Raising finance through friends and family
Are you looking for a quick way to get $5-10,000 for your business?
You have a small business or a great idea for one. You feel confident that this will fly and make
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money. You have a rudimentary business plan but no money. Maybe you have bad credit and you need financing. I have been there several times. I found that the easiest way to get financing for a small business is regular people. Like friends and acquaintances.
Why would regular people lend you money they have worked hard for? Mostly because you are you and they like you. NOT ( life insurance ) your business idea. So rule number one is to approach only people that you know like and respect you. Borrowing personal money is different from having to prove your self-worth. It's mostly based on personal liking and trust. People like to help people they like. And they will. Many people also feel if they don't lend you money you won't like them any more. This is a real test of friendship and it can backfire.
Secondary is the obvious desire to make money. Most people are willing to take some risk to get a return on their investment. Pending on the wealth of the person - a loan for $5-10,000 is not a huge thing. Any more than that - and you better have a great plan. If your ( mortgages ) business plan is highly capitalized - you need to re-think this approach.
Before you approach your targets - prepare a little bit. Try to establish if they are ABLE to lend you the amount you ask for. It's a complete waste of time to ask for $5,000 if the family is scraping bottom every month. Don't do it. But if you ( remortgages ) know that the family is strong financially - go for it.