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ker. The more you deal with money prof essionals,
too, the sharper you'll become - and consequently, the more money
you will make. Money professionals know what types of loans are
possible or likely from each of their different funding sources;
thus, they'll present only those having the best chances of success.
You will quickly become well versed in the current lending and
investment trends, and acquainted with the lending rates and
requirements of your loan sources. As you review, assist and put
together each of the request-for-money propo sals, your knowledge
will improve your ability to package specific requests, and to
"sell" a loan proposal. Just keep in mind that every time a loan is
approved, or when one of your sources decides to invest in a
client's business, you'll be taking a fin ancial cut right off the
top.
Right here I'd like to assure that you don't have to be either a
financial genius or a super sales person. All you really have to
know is how to put together a proposal properly, and acquire a list
of sources interested in lending money or investing in a venture to
obtain a profit.
You'll find that most of the borrowers you sign to assist in
finding money for are unaware that they will have very little if
anything to say about the terms of the loan that may be finally
granted. You'll find that most of them are already convinced th at
they have the ultimate idea for a business that will make everyone
involved rich. Almost all of them are trying to get started with
little or no money of their own, and they'll think that whatever the
prevailing interest rate, it's to o much.
Your first chore will be to screen these people. Explain the facts
of life to them, and don't waste your time with them if you have the
feeling they'll reject or refuse to accept a loan you line up for
them because of interest rates. If they've been to most of the
regular loan sources in your area, they'll know that when they want
or need money, it's the lender who dictates the terms of the loan. A
prospective borrower soon learns the prime rate that is published is
almost never used. Actually, the prevailing prime rate plus two
percent is generally a good rate of interest for most small
businesses. In most cases, such loans have to be well secured with
collateral not associated with the b usiness.
Most of your would-be borrowers will not qualify for the prime plus
two percent rate. Business experience, coupled with the type of
business involved, will almost always put them in the "high risk"
loan category. After you have your retainer fee, you h ave to
educate your would-be borrowers in this regard. For those who cannot
face the facts of life about interest rates, you have to just
forget.
Something else you'll have to convince your clients of: If he says
he'll give up a share of his business in exchange for the use of
your investor's money, he'll have to give up a very large share.
Most small business investment corporations or private i nvestors
will want at least 25 percent, and more often than not, up to 49
percent. In some cases, where a half million dollars or more is
provided by the investor, he may (reasonably) ask for as much as 70
to 80 percent. Thus it's absolutely essential that you learn to
qualify your would-be borrower before you get too deeply involved or
waste too much of your time.
For those who can't or don'
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