HOW TO MAKE BIG MONEY
WITH YOUR OWN
BUSINESS FINANCING SERVICE
If you've been wanting to get into something that doesn't require all of your time, yet
could give you an income of $100,000 per year or more, a Business Financing Service is
definitely something you should consider. This is the type of business that requires no
special education or even a storefront or office. It won't take too much of your time, and
yet it offers more prestige, power, and earning potential than just about any business
opportunity available to the ordinary working person.
The average net profit of people in this kind of business is $75,000 per year, before
taxes. Most begin on a parttime basis, operating out of their homes. Within a short
period, varying with expenditure of time and effort, many have luxurious professional
office suites with clients from all over the country calling and asking for help. Perhaps
best of all, this is a business you can operate with nothing more than a parttime
secretary/bookkeeper, a telephone, and business cards.
There are many facets of this kind of business that involve bringing lenders and
borrowers together for venture capital, operating capital, and expansion capital . . . not
to mention mortgages of all kinds. Almost every building in the country, whether a home,
office building, factory, or apartment complex has a mortgage on it, and somebody is
making some really big commissions bringing together the people who want to borrow the
money and those who want to lend.
A business financing or money brokerage business is the ideal sideline business for
real estate brokers, business sales persons, investment brokers, attorneys, accountants,
and retirees from almost any occupation. It is definitely one of the truly
recessionproof businesses that actually seem to flourish in times of tight money.
YOUR POTENTIAL MARKET
Each year more than ten million business loan applications are filed with the banks in
this country. It is not uncommon for these banks to be working on more than 250,000
business loans each week in amounts ranging from $25,000 to well over a million dollars.
Approximately 65 percent of the loans actually granted by the banks are shortterm
commercial loans, while only about 25 percent are for longer terms, and less than ten
percent are granted for construction projects.
It is therefore obvious that the banks in this country are neither speedy nor generous
in giving loans to the beginning or small business entrepreneur. Such business people
usually ask for loans of longer duration than the banks are willing to grant. It is easy
to see that in a fledgling business smaller installment payments will reduce pressure on
the borrower and allow him to put more of the profits back into the business. In most case
these small business owners need much more than the banks are willing to lend without all
kinds of guaranteed collateral. And that, of course, is the reason why people who need
money for their businesses turn to business financing consultants, thus providing you with
the opportunity for success in this field.
You'll find that many beginning or small business persons are always on the lookout for
professional business financing services. They always seems to need more money than is
available, and just never seem to get quite the help or satisfaction sought from the
banks. The pressing need for more capital is not something that plagues only the beginning
or new business. It is an ongoing need in almost every growing business. In fact, the need
for a continuous input of new money is a necessary part of the growth cycle of every
business. Generally, the "little guy" just doesn't have the extra cash from last
year. He does not have the money it takes to set up a stock market program, nor does he
possess the time or desire to devote to an attempt to sell his friends an investment
program in his business.
Sometimes these small business people will talk with their accountants, lawyers, or
stockbrokers and ask them to help in finding people with money to invest. Most of these
professionals are in touch with clients who have money they are willing to invest in
growing businesses or in people with "surefire" moneymaking ideas.
Whether these professional people do or do not have special clients with money to
invest in special deals is of no consequence. The important thing is that these people are
always being asked by someone if they know of a source of money, or if they know of
someone who can locate an investor for them. With this in mind, once you're set up in
business it will behoove you to contact these people the accountants, lawyers, and
stockbrokers in your area to get to know as many of them as you can, and to
leave your business card with them so that they will be aware of your services.
THE SERVICES YOU WILL PROVIDE
Generally speaking, the money broker or person who operates a business financing
service will work with his or her clients in putting the loan application package together
in such a way that it will receive favorable consideration by the lender. You'll have the
names, addresses, and telephone numbers of lenders from all over the world; people and
firms interested in investing various amounts of capital in all kinds of different
business ideas. When you have a complete loan application ready for presentation, select
the lenders or firms interested in that kind of business or investment. Either send or
present the loan application package to them. One thing is most important: When you
present a loan application package to a lender be sure to have the date and time of your
presentation certified by a notary public. When you send a loan application to a lender
make certain to certify the mailing of your package with the Post Office.
