Yes, and thay are NO DIFFERENT! IF YOU CAN'T SECURE A LOAN THROUGH NORMAL LENDERS, THEY WILL NOT HELP EITHER!!
My company was approached and we requested a 100,000 loan. Initially, I told them that we had been approached by many other companies that called themselves "angel" investors but were not. Some would lend us money if there were machinery involved, i.e. the machinery was part of the value of the loan. Some wanted to take payments from a loan from our credit card sales, of which we have none because all our customers are overseas.
I told them we had been lured in by these supposed angels only to find we were just applying for a loan. The National Angel Investor Forum is no different. We were having trouble securing financing since we have no assets. We are a wholesale company. The only assets we have are our office furniture and computers so traditional lenders will not lend.
After paying them $250 to "process our request," they came back to us with an e-mail (below) that basically told us thank you for wasting a couple hundred bucks, go screw yourself! If we could get a $70,000 loan from the SBA, we certainly wouldn't be talking to them.
"Thank you for the email. We will do our best to answer all of your questions and do everything we can to help:
It is our intention to help you succeed in your funding request; however, due to certain fund covenants we cannot provide 100% of your funding request. There is a significant difference between being turned down and securing a portion of your funding request. Having one Investor group consider making an investment into your company is a vote of confidence to other Investors and Lenders who may want to participate. We recommend you seek an SBA (Small Business Administration) Approved Lender as a possible option. Also, network throughout your local community for other Private Investors, often listed in the Business Classified Section of your local Newspaper, and find strategic Industry partners.
Access to the proposed funding percentage by the Investment Committee is contingent upon securing funding from the additional Co-Investor/Lender.
Dick, based on your presentation and given the nature of your business, which were the considerations in the Investment Committee's decision, we feel there is a high probability of success and hopeful that other Investors and Lenders would agree to participate as well. Keep us informed on your progress in securing additional Co-Investors and/or Lenders.
With warm regards,
The Investment Committee
The NPILF Forum
THIS IS NOT A FORMAL COMMITMENT TO PROVIDE FUNDING! This information is not meant to be, nor should it be construed as, an attempt to define all the terms and conditions pertaining to a potential funding arrangement, which terms and conditions would be contained in final funding agreements. Final approval is subject to due diligence by our Investors/Lenders/Legal Counsel."
