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!
Business or Vendor Loans?
One loan gimmick you may want to consider is the vendor, or supplier loan. I call it a gimmick
because it is a loan, but it is not really a loan.
What is a vendor loan?
This works real well if you are an artisan, craftsman, or work with products that need to be
reconfigured. For instance, a clay pot maker would fall under this category, or a carpenter.
How does this work?
Let's say that you are going on your own as a potter who makes small flower pots. You have
the kiln, the tools, and the space already dedicated to the job. Through your contacts and
just word-of-mouth, you secured a contract to make a large quantity of pots.
Problem is that you don't have enough money to buy the product (clay, paint, etc) to complete
the job. Borrowing money for this would be hard and would take far longer than you may have
to complete the job.
How do you resolve this?
The Lending Process?
You
approach your vendors and show them your contract or agreement to provide so many pots for
whomever your buyer is. Make sure that you trust the vendor and if you don't you may want
to hide the buyer's information.
Being straighforward with the vendor let them know that you need the product and will be
willing to pay for their supplying you on generous terms. Such as 90 days due, or something
like that. You could negotiate some terms that would be real generous but still allow you
to get a profit from your deal.
What's in it for the Vendor?
The
vendor gains because they will have sold product and profited from it. They would also gain
you as a new customer with potential for more sales. They would also gain your goodwill and
word-of-mouth marketing resulting from this sale.
What's in it for you?
You
gain because you are "borrowing" the supplier'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 vendor.
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 vendors, as they start working with you
and realize the growth in business that you will be able to bring them.
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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