Once you "open your doors" for business, there'll be no shortage of people
coming to you for their money needs. The problem will be selecting just the requests that
you know stand a reasonable chance of approval. Everybody wants and needs money. Once you
announce that you can get loans for people who need them you will be overwhelmed with
requests. It will be up to you to utilize your time, expertise, and effort according to
the greatest profit potential.
SETTING UP YOUR BUSINESS
You can begin your business from the kitchen table in your home if necessary. You'll
need a telephone and, unless you have someone to act as a secretary, you should employ a
telephone answering service. You can probably get by with a telephone answering machine,
but because you're dealing with money it's important that you project an image of success
(and a telephone answering machine quickly identifies you as being a one person
operation).
In addition to a telephone you will also need business cards. These, of course, should
be of a superior quality (not a very large expenditure). The card should simply state your
name, firm, and title Business Financial Services. You may want to include a
slogan or motto underneath your title, such as "Money for Every Need." List your
phone number in the upper lefthand corner with your name and firm centered in the
middle. Assuming you are working out of your home, you will certainly want to make new
cards showing your business address once you have moved into an office.
You will also want to have a calculator and typewriter (or a computer and
letterquality printer to do the work of both), and at least a small file cabinet as
you set up your business. But just as people got along before without these amenities you
can make do until you can afford this equipment.
As stated earlier, you can start this type of business from the comfort of your own
home or apartment and do very well. However, just as soon as you possibly can, it will be
to your benefit to set up an office with access to the general public. Your success and
gross income will definitely benefit.
You should set up your operation in a prestige location within or fairly close to the
business and financial district of your area. This will impress your clients, and by
locating in or near your local loan sources you'll quickly come to know the important
people on a first name basis. Perhaps the best idea would be to sublet space in a suite of
offices used by an insurance company, commercial bank, accounting firm, or a group of
lawyers. An arrangement can often be made for their receptionist to answer your phone
calls and receive your clients. With a little bit of finesse, you might even be able to
have one of their secretaries handle your typing and filing. Another location to try is a
"business incubator," a single suite of offices serving as the location for
several beginning businesses. For a lower monthly cost than operating your own private
office with a secretary, the business incubator will provide you with a nice furnished
office in a prime location with private telephone lines, a shared receptionist /
secretary, and the necessary office machines such as computer, copier, and Fax machine. As
a beginning business person, this may be the best and most economical means by which you
can project that professional image so vital to your customer relations.
Your office should be neat and functional, but still impressive a large
desk, comfortable chair, a credenza, and perhaps a fourdrawer file cabinet. The image
you project is of great importance, and being located in a well known office building or
complex shared with big name firms will definitely be to your advantage in gaining
clients. You should try to cover the walls of your office with your certificates of
awards, extracurricular courses completed and association memberships. Documents of
affiliation with civic groups or even reproductions of national writeups should be
framed and displayed on your office walls.
Don't forget: when planning and furnishing your office you should also include at least
one, and preferably two visitor's chairs. A small sofa would be desirable, but really
isn't necessary until you're really firmly established. You must project an image of
affluence and professionalism to anyone entering your office.
The ideal business structure is to have a twoperson team someone on the
outside doing the selling, and someone on the inside handling all the processing. If you
have the marketing skills and enjoy selling, you might look for a sharp and impressive
appearing person to handle the processing for you. Or, if you've got the processing
knowhow, you might keep your eyes open for a professional appearing person who could
be your "outside arm" and do most of the selling for you. Except for the actual
preparation and selling of the loan packages most of the inside work can be handled by
clerical personnel.
