BY AYO EMAKHIOMHE.
PERSONAL GUARANTEES.
You can raise funds by issuing personal guarantees tied to your personal net worth. What this means is that if the business you borrow on behalf of goes wrong, your personal assets can be relied upon to recover the loan.
To enter into such arrangement means that you have done your homework and are sure that all will be well with the deal and worst case scenario will be such that invested capital or at least loan capital is recoverable.
Also, this depends on the amount you intend to borrow, if the sum is above your personal worth, you are just being a clown. It is usually advisable to provide this as additional comfort to the lending institution.
Personal guarantees can be provided by another investor who believes in your business and wants to assist after considering the risks. Also, it can be provided by you and a group of individuals like your fellow directors or by the directors/other investors on behalf of your organisation.
It is usually advisable to engage in this transaction after the venture has kicked off and such sums is just needed to stabilize the organisation after it had run for a while. If you want to kick off the venture with personal guarantees, you have to be extremely careful for you might just be walking in the middle of a dried up forest with a flaming torch and if by any slightest chance the flames touch any of the dried figs the whole forest will be set ablaze with you in the middle.
You will require your lawyer and your lender conclude on agreeable terms and conditions for the guarantee to be drawn up.
To employ any of the methods outline above, you must have already done your research/feasibility study and prepared a business plan. If you have not, please prepare that first before deciding which method or combination of methods will best suit your business plan and needs. If you do not have a business plan, you are like a blind man that wants to run a marathon with lots of dangerous obstacle courses and your competitors are fully sighted while you have not the slightest idea of the track.
Also, always Endeavour to start small; Even if you have all the capital to hit the high market with your product or service. Always start with just a small test first. Do a Test run of your venture before slowly releasing funds to grow it to size. By doing this you will see any small problems that otherwise would have been hidden by large outlays and your mistakes and losses will be small. Also, backing out if necessary will be at minimal loss/damage.
BOOK TO READ
Because a dream and enterprise cannot grow more than the owner/leader, we will always encourage you read a book, listen to a CD or watch a DVD on an entrepreneurial topic to open your mind and expand your horizons.
We in our own way will always suggest at least one in our posts starting with this post.
The one we are recommending today is
START SMALL FINISH BIG
By Fred Deluca with John P. Hayes. Published by Warner books, New York (2000).
It is available at very good bookstands around.
The author can be reached at coinboxlimited@gmail.com or 2348023526682
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