Matt’s Startup Life – SBA Loan Experience

by Matt Fischer (matt @

I thought I’d share a frustration of startup life so here goes. About a week and a half ago, I submitted my paperwork to a local “small business lending leader” bank to get a SBA 7(a) loan to take my startup hopefully to a level that would make it a business. I was trying to get money to help me with marketing efforts for the quickly approaching football season and hopefully hire two full-time employees by the end of the year. I already have the people picked out and they’re ready to jump on board when the opportunity comes available. One would be changing jobs and the other would rejoin the workforce.

I’ve built this business for over a year and a half now. I’ve funded it all myself and have run it as lean as I can. I’ve gotten over 107,000 unique visitors to where I’ve published content daily since I started doing it full-time in December 2012. I have 775 registered members. I feel I’ve taken it as far as I can right now and need financing help to take it to the next level.

A few days later, I’m told I don’t qualify because of my business type, that I’m being considered a “gambling” business. I asked for clarification since SportsFormulator does not take bets nor is affiliated with any sportsbooks. I didn’t get a clarification, all I really got was the SBA won’t go for it. That just shows you how out of touch banks are with entrepreneurs.

The SBA says “businesses deriving more than one-third of gross annual revenue from legal gambling activities” are not eligible. SportsFormulator derives 0% of its income from gambling activities. Zero. We do not take bets nor are affiliated with any entity that does. We publish sports predictions. The revenue SportsFormulator generates comes from membership to information and advertising from Google Adsense.

It’s greatly disappointing to be turned down when you’re trying to put people to work in your local community. SBA loans have been given out to many other banks and even startups. Most of these startups will never create a job. They haven’t even created one for their owner. Most got a SBA loan for the hobby business while they continue to work a full-time job. My business has steady web traffic, paying members and ad revenue. My business is ready to employ local people who want to work.

Banks want to be involved with entrepreneurs and act like they support them and the local community when that’s just a falsehood. If you’re not a business that fits their archaic business types, you can forget about getting funding.

SportsFormulator brings money in from around the world. We have clients from multiple continents. We have web traffic from 192 countries (per Google Analytics as of July 22, 2014). Why does our government and local banks not want to support a business that brings in money from around the world instead of just recirculating money locally? Why does it want to misclassify small businesses? I’m sure I’ll just get a cookie-cutter answer that doesn’t address the question.

Read more of my articles on entrepreneurship and startup life.