As your company grows, however, you'll find it in your best interest to have a
fulltime secretary. Train him or her to field incoming telephone calls, take care of
filing, and do your typing or word processing for you. Typical loan proposals usually
require approximately eight hours of preparation.
ADVERTISING
Once you are organized in a work area with the basics for operating your business, the
next move will be to get the word out that you're ready to offer your services to both
people needing money and to people who are willing to invest. This means advertising,
visiting, and making contact in some way with both potential borrowers and lenders. Don't
forget often those who do not go with you for one reason or another may supply
with you with fine referrals.
We recommend that you look at money brokerage ads in the national publications before
designing your advertisement. Clip out some of those you especially like and incorporate
their best features into your ad. Consider hiring a freelance graphic artist to prepare a
logo for your company to place in the ad and on your business cards. Your local typesetter
can set up the final layout for you, using the ideas you've collected from other
advertisements.
In addition to your local newspapers, business publications and nationally distributed
papers, newsletters, and magazines, it will be to your advantage to run an advertisement
in the yellow pages of your telephone book and in area business directories. Remember: it
costs money to make money. Any money spent in advertising will come back to you in the
form of inquiries concerning your services. It is from the inquiries your advertising
generates that you will reap your profits.
Check into renting a billboard along a major commuter highway in your area. This will
attract business people who travel daily along that route and no doubt spend time planning
new business they want to begin.
Regardless of how you get started, and even after you've moved into a suite of plush
offices, you'll have to advertise to keep generating new business. Besides running regular
advertising in your local newspapers you should also advertise in the financial
publications as often as you can afford. Once you get your business rolling, you should
expand your advertising coverage to include such national publications as The Wall Street
Journal, Financial Times, and the business opportunity publications.
Besides "regular" advertising you should send out direct mail letters letting
people know that you can help them with their money problems. Some money brokers have a
combination letterdisplay ad made up and printed on the back of postcards. This is
quite a bit less expensive than sending out letters, and could possibly downgrade your
image somewhat. On the other hand, those moneybrokers using postcards say
they're very effective because the recipients are more likely to save a postcard than a
letter.
In general, your direct mail campaign might work as follows: You mail out your letters
or postcards to the real estate brokers and small businesses in your area. You can also
send out letters in search of lenders or private investors. All of these efforts are
helpful in establishing and building your business. A couple of days later follow up with
a phone call to these people. Identify yourself, ask if the card or letter has been
received, and then ask how things are going; if you can be of any help to them. Finally,
ask them to keep you in mind and to be sure to let you know if something comes up that you
can handle.
About onethird of the people you talk to will immediately say that they don't need
money, but they know of individuals or businesses looking for help. When you do get a
referral be sure to elicit as much information as possible and then quickly make contact
with them.
The more you advertise and talk to people about your services, the more successful your
business is going to be. We suggest you run an ad in the classified section of your local
newspapers. It might read like this:
MONEY AVAILABLE! $50,000 to $10,000,000.
Business startups, expansion needs, construction loans,
cashflow problems. Call 1234567.
You should run such an advertisement in as many of your area papers as you can afford,
every day, for at least a month. This means that you'll have to have an advertising budget
with the money either coming in (or available) to meet these costs before you even
contract to run your first ad. This is part of the necessary planning that has to be done
before you actually open for business.
Any printed ad you run should include a minimum loan amount you'll handle a
statement such as "$50,000 minimum to $ . . ." This procedure will screen out
the people looking for small personal loans. At the same time, it's a good idea to list a
maximum amount you're capable of handling for instance, "$50,000 minimum to
$10,000,000." This will attract those who are looking for large business financing.
At the same time you're running the ad inviting people to come to you for their money
needs, you should also be running a daily ad such as this:
$350,000 NEEDED! Will pay maximum
interest. Growing business, excellent
profits and tax benefits. Call 1234567.
The purpose of the first ad is to build your list of people who want money or need
loans. The purpose of the second ad is to build the List of investors in your area with
money to put into some of these business proposals that you get from the first ad.
