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    5 Replies Latest reply on Apr 25, 2010 3:07 PM by phanio

    Need an investor

    burk04 Newbie
      How does it work when you have an investor? Someone who wants to back you business financially? Does this mean you are still sole owner, and they're pretty much just like a bank that you make payments to monthly. Every business advise tip out there says look toward friends, family ect. But they are all in the same position we all are, I don't have any rich relatives, sorry we weren't all born with a silver spoon in our mouths.
      Then the banks, SBA, ECT none of them will finance more then 51%, ok fine, but how do I come up with 49% when I have plenty in my 401k, but unless I quite or have a hardship I can't get it out. Nither one of those would look good to a bank for lending. I own a 250,000 home, yet I don't have enough equity. This goes on and on, I think you get the picture. Really? and our goverment, don't get me started.

      I have a great idea, I have plenty of supportive contacts, I have a 100% complete business plan. I need 150,000.00 to start-up, I currenty have 35,000 cash and credit. I need at least 50,000 from and investor, to probably be elgible for the rest in financing, or 115,000 from and investor would great, but I'm a realist and know..... on what planet is that going to happen.

      I'm not going to get discourage, I have never failed at giving 150%, and I'm not going to start now.
        • Re: Need an investor
          phanio Pioneer
          It is my understanding that under the new SBA guidelines, they will guarantee upwards of 95% - meaning you only need 5% down in equity. If you bank is telling you 51% - that is your bank's policy and you might think about talking to other banks.

          $50,000 from an investor is going to be if you are seeking professional investors. But, you can always get out in your own community and find individuals there that will invest in your business - you just have to get out and network. Look for doctors, lawyers, cpas, other business owners - this might be your only way of seeking investors before you have track record with your idea.

          There are also other (other than banks) lenders that might be able to help you - like micro credit, peer-to-peer or even personal and business loan providers - we list many of these resources and infromation about them on our website. You might have to put a coupe of them together - but, you will get what you need.

          You could also try to get several business or personal credit cards for the amount you seek. If can use these for your business purposes and if done properly they act just like a business line of credit. You just have to manage them as you would any short term debt. You might find some resources here -

          Best of luck - don't give up - you never know what is around the next corner - just work smarter not harder.
            • Re: Need an investor
              burk04 Newbie
              Thanks for your time and information. My adventure is looking promising, and I won't give up, it's not in my nature. But I do have a question since you seem pretty resourceful, have you ever experienced scams on this site? People saying they are someone their not, haven't wrong intentions. I replied so someone wanting more information, someone who said they might could help, and that was a week ago, with no reply. Do people on here just sit around waiting for somone elses idea?

              Just wondering.
                • Re: Need an investor
                  wilfin Adventurer
                  "have you ever experienced scams on this site?"

                  As with anywhere on the internet there are unfortunately plenty of scams. There are definitely sharks in the water
                  on this site as with others. You will get individuals wanting to charge upfront money for "DD", sometimes anywhere
                  from $1500,$2500, and up.You may receive a LOI but that's about it. You may get companies wanting you to
                  establish "business credit" and they charge you up front and monthly. There are legit investors that are looking
                  for viable opportunities. I don't know the size of your hometown, but I would start there looking for investors you
                  can speak with face to face instead of someone over the computer and a voice on the phone. Again there are
                  legitimate firms and you must do your own due diligence.
                  • Re: Need an investor
                    phanio Pioneer
                    Burk04 - there are scams everywhere. It is good that you are cautious. But, you also have to take action. No matter who you talk to or what great deal you think you are getting - do your homework - find others who have successfully and unsuccessfully worked with that company, check out the BBB - do a review search online and most important read the fine print!

                    If it sounds to good to be true it is! And, if you are asked to pay up front - make sure there is some guarantee that you will either get your money back should the company not help you or have those funds applied to your request shoud the actually help you.

                    Business Money Today
                • Re: Need an investor
                  rbrk_n Newbie

                  The fact that you have your business plan is the most important thing in your favor. This is all good advice, except for the part about credit cards. Use them only as a last resort and make sure they are business credit cards and not personal credit cards. SBA loans and many other business loans can't be used to refinance personal credit even if the funds were used for your business. If your business is successful, the time will come when you qualify for financing. Make sure your eventual loans can refinance your debt.