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    2 Replies Latest reply on Feb 6, 2009 9:02 AM by bmt2008

    sba 7(a) loan or angel investor?

    grywyken Newbie
      I went to the sba.gov website and their course said to check into angel investors before applying for a loan. Are angel investors a better option? How do I find one?

      Thanks,

      Grywyken
        • Re: sba 7(a) loan or angel investor?
          gary_banker Newbie
          My name is Gary and I am a mortgage broker. Give me a call and we can go over all your options. My phone number is 412-882-3270

          Thank
          Gary
          • Re: sba 7(a) loan or angel investor?
            bmt2008 Adventurer
            It all depends on what you need and what it will costs. Angel investors can be a great avenue for growing businesses. Not only can they provide money but usually fund businesses in industries that they are fimilar with - meaning they can open many doors or help solve many problems. But, they come with a cost - which is an equity stake in your business and a seat on your board. This means they have some comtrol over what you want to do and where you take the company. Also, there are very few that are funding new deals these days - especially with economy where it is at.

            A loan (even SBA loans) don't require you to give up equity. But, you may have to pledge all the assets of your business as collateral or maybe even personal assets. Thus, miss a payment and your world could turn upside down. Loans are also very hard to quailify for these days and can be expensive as well with high interest rates, high funding fees, and time in complying with covenants.

            Your choice should come down too what you actually need and what you are will to pay to get it. - But, choices usually come down to what you can get. You may not find a Angel - or - you might not quailfy for a loan.

            Another option is to hit up your friends and family or network in your community and find local investors (not so much Angels) just wealthy people who may be willing to fund. Could set this up as a loan (convertable debt) or provide equity to these investors. I recently just helped a local company raise $1.5 Million from people within the community (most were non-accredited investors). Took 14 people to raise the funds - but they required less ownership than a Angel or Angel group and don't try to run the daily operations - they do provide good advice and other resources.

            Just some thoughts.