Obviously, you'll get more people wanting to borrow money than people with money to
invest. However, once you begin running these two advertisement you'll be on your way.
When you place your ads start checking and following up on similar ads you see running
in your area newspapers. They usually will be listed under "Financial & Loans
Wanted" or "Money to Loan." However, do not neglect to check the
"Business Opportunities Wanted" classification as well.
RESPONDING TO CUSTOMER INQUIRIES
When someone calls in response to your "Money Available" advertisement
whoever is acting as your secretary should get the name of the caller, the name and type
of the business, the telephone number, the amount of money needed, and the most
appropriate time for a consultation. This can be handled most efficiently with preprinted
telephone message pads. Simply collect information from these incoming calls, look it all
over, and start making your callbacks.
Basically, your callback conversation should sound something like this:
"Hello, John Jones? This is Mr. Money Broker returning your call about money for
business financing. I understand that you're looking for about $100,000 in order to set up
an auto tuneup shop. You stated that you are already pretty well organized with a
business plan and location, and that you feel you have pretty good collateral. That's very
good. Before we talk any further, however, I'd like to tell you a little about our
company."
"We represent a number of large lending organizations for business financing as
well as a number of private investors who are looking to invest in new ideas and
businesses. Their primary requirement, of course, is that they be assured of getting their
money back with a profitable return on their investment."
"What I do is work with you in preparing your loan or investment package so that
it will be attractive when it is presented to prospective lenders. It is very important
that your proposal be complete and in the proper order. It is also of the greatest
importance that it "look good" and "sell" the people to whom it is
taken. The prospective lender must feel confident in granting you a loan or investing in
your business. Once we've got your presentation together, I will take it to some of my
lending or investment sources and work toward obtaining the money you need."
"As I'm sure you're already aware, it's most important that your proposal be
prepared properly and presented to the people who are in a position to give you the money
for which you're asking. I work with you to see that your proposal is the best my people
have ever seen, and then I take it to those investors who have the available capital and
are looking for a good investment. For this I require a $100 broker's retainer fee. I then
go to work on your specific money needs. What we need to do now is set up a time and date
for me to meet with you so that I may review your proposal. Would tomorrow morning at
10:00 be all right with you or would 11:00 be better?"
The important thing is to be in control of this telephone conversation. Tell the
prospect only what you want him to think about. Sell him on the idea of getting on with it
by paying the broker's retainer fee of $100. Only after you have collected this fee, will
you start to work on evaluating his plan and getting him the money he needs.
When you go to see your prospect, you'll need to have a printed "broker's
agreement" ready for him to sign at the time he pays the retainer fee. An example of
a basic or simple broker's agreement is shown below. Feel free to use the following form
as a pattern for your own agreement, or you may even want to cut it out, paste it up, and
have your printer run off a supply for you. (Place your business name, address, and
telephone number in the "Your Name and Address" space at the top. Also, be sure
to block out the instructions on the signature lines).
YOUR NAME AND ADDRESS
AGREEMENT FOR FINANCIAL SERVICE
The undersigned, (Borrower's Name) , hereby appoints (Your Name) as his Agent, and
authorizes him to submit to lenders financial data and information supplied by the
borrower for the purpose of the lender making a loan or investment directly to the
undersigned. The undersigned agrees to pay to ( Your Name) a fee of % of the amount of the
loan or investment obtained. The undersigned hereby pays to ( Your Name) as a
nonreturnable fee for time and effort involved in appraising the feasibility of the
loan requested. This fee is separate from any other fees due if loan is obtained.
_________________ _________________________________
Date Borrower
CLIENT SELECTION AND LOAN PACKAGING
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 how to acquire a list of sources interested in lending money or investing in
a venture. You'll find that most of the borrowers with whom you contract to assist in
finding money are unaware that they will have very little, if anything, to say about the
terms of the loan that will finally be granted. You'll find that most of them are already
convinced that they have the ultimate idea for a business that will make everyone involved
rich. Almost all are trying to get started with little or no money of their own, and
they'll think that whatever the prevailing interest rate is, it's too much.
