Borrowing Money
Hi.
How's your day going?
We'll be talking about borrowing money, well I am at least you just sit there, get cozy, have a hot chocolate or a cold chocolate, whichever floats your chocolate boat. Listen to my written words and smile, gain a bit of insight, visually correct my spelling and just enjoy yourself.
No Interest
If you're going to borrow money from close ones without paying interest it'd benefit everyone if you have the right mindset for it.
I've seen two thoughts.
1. You borrow money and think of paying them back when it suits you.
2. You don't tend to borrow money but if you do you pay it back as soon as possible thinking - I might need to borrow money later and want to leave a great impression and will work unhealthy amounts to pay back my debt sooner than I said I would.
Yes Interest
Bit more businessey here. Lets take a lookie loo at various ways to borrow money. There's different avenues to take depending on where you are and your destination. I'll only cover a few. You don't have to borrow all the money you need from one source, you could always get a bit here and the rest there or however you want to cut the ice cream cake. Time for a quote.
" Vessels large may venture more, But little boats should keep near shore. "
- Benjamin Franklin
Bank Business Loan- If you're looking for a business loan, you'll need to be in business for at least two years. Smallest business loan they'll make is about 50k. Reasoning is they make very little with small loan amounts. The bigger the loan the cheaper the percentage, ( down to a certain point obviously ) not sure on max amount. Percentage is about 2.5-5% according to google but when I asked my friend that actually got one it was 8%. I've heard out the options a bit but couple businesses in and I've never needed it. use for this is if you need general cash flow. If you're curiosity has sparked and want more info ( whatever man I tried to inform you best I could, don't hate ) then a local banker person would love to inform you of the options they offer and if you're in the Sacramento area Max T is a banker/financial advisor extraordinaire and still upset about me breaking his coffee grinder so help an Eddie out. Email me for his info unless you're a North Korean evil spy then stay away.
Equipment Financing - The growth hormone. This one sure is useful. Percentages are lower cause collateral and some are 0%. Mix this puppy in cause you can depreciate the asset and keep some money in the bank. Profitable assets should be multiplied, if you've got room for this then do it. You should be hosting the auction not bidding - get options from different financiers. Do be careful with starting out with this in the beginning of your business. Weight very carefully a new asset vs. getting by with an older one.
SBA - Small business assassination is more like it ( thanks auto correct for that joke ). Rates are high, when I inquired it was about 8% or more, maybe if I asked for more money it'd be lower? Prob but IDK they're a scrub in my experience and a scrub is a guy that can't get no love from me. Hangin' out the passenger side of his best friend's ride. Trying to finance at me. Damn now I got TLC stuck in my brain, eh the reference was worth it. Same reason to use them as a bank business loan.
Investor - Sensitive but flexible. I've been both investor and investee, mostly in infant businesses. Since this article is about borrowing, hints are on the way to do so. Two ways of approach.
When investee is coming to investor :
What I've liked is when the the person asking you for money is respectful and understands that it's your money and that you've worked hard to get it. Investor has money because he/she values money and doesn't part with it easily. Be very understanding of this - it's not so much about you and your dream or genius ( or not genius ) business idea / plan as much as understanding the investor. If they have been looking for an opportunity for a while then they'll be more willing to tango but if they have just invested or lost a lot of their money then you'll have to pull for it. You should be able to feel this out.
When investor is coming to investee :
A whole lot easier for the investee, that's for sure. There's still a clarity needed to what both sides are getting into but most of the time is spent just aligning the conditions.
Percentages, loan duration, amounts all vary - hence the flexibility. Investor borrowing is too situational for me to add anything else but if you have any questions I'll be glad to answer them if you address me Reverend Revenue.
Credit Cards - Short term solution. Should be used for purchasing ( cause points duh ) but if it makes you spendy then stop.
This was suppose to be a short article. Then I wanted it to be a long one. It has resulted somewhere in the middle.
Reverend Revenue out.