LOAN SHARK

Lets see how fast you can swim out of your debt without been bitten by your loaners

Everyone wants to ride big cars, live in a big house, live the Hollywood dream and marry the Bollywood dream but ever thought of the skeletons lurking around as price we might pay for such kind of life?

Loan no doubt is fast track way of getting things done but what new entrepreneur fail to realize is that it’s not every business that needs loan at the first stage.

In two of my latest articles “Why Overnight Success is Unrealistic” and “Façade”, I stressed some captioning points on how to be successful.

Mr Gabriel Obechi Managing Director of Rainoil in a major publication, advised entrepreneurs on some captioning points which I review below;

Capital trial knowledge

When you put knowledge in front and capital is trailing knowledge, knowledge act as a protective shield over the capital unlike the reverse where you lose capital by trying to acquire knowledge.

Raise Capital from personal savings

If you are working try saving 10% of your salary. It’s like little droplets of water that makes an ocean. If you aren’t working, simply developing a hardcore saving habit from little earnings is another sure way along side family, friends and investors.

Don’t eat your seed

When you eat a fruit, you don’t eat the seed do you? You till the ground and plant to harvest something profitable in the future. That is where patience comes in.

Many people are deeply guilty of eating all their profit thereby running cashless even before they start their own business.

Whatever you get as profit should be returned back into the business for growth and expansion. The only time you can settle down to eat tangibly is when you have a profit forestry.

Start your business with equity

Bank loan brings debt into your business. As the business begins to expand, you gradually begin to introduce debt into your business to help grow. 

However, it’s advisable you start your business with your personal savings in order to avoid loss and extreme debt.

Bank usually asks for one year bank statement to know how effective your financial capabilities are, meaning you have been running major transaction prior to your loan request.

It’s not your money

I was involved in a supposed huge project last year with an upcoming company who sourced for loan from different sources. I figured out that 50% of the project wasn’t completed yet the management mismanaged the funds that were meant for the project.

Accompanied with the poor financial structure was ill-mannered, low experienced staff who added to the propagation of producing baseless result. The day of the project launch was a disaster. I was ashamed to be part of it though but I learnt a lot.

When you get a loan, you need to know it’s not your money, it’s something borrowed and you need to pay back. Meaning you need to have an expenditure map on how you intend to spend every penny way before you seek a loan.

Investors

Before looking for investor, you must have done your homework which must be convincing, attractive and appealing for investors to get involved. The beautiful thing is you must also make research on the different types of investors out there to suite your need.

Here are Types of investors

Can your idea be sold within 1 minute?

• Angel investor: People who give you money but intend to possess some percentage in your business.

Here are 20 things you need to know about angel investor

Collateral

What are you giving in return for the loan? Some people have indirectly given their lives as collateral without knowing. I must warn you that there are loan deals that involve Agent 47 (assassins) without your knowledge. In Nigeria, some Loaners go as far as involving charm in this package such that the loan you have gotten won’t be of any use to you rather you can’t pay back and your collateral is gone.

Wrap up

Loan shark is someone who is ready to give you a loan but with a high interest rate and use aggressive means to get back their profit. 

Often times, no matter how corporate the loan package term to be, it just seem to have lots of hungry sharks swimming underneath which you have to be very careful about.

Check out The Dangers of dealing with a Loan Shark

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