Your first chore will be to screen potential clients. Explain the facts of life to
them. Don't waste your time if you have the feeling they'll reject or refuse to accept a
loan you line up for them because of interest rates. If the client has been to most of the
regular loan sources in your area he'll know that when he wants or needs money it's the
lender who dictates the terms of the loan. A prospective borrower soon learns the
published prime rate 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 that is not associated with the business.
Most of your wouldbe 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 collected your
retainer fee, you must educate your wouldbe borrowers in this regard. Those who
cannot face the facts of life about interest rates may have to be forgotten.
Something else you'll have to convince your clients of is the high cost of entering
into a partnership. If the borrower says he'll give up a share of his business in exchange
for the use of your investor's money, the probability is that he'll have to give up a very
large share. Most small business investment corporations and private investors will want
at least 25 percent ownership, and more often than not a portion as large as 49 percent.
In 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 is absolutely essential that you
learn to qualify your wouldbe borrower before you get too deeply involved or waste
too much of your time.
For those who can't or don't want to pay your retainer fee skip them. And those
who can't or don't want to pay the high risk interest rates when you let them in on the
real facts of life forget them too. And those who have been turned down by
practically every lending institution in the country I would advise you to let some
beginner gain practice on them. And these are precisely the ones you need to learn to spot
while you are a beginner.
You should determine exactly how much cash and other assets your client can or is
willing to invest in his own proposed business. You'll have to be satisfied with the
character of your client as a borrower; his record of paying his bills; how he gets along
with people; and his overall chances of success. You'll have to check his references and
credit record. You'll need to evaluate his repayment plan should he default on the loan if
the business goes sour. Only when these questions are answered to your satisfaction can
you can go on with helping him put together a proper loan proposal, and work toward
getting him the money he wants.
You will become more efficient with each experience with a client. You'll soon
recognize which proposals on which to concentrate your attention and which ones to scan
briefly and hand back to a loan seeker. The more you deal with money professionals the
sharper you'll become, and the more money you will make. Money professionals know what
types of loans are possible or likely from each of their different funding sources, and
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 loan proposals your knowledge will improve your ability to package specific
requests and "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 your client's business, you'll
be taking a financial cut right off the top.
Once you are organized and rolling, you'll find that most of your daytoday
income will be derived from the packaging of loan applications. Once your client has
signed the broker's agreement and given you his check for the retainer fee, you'll be
helping him to get his loan or investment proposal together. This is the first thing to
do, and you HAVE to do this regardless of any forms your client has already filled out or
anything he may have done relative to a loan proposal.
First, give your client a detailed list of information he'll need to have within his
loan or investment package. Because requirements do change from time to time you will want
to give your client the most uptodate requirements in this regard. Go to several
of the banks in your area and ask their loan officers for a copy of their loan application
forms. Use these forms as your guide in making up the detailed list of requirements you
will use in working with your client. If you need additional assistance, check with the
resources in your public library or write to one of the several organizations listed at
the end of this report.
When you have the package put together and ready for presentation to a lender, take it
back to your client and brief him on how to present it to prospective lenders. Generally,
you will give him the names and addresses of the people you feel will be most likely to
listen to his presentation. He makes the presentation to the local prospects, and contacts
your other possible sources by mail. If he needs further help from you, charge him a
perhour counselling fee plus consulting charge for any special or extra time spent
working with him.
Most successful money brokers charge according to the size and type of loan being
requested. This fee is based on the amount of work and time expended in order to place the
loan. If it looks like a pretty solid business with a good record on the part of the
borrower, backed by sufficient collateral, then the fees are usually lower. On the other
hand, if it's a high risk proposal or if the borrower has very little business experience
and you're going to end up doing a lot of selling to get the loan approved, your fee
should be accordingly higher.
