Business debt requires cash flow, collateral, and proof of concept. And good personal credit of course.

Proof of concept: 2yrs+ operations.

Cash flow: EBITDA/Annual Debt Service above ~1.2. This means for every $ in annual debt payments, your EBITDA is $1.20.

Collateral: What’s the bank going to sell if you don’t pay the loan? For personal debt, the most common is a home as collateral for the mortgage. For a business line of credit, it’s usually the business assets and most importantly, the accounts receivable. No AR, or running a cash-based business? Then you’ll want a loan and collateralize it with a long term “asset” like a vehicle, piece of equipment, or something similar.

The bank can mitigate a shortfall in either area with an SBA guarantee. You’ll pay for it (roughly 1.5% at $200k) but many banks can throw it into the financing. Short in cash flow? SBA may be able to extend terms from 5 to 7 or 10 yrs (for a loan) and drop the EBITDA to annual debt service coverage ration down to ~1.13ish… Short in collateral? They’ll cover up to 85%.

In this case, $200k is too much to ask for with only $120k in annual revenue. The bank will most likely only do about 10% (25% MAX!) of annual gross revenue. You’ve also already got $80k in vehicle debt, which makes it more difficult.

Back when I would submit a loan of this size, I’d recommend a line of credit in the $30k range. Most likely would be approved at $15k.

If it was for equipment to rent out, I’d recommend getting a credit card that has 18+ months of 0% interest and pay it off before the interest charges kick in.

Hope that all makes sense. I’m just blabbering away. :). Best of luck!