Business Loans From Family & Friends

Business Loans From Family & Friends

How to Ask, Make It Legal & Make It Work

Book - 2009
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Skipping the bank is an option: learn how to ask for money from trusted family and friends, keep it legal, and keep everybody happy
About 65% of domestic banks report that they have tightened their lending standards for commercial and industrial loans to small firms (CNN, September 18, 2008).
Many entrepreneurs at the early and often untested stages of launching or expanding a small business are having difficulty qualifying for traditional bank loans or venture capital in the down economy, particularly those with poor credit ratings. Business Loans From Family & Friends opens a window on an area of lending that accounts for more than 50% of all start-up business investment dollars, and, additionally, is a great resource for those who have identified their lending friends or family, but want to know how to structure the deal so that everyone understands it and no one gets hurt.
Business Loans From Family & Friends offers practical tips on how to approach and ask professionally, along with clear guidance on how to protect lenders from risk. It provides complete instructions for drawing up the paperwork to formalize the loan or investment, while the CD-ROM contains handy forms, including:
loan proposal letter
letters of intent
personal financial statement
promissory note, and more.
When I first started out in the record business, and was struggling to get by, my Aunt Joyce was kind enough to give me a small loan.
In my case, as maybe in yours, my aunt had heard through the family grapevine that I needed a loan, and when I came knocking on her front door she was prepared with her offer. I was incredibly grateful, took it very seriously, and paid her back - with generous interest - as soon as I was able.
That loan kept the Virgin Records recording studio afloat. It gave me the time and resources I needed to make my business a success. And many years, and many business ventures later, I still have her to thank.
Though my ventures and my lenders are considerably bigger now, I still witness the critical role that relatives, friends and associates play in the founding and growth of young businesses. And it makes so much sense, really. Friendly lenders tend to be a fast, flexible and affordable source of capital - as long as they can trust you are good for the funds.
If you can't get what you need close to home, and if banks have slammed their doors on you, get out there and keep searching. Even in recessionary times, a resourceful entrepreneur will find sources of capital from within their network or friends' networks. Be patient. Be persistent. Be resilient.
I'll say now that when it comes to growing a business I truly believe there are no rules to follow. What works once may never work again. You learn to walk by doing, and falling over, and it's because you fall over that you learn to save yourself from falling over. Raising money to fund a growing company is the same.
This is the only book I've ever seen that rolls up its sleeves to help entrepreneurs raise business capital from people they know. And I'm delighted to have a part in it to help you get started. I truly believe that success is when you have created something you can really be proud of. So, on with it
Richard Branson
Publisher: Berkeley, Calif. : Nolo, 2009.
Edition: 1st ed.
ISBN: 9781413310788
1413310788
Branch Call Number: 658.15 Adva
Characteristics: 287 p. : ill. ; 23 cm. + 1 CD-ROM (4 3/4 in.)

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