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Small Business Loans?
So as you may or may not know, I plan to open my own bakery at some point in the next few years.
I have been searching for a commercial kitchen to rent out for months now without success. Two Fridays ago I met and talked with someone who said they were willing to work out a deal.
She contacted me today and said that upon consulting with some other people, she doesn't feel comfortable doing so due to the risk involved. So, I'm back at square one.
Many family members are telling me to just get a loan and open up a place. My original plan was to just rent for now while I sock away some revenue to pay for the necessary space and equipment. However, after not having any success in finding a place to rent, I'm really getting frustrated.
I am considering just checking into getting a small business loan. I have no clue how it works though. Do they look at your personal credit to determine approval/denial?
I'm just feeling bummed about it all. I was getting so close to having a rental! I just want to get my business going! Its frustrating to feel like your making some headway only to get knocked back down again.
I really didn't want to start my business up with a loan to pay back, but I;m beginning to think it may be the only way. I technically can't really get started until I have a licensed kitchen, and since I can't find a kitchen rental, I'm not seeing much of a choice.
Boo. 
Re: Small Business Loans?
Have you looked into SCORE ? I think it's a good general resource, and will have lots of help / what to expect with finding a business loan. I assume personal credit history will be a part of the process, but I think they will also want to see a solid business plan plus your own start up capital.
Is the "discomfort" she feels something that could be solved by having business insurance? Because you would need that anyway.
I would also look for a mentor of some kind -- someone else who has been successful doing what you are trying to accomplish. You may need to go out of the area to find someone willing to cooperate, but you should be able to find someone to at least conduct an informational interview and maybe even form a good mentor-like relationship with.
I'm sure the others will have advice, but that is my $0.02!
Slowly but surely.
I don't want to sound pessimistic, but business loans are very hard to get right now. Most business loans are for expansion capital. You would need 2 years worth of revenue to qualify for a loan.
I would start with a great business plan because you can't move forward until you know what you need and how you intend to pay back the money. You will need an awsome business plan to attract an investor or get a loan. If you own your home, then you can take out a loan against your home, but this is very risky because if you default on the loan, then you lose your house.
I would go to the Small Business Association and see if your area is offering grants or loans for people to start businesses or any other incentives (don't count on the SBA having lots of money since they have had their budget cut receantly). If you have a good working relationship with your bank or credit union, then I would start talking to someone there once you get your business plan squared away. Again, the first step is to come up with a solid plan for how much money you need and how you intend to pay it back.
What I have seen work in the past is a multi-loan agreement - several smaller loans for assets such as equipment, building improvements, etc. These loans have those assets as collateral. Loans like this are easier to get because if you default on the loan, the bank at least has assets as collateral. The loan agreements that I've seen do include a revolving line of credit for operating funds.
Best of luck. Starting your own business can be a scary but exciting time!
I would look for a business incubator in your area. I've seen a success story on an incubator that provided a kitchen for exactly what it sounds like you need. This website may help: http://www.nbia.org/links_to_member_incubators/index.php.
Otherwise, I second the comments regarding a business plan and contacting SCORE for technical assistance. There are few to no grants for small businesses (I don't know of any) so don't get your hopes up for that. You may want to try a local community bank wherever you are, but like someone else said, it will be very difficult as a start-up. Instead, go to your city or county's economic development department website and see if they have resources for non-traditional credit that might work for your situation.
Good luck!