Where can we get money …
is an often asked question by many people.The answer varies depending on who you are, what you want the money for, how much money you want, and what you are prepared to do or offer in exchange for the money.
If the amount of money you want is only small the best place to look for it is to ask friends and family. However there may be concerns as to what you intend to do with the money and how and when you intend to pay back the money if it is given to you as a loan.
If the amount is quite large then asking family and friends is not advisable. You should instead look at asking a bank to loan you the money.
Banks are strange animals when it comes to lending people money. Par for the course is they will not lend to people who need money – as the bank is concerned that you might not be able to repay your loan. Instead banks prefer to lend to people who don’t really need the money. The way that works is as follows: Banks generally want some form of collateral guarantee, such as a mortgage or a floating charge over a company’s assets which provides security to the bank for the loan. If a person or a company has assets then the bank is often prepared to say to the prospective borrower – ” no need to sell your assets in order to get money, you can use the bank’s money instead. ”
However if you have no assets, no real estate or other assets to pledge against a loan from the bank you have little chance of obtaining money from a bank. If you own a business that has been going for some time, providing it is profitable it should have some value. Therefore the business being an asset you own the bank may be persuaded to lend you money against your business.
If you own a large profitable company you would rarely ask where can we get money a) because a profitable business generates revenue and so has plenty of money coming in regularly, and b) people will gladly offer you money for a share in your business.
The next post will deal with how to start up your own business and then in more depth with how we can get money by raising capital by issuing shares, debentures and convertible notes.