Do you need a “bank book”?

How do you ask for money, request it, pursue it and actually obtain it?  We at FamilyTreeLoans.com are firm believers in some well known but not always understood statements:

First:

Time is Money;

Second:

Business or Commercial loans are made because of cash flow and collateral.

In business, time really is money.  Your speed to market is critical to gain an advantage on the entrepreneur down the street or the conglomerate around the world, each of which may have hatched a similar idea to fill a need in the economy. 

In these difficult times, many banks are simply not interested in or able to lend to businesses with no established cash flow evidence, and collateral that the bank deems inadequate.  Or if there is an offer to lend presented, it may have terms so onerous that the fees, costs, rates and personal guarantees erode the interest the entrepreneur may have in pursuing the deal. 

FamilyTreeLoans offers the following advice to those seeking money from family or friends:  Have a business plan, know all the questions that the potential lender will ask and be certain to have an answer for each question.

You need to share how the funds will be used, how much will be needed, what are the other sources of funds, who are the other investors, if any, how long will the money be needed and at what pace will it be paid back and many other questions will include what will or does the business do, how will it make money, what are the projected timing of the cash flows, are there competitors out there, is there any other debt and if this cash does not materialize, what collateral is there for the lender to be made whole?

Understand asking for money, or an investment by another person, either family, friend or stranger, is a process which generates questions and requires answers.  Think about all this and put in place a written plan to present to your prospective lender. Strongly consider the strength of the relationship as well.  Bankrupting the closeness of a friend or family member could be a result if the deal goes sideways. 

Thousands of us pursue peer to peer loans every year and when you add in private mortgages, the annual market is sixty five billion dollars. 

And if you are the lender, consider this excellent piece of advice about the stock market- You don’t put in any money you can’t just throw away!  Don’t ever lend more than you can afford to lose.  Sometimes saying “no” does the prospective borrower the biggest favor they have ever had, and saves the potential lender from a colossal headache.  

Contact FamilyTreeLoans.com with any further questions. 

We can help you Keep Your Money in Your Family!!!