Starting a business is the dream of many Americans, the risks are high but the rewards can be great.
Money is always a necessary evil for anyone when they take that deep breath and make the decision to live the American Dream and start a business.
Starting a business almost always requires a substantial sum of money from the person attempting to get a business off the ground – money that many would-be business owners just don’t have. Sources such as family and friends can lead to disappointment due the their lack of excitement in the new business venture.
Potential business owners then often turn to “their” bank thinking that it can’t wait to jump in and fund their new business venture. Many future business owners might have poor or even bad credit when deciding to start their new business ventures – credit that their bank just might not find inviting when reviewing the loan application for the new business.
Well unfortunately, traditional lenders do have very stringent lending standards when lending to a new business, primarily due to the fact that so many businesses fail in the first several years and many lenders in the past have gone down with the ship with the business owner when the business failed. So naturally, lenders are very careful in what business they lend on and who they lend to.
Potential business owners can look to lending sources that don’t require the same stringent lending standards that the big banks do when lending money, lenders that will lend to business owners with poor to bad credit or have had a business failure in the past.
Equity lenders will lend the potential business owner the necessary money to get the business up and running based on the equity in the real estate they already own. Business owners can use their personal residences, rental properties or other investment properties to obtain the money needed to get things going.
The interest rates on equity loans are higher than traditional banks but when the money is used wisely for a business that has a good product or service that is in demand then the cost of money would be considered a wise business choice if it leads to a successful business and profits to the business owner. Later on, when the business is humming along and the need to expand the business arises then an equity loan can once again be used to finance the business expansion and thus provide the business owner additional profit.
Equity = Business Profit
Now go out and get that business going!!!!