CONGRATULATIONS!
You have embarked on an exciting journey! Congratulations and best wishes. I'm real excited for you
because you are now a member of a very special comunity! The Entrepreneurial comunity!
Buyer or Customer Loans?
Another loan gimmick you may want to consider is the buyer, or customer loan. I call it a gimmick
because it is a loan, but it is not really a loan.
What is a buyer loan?
This is not really a loan but an advance on the work or service to be done.
How does this work?
Your business is very attractive to some one and through word-of-mouth advertising, your
name was suggested for a job or service. unfortunately, this work involves having to buy
some expensive tool or acquiring expensive supplies or just having to buy a larger than
usual amount of product with which to complete the sale.
How do you get around this?
The Lending Process?
The
way you approach this is by having your buyer, either buy the product at cost - not a good
thing as you will have a hard time justifying a good markup, or better, having the buyer
advance you a portion of the total cost of the order.
This is actually not as uncommon as you may think. Large contractors do this often by
requesting the buyer put half of the contract, either in escrow, or paid outright. It
doesn't have to be half either. It can be any amount you decide will help you get through
the job.
What's in it for the buyer?
Here
your character is going to be the selling factor. This is why it is important to have a very
clean character if you are going to be trusted in the marketplace. This is another reason
why it is very important, that while you are employed, that you build good relationships, and
a solid network of contacts, so that when the time comes, you have the ability to bring up
those references if the need arises.
What's in it for you?
You
gain because you are "borrowing" the buyer's capital to start your business. You also gain
because you will be able to prove your "character" in the marketplace. Your buyer will gain
as well as they will realize they can trust you with their business. Everyone gains! And, you
didn't have to borrow a cent.
You can duplicate this with any buyer.
Once
you have established your reputation in the marketplace, you won't necessarily have this problem
again, but it will be good reference for any other buyers, as they start working with you
and realize the trust they can put in you and your product or service.
Caveat or Watch out for this!
Occasionally
you may come across a buyer who will balk at advancing you any money. Watch out for these. If
they are not willing to trust you, are you willing to do the work or service for them? This
thing works both ways. If the buyer knows you and is not willing to meet you at some point,
then you may want to keep looking for other options. On the other hand, you may want to pass
on this option if you are more interested in keeping the customer and you feel that this
approach may get them to walk. It's a fine line to thread but you will eventually develop
the ability to judge other's character just as much as they judge yours.
If you would like more information on this or any other items here send me an email
loans@start-business-loans.comwith your questions
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