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What you should know about Investors
I am not here to down play investors in any way but only to let you be aware of what investors expectancy is when dealing through them. If you don't know or haven't presented yourself to an investor, here I'd like to layout banks vs. investors.
Commercial Banks
If you have a bank account and ever applied for a loan through them, they are no different as applying for a loan for a business. You go through the same procedure. After you finish the process you have to wait for the most anticipated moment...the RESULTS!! Yay or Nay. As I mentioned on the link Getting Started, your credit is the focal point in every decision any financial instution makes. If you don't have excellent credit then it will be very difficult to get any type of loan. I have to be brutally honest with you. If your credit is poor banks will not give you the time of day. There may be a better chance to get a loan even with poor credit but you will have to consider a partner or family member who has excellent credit co-sign with you.
If you have a bank account and ever applied for a loan through them, they are no different as applying for a loan for a business. You go through the same procedure. After you finish the process you have to wait for the most anticipated moment...the RESULTS!! Yay or Nay. As I mentioned on the link Getting Started, your credit is the focal point in every decision any financial instution makes. If you don't have excellent credit then it will be very difficult to get any type of loan. I have to be brutally honest with you. If your credit is poor banks will not give you the time of day. There may be a better chance to get a loan even with poor credit but you will have to consider a partner or family member who has excellent credit co-sign with you.
Investors
Unlike commercial banks who focuses primarily on your credit to make their decision, investors focuses on how well your business will profit and how fast you will pay them back. With a well written business plan and colleagues you have with experience to present your business with mass potential and what you bring to the table is what investors look at. Will your business proposal bring in 30 times the amount you asked for to start your business? Do you have a management team who has experience in the business type you are trying to start? I am not trying to discourage you in any way into looking for investors to help fund your business but to better prepare you in what to expect when approaching one. Also to look at what type of business you are looking into opening and see the type of profit you will generate from it. For example, if you plan on opening a coffee shop for $40,000, will your business profit $1.2 million in 2-3 years? That is something to look into and to do plenty of research.
Unlike commercial banks who focuses primarily on your credit to make their decision, investors focuses on how well your business will profit and how fast you will pay them back. With a well written business plan and colleagues you have with experience to present your business with mass potential and what you bring to the table is what investors look at. Will your business proposal bring in 30 times the amount you asked for to start your business? Do you have a management team who has experience in the business type you are trying to start? I am not trying to discourage you in any way into looking for investors to help fund your business but to better prepare you in what to expect when approaching one. Also to look at what type of business you are looking into opening and see the type of profit you will generate from it. For example, if you plan on opening a coffee shop for $40,000, will your business profit $1.2 million in 2-3 years? That is something to look into and to do plenty of research.
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