Remember: not all loans are approved. Even though they might have looked good to you in
the beginning, many loans fail based on the lender's instinct alone. With this in mind,
you have to charge for your services and make up for the time you spend with those
proposals that don't get approved by charging and collecting on those that do get
approved. An example of the typical commission charges is shown below.
Loan Amount Your Fee Commission
$5,000,000.+ 0.5% $25,000
$2,000,000. 1.0% $20,000
$1,000,000. 1.5% $15,000
$ 500,000. 2.0% $10,000
Loan Amount Your Fee Commission
$100,000. 3.0% $ 3,000.
$50,000. 4.0% $2,000.
$30,000. 5 to 10.0% $ 1,500 to $3,000.
Under $30,000. 10.% $750. minimum
Overall, you should position yourself and your service to the client in order to
collect a "finder's fee" of onehalf to ten percent of the amount of money
actually loaned to or invested in his business. Charge a flat $100 to $250 as a broker's
retainer fee for helping him with his loan presentation when he does most of the work. An
outright fee of 1% may be charged for the total preparation of his presentation package,
and a consultant's fee of $50 to $100 per hour should be added for any additional time
expended on the project. These are your "bread and butter" services that will
establish you as a professional and will keep you in business until you score with large
commissions from big dollar loans. You have to involve yourself in these services because
they'll make the difference between your failure or success in the money brokering
industry.
When you have put a loan or an investment proposal together intending to sell it to a
lender, first call a loan officer or the head of that lending organization. If you want to
present your package to a private investor you will more than likely have to call his
attorney, broker, or investment counselor. The purpose of your telephone call is to set up
an appointment in order to present your package in person. Thus, during the course of this
telephone call brief the lender on the highlights of your client's loan proposal. If he's
interested he'll probably want you to send him a written summary. After he's received the
summary and decided if he's still interested, he'll get back to you and set up an
interview with you, and later with you, your client, or both of you.
You and the borrower should rehearse the entire loan proposal and have all examples,
charts and graphic illustrations ready to go for a winning presentation. If the graphics
are produced on a computer it would be simple, inexpensive, and most advantageous to
produce a 35mm slide presentation. Any charts, graphs, or tables saved by word processing,
database programs, or in spreadsheet formats can easily be converted in color slides. Many
print shops, photography stores, or mail order dealers will quickly produce high quality
slides from your files saved on computer diskette for $3 to $5. A sharp, multicolor
slide presentation will help sway the lender in your direction. Any lender willing to
listen at all wants to hear the full story, and when they have a question, they want the
answer without hesitation. So be sure you're ready with a complete presentation when you
show up for that loanselling interview.
MONEY SOURCES
Once you start processing loan applications you'll find that about eighty percent of
the loans granted to small businesses are made by commercial banks. A little more than ten
percent are made by friends or relatives of the borrower, and about three percent by
finance companies. Another three percent will be granted by insurance companies. This
gives you an idea of possible money sources for your clients.
Remember: when a prospective borrower tells you how much money he needs and for what he
wants to use it, your job is to evaluate his proposal and match his particular need with
sources likely to be interested. As you build your list of money sources you will find
those that specialize in specific categories of loans: apartment buildings, medical
facilities, recreation setups, autoservicing center, and a myriad of others.
Most money brokers cultivate the savings and loan companies, union pension funds, life
insurance trust companies, credit unions, private investor groups, and even the small loan
companies. The important thing to remember is that if you're going to bring together
people needing money and people with money to lend, you have to continually develop
contacts in order to build your list of money sources. It is very helpful to get to know
your local bank officials because often they can refer you to a person you can really
serve who doesn't qualify for a bank loan.
You will learn also that most sources of venture capital (money for business startups)
want an equity share of the business. They generally don't require that the money they put
up be repaid because they're hoping to make their profit from a share of the business as
it grows and becomes more and more profitable. They especially like to get in on the
"ground floor" of small companies who plan to issue public shares of stock when
they begin to grow.
