or my friends to cosign my loan. I will sign myself, and I’ll take all the responsibility. But unless you give me the prime rate, I’m not going to take a loan from you.
The people at the Dai-ichi Kangyo Bank said, are you crazy? What are you talking about? What are you doing here?
I said, I came to get a loan, of course.
The people at the Dai-ichi Kangyo Bank just started laughing. We can’t give you a loan, they said. Do you have anything that can convince us?
I said, no, I don’t have anything. But if you really think about business in the future, what we’re doing might interest you.
Then they asked me, is there anyone you can use as a reference?
I told them to talk with Dr. Sasaki at Sharp because he was the person I had business experience with from selling Sharp my invention at Berkeley—my pocket language translator.
The bank branch manager was a really good guy. He didn’t want to give up on me just because I couldn’t give good reasons why his headquarters should give me a $750,000 loan. So he called Dr. Sasaki. Dr. Sasaki said, Mr. Son has good business potential, so please give him this loan. The branch manager also asked Joshin Denki, and they recommended me for the loan too.
Then it was up to the branch manager to fill in the formal scorecard of the bank using his judgment whether or not to make the loan. When he used the ordinary scoring, the total was—15 against making the loan. But the last column was “potential growth.” He gave us 15 points for potential growth. So the total came out zero. He sent the scorecard to headquarters and they said, since the total is zero, you make the judgment. The branch manager said, I’m going to give him the loan.
Today at Softbank, we have a special day where we honor the few individuals who made contributions to help start Softbank. One of the people we honor is that bank branch manager.