If you’ve tried to secure a commercial loan in the past year or so, you know how difficult and stressful the process can be. What you may not know is that if you have a valuable product or service that meets a public demand, securing investors is always preferred over borrowing. The benefits of finding investors are too numerous to mention, but here are a few.
It’s Just Too Darn Tough to Borrow
The Washington Post captures the problem perfectly. Although demand for commercial loans remains high amid a global credit crunch, commercial banks and investment firms are continuing to borrow less from the Federal Reserve's emergency lending program. And this means less money for your venture, plan and simple. Commercial banks averaged $86.3 billion in daily borrowing, down from $88.4 billion just two weeks before. And that’s hardly comforting statistics.
Investments Means Less Stress for You
VendorSeek reports that, rather than dealing with a huge loan payment, investors will allow you to put all of your money towards the startup of the business. Because investors accept a certain amount of risk up front, you might not even be expected to pay back some or all of the funding should your project go belly up.
Beware of the Quick Response
If an investment firm or freelance broker promises you funding immediately, you should do a double take. Why? According to the Commercial Loan Broker blog, even professional, experienced brokers have no idea what can or can not be funded today. A real professional will try and match up your financial needs with the appropriate commercial loan opportunities, and that takes time.
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