TEN EASY STEPS TO SECURE FINANCING
by James R. Chisholm, CFO, Orion Products
In our sales material we state YOU CAN GET THE MONEY TO INVEST! By following this step-by-step guide you can find the financing, and the rewards of being an Olde World Tile Producer.
1. SECURE FINANCING FROM MULTIPLE SOURCES
First and foremost, it is not necessary to obtain all the required funds from one source. It may be more practical for you to obtain a portion from several of the sources described herein.
2. REVIEW YOUR QUICK ASSETS
For instance, a CD which has months to maturity can be used as collateral for a low-interest loan, which will be paid off at maturity.
3. STOCKS AND BONDS, ANNUITIES & LIFE INSURANCE POLICIES
-- Are excellent collateral for a loan at a reasonable rate of interest. Most sources of secured financing will lend you 50% of the listed market value of the stock or bond of a publicly traded company. Insurance companies will lend you 70% on the cash value of your policy.
4. CREDIT UNIONS
-- Are a good source of financing, especially if you have worked there for several years.
5. REAL ESTATE -- YOUR BEST SOURCE OF COLLATERAL
If you have sufficient equity in your home or other real estate, this is a good time, because of low interest rates, to refinance your first mortgage for an amount to include your investment needs. If refinancing is too costly, consider a second mortgage. Even a very small level of equity in a home may be enough for many lenders to provide additional financing.
RAW LAND is an excellent source of collateral for loans. It is usually financed at about 50% of its market value. Often friends and relatives would rather borrow against raw land they own and then have you sign a note for the money they're lending you.
6. USE CREDIT CARDS
Use your Visa, Master Card, or American Express to finance all or part of your investment. The use of credit cards is a short-term step to speed up the process of getting a business up and running, at which time these cards can be paid off.
7. EQUIPMENT & OTHER SOURCES OF COLLATERAL
An excellent source of collateral is equipment you'll be using in the business. Your willingness to offer your equipment as collateral could make the difference in a friend or relative's willingness to lend you money. It is a sign of your commitment to the project.
8. NON-COLLATERALIZED LOANS
A signature loan, with some or no collateral, is possible, if you have a good credit rating and stable employment income, especially if husband and wife are both working.
9. ALTERNATE FINANCING TECHNIQUES-PERSONAL LOANS-PARTNERSHIPS
As a new entrepreneur, this information could prove invaluable in obtaining financing for your new business. To secure the remainder of the investment needed, please read carefully the next two sections of this manual entitled ALTERNATIVE FINANCING TECHNIQUES and FINANCING YOUR BUSINESS. Additionally, you should review thoroughly the GLOSSARY OF AGREEMENTS & FORMS.
10. SUGGESTED READING
We urge you to read a new book, entitled GUERRILLA FINANCING, by Bruce Blechman and Jay Conrad Levinson. It is a "step-by-step method to get the money you need to finance any type of business anywhere in the country, no matter what the circumstances. The techniques in this book can help you solve any financing problem".
The contents include:
- The Five Steps to Finance Any Business
- How to Find the Appropriate Source of Funds
- All About Equipment Financing
- All About Real Estate Financing
- All About Government Financing
- All About Informal Venture Capital
- 101 Guerilla Financing Techniques
- How to Write an Effective Business Plan
- Get an Appointment to Present Your Plan
- How to Negotiate the Best Terms
THE FINANCING STEPS DESCRIBED HERE ARE OFTEN USED BY FRIENDS, RELATIVES, AND ASSOCIATES TO SECURE FUNDS, WHICH ARE IN TURN LOANED TO YOU, THE OLDE WORLD TILE PRODUCER.
*from ALTERNATE FINANCING TECHNIQUES TO CAPITALIZE ANY SMALL BUSINESS by Theodore Greenspan Copyright � 1991 by Theodore Greenspan
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