Money brokers should also develop contact with a number of people who might be
interested in investing as silent partners in new or growing business ventures. Silent
partners invest in a business without assuming any liability relative to debts the
business may incur while still sharing in the total profits of the business. In most areas
of the country there are always a number of wealthy people around who are interested in
investing small amounts of money in any number of business ventures, sometimes into as
many as they are able.
Until you've actually placed a few loans you're undoubtedly going to spend a lot of
time attempting to sell a loan that just can't be sold. You will have to develop your
skill in evaluating from the facts your borrower gives you the possibility of obtaining a
loan for him. Your evaluation will be based upon how much money he wants and at what terms
(time period and interest rate), his past business experience, and the feasibility of his
plan for success in the planned business. While it does take some time and concentration
to differentiate the winners from the losers, be aware from the beginning and you will be
less likely to be caught up in efforts to place a loan that just can't be placed.
Of primary importance to your lenders is your client's collateral; those possessions
which would assure repayment of the loan in the event of failure of the business. Lenders
won't even listen to or bother to look at a proposal that is not backed up with realistic
collateral support. And you may count on this: The lender will call you on any profit
projections based only on your borrower's glowing predictions. These are the things you as
a money broker must evaluate before getting too deeply involved. If the loan doesn't have
the look of at least an even chance of being approved, it is better to give it to your
client straight. It will save him grief in the long run, and will allow you to go on to
another proposal with better chances of success.
When you discuss the matter of collateral with a client, by all means be thorough and
inquisitive in working with him. Many borrowers have collateral they have never thought of
in terms of security. For instance, antiques, coin or stamp collections, life insurance
policies, even a wealthy friend or so who would sign as guarantor(s) of a loan. Remember
also any accounts receivable, promissory notes, machinery and equipment, and any real
estate equity.
When you've listed all the collateral that can be discovered, you have to demonstrate
very clearly just how the loan is going to be repaid particularly if the business
fails. Collateral is a necessary part of any loan transaction, but it usually is not
enough to satisfy the entire face value of the loan. Thus, in addition to collateral the
borrower has to have a precise plan for repaying the money he borrows.
As long as you work through the commercial banks you shouldn't need any kind of
broker's license. To be certain, however, you will want to check with your local licensing
authorities. In the end, you'll probably want to get a real estate broker's license
because in many cases real estate will figure into the loan in one way or another.
However, you can get started without one. If you run into an immediate need for a real
estate broker's license you can always make an arrangement with someone who has one and
let him be the "licensee of record."
One final, and possibly the Number One, requisite for success in your Business
Financing Service venture: You need and must have enough money available or coming in from
some outside source(s) to sustain your daily living for at least the first three months
before you open for business. It will probably take you two to three weeks to put together
each of your first loan proposals. You're working (investing your time) but the money
won't be coming in until you finish the job. And even when everything is ready and you
begin trying to place a loan, it could take you anywhere from three weeks to three months
to get the final approval.
Therefore, the best way to get started as a money broker is, as we discussed earlier in
this report, to start on a parttime basis while you are still holding down a regular
job. Remember: you can work out of your home. Do some careful planning and become
efficient with your time. Concentrate on getting those retainer fees, and proceed with
packaging the loan proposals.
There is no effortless way to start this or any other business. You have to start
small, do all or most of the work yourself, and, in addition to investing your time,
you'll have to "prime the pump" with money of your own. However, it can be done,
and this particular kind of business can take you from a pauper to wealth in a short time.
Businesses in every city and town in this country would like to have access to more money
than they currently have available. You can become rich beyond your wildest dreams by
helping them. Identify those with money needs and bring them together with the people or
organizations with money to invest. All it takes is the knowhow we've passed along
within this business startup manual, and DETERMINATION on your part. The possibility
of success is before you Go For It!
