Archive for July, 2008
You Know You’ve “Arrived” When…
July 10th, 2008
By The XBanker
…you make a cameo appearance in an Angelina Jolie movie.
Garrett Sutton’s book, The ABC’s of Getting Out of Debt, makes a cameo during a scene of the movie: Wanted.
The word on the street is that the movie is pretty lame – I guess the trailer is better than the flick (so you can see it here and save yourself some money). I imagine there will be some fatalities from kids trying to “bend” bullets (watch the trailer to see). On the other hand, Garrett’s book has received very positive reviews and no one has been fatally injured practicing anything in the book!
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What's Your Hurdle Rate?
July 9th, 2008
By The XBanker
My mother always taught me that “beggars can’t be choosers” and my father preferred the “don’t be penny-wise, but pound foolish” – either expression is fitting for this topic. In the last week, I’ve had three experiences that made me think about being wise when you need money for your business and understanding the concept of a hurdle rate.
My first experience was a discussion with a consultant to a portfolio of companies in various stages of their business – all with immediate capital needs. We were exploring potential solutions for these people. Most simply needed $50-100k to purchase inventory or to invest in new opportunities – getting the money is critical to their success. Yet, as I started asking questions, I was being shot down with every possible financing option. It was apparent that these business owners were looking for $100k for 2-3 years at less than 5% interest with no colateral and no personal guarantee and they wanted it now, despite their less than stellar credit.
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What’s Your Hurdle Rate?
July 9th, 2008
By The XBanker
My mother always taught me that “beggars can’t be choosers” and my father preferred the “don’t be penny-wise, but pound foolish” – either expression is fitting for this topic. In the last week, I’ve had three experiences that made me think about being wise when you need money for your business and understanding the concept of a hurdle rate.
My first experience was a discussion with a consultant to a portfolio of companies in various stages of their business – all with immediate capital needs. We were exploring potential solutions for these people. Most simply needed $50-100k to purchase inventory or to invest in new opportunities – getting the money is critical to their success. Yet, as I started asking questions, I was being shot down with every possible financing option. It was apparent that these business owners were looking for $100k for 2-3 years at less than 5% interest with no colateral and no personal guarantee and they wanted it now, despite their less than stellar credit.
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Do You Trust Your Banker?
July 3rd, 2008
By The XBanker
One benefit of being a bit of a packrat is that every once in a while you find a gem hidden in your junk. While digging through some files recently, for example, I came across a brochure from a law firm I had been saving for…well, let’s just say a while.
Titled, Words to the Wise: 10 Rules to Remember When Borrowing From a Bank by Cappello and McCann – now Capello and Noel — it describes precautions smart borrowers should take when getting loans. We’ll help warn you when we can.
I’ve asked their permission to share some of these tips and over the next few weeks I’ll do that. I’ll start by excerpting from Tip #10 – one of the most important:
Don’t ever forget that your banker’s allegiance is to his bank and not to you.
“Many people like to develop strong personal relationships with the people they do business with. They may foster close friendships with a loan officer or banker, especially in a small town where the branch manager knows everyone and there’s only one bank in town.
No matter who close you and your banker become, how many football games you go to together, or how many of his children he names after you, you need to remember that if it’s a choice between his head and yours, it will probably be yours. This is part of the unfortunately rule that you should not trust your banker; in other words, “Borrower beware.”
While the current trend favoring lenders may reverses itself, today courts are saying that lenders don’t have to deal fairly and honestly with their customers, and that they can strictly enforce all the terms of the small business loan documents no matter how onerous and no matter what the customers were told. While your bank may advertise itself as your “friend” and “trusted advisor” and your banker may assure you he is just that, lending is like any other business. It’s a dog-eat-dog world in the lending industry today, and you just might be your lender’s next breakfast.”
Cappello and Noel is one of the country’s top law firms when it comes to lender liability, so you know they have seen plenty of examples of lender-borrower relationships gone bad. You can’t forsee every problem, but you can be smart about shopping for a loan and head off some of them before they begin.
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Build Business Credit…And A Business!
July 1st, 2008
By The XBanker
Garrett Sutton and I were chosen earlier this year to contribute a chapter on building business credit to Entrepreneur’s Start Up Guide: Start Your Own Information Marketing Business. When we saw the line up of other experts who were writing chapters, we knew this would be a great project to be involved with.
Our chapter, “Financing Your Info-Marketing Business,” describes how (and where) to borrow money, how to establish business credit, what do to if your credit isn’t so hot, accepting credit cards, and how to manage the bottom line. We also offer numerous resources to compliment our advice.
As they say, though, “That’s not all!”
This book is designed to help you escape the 9 to 5 with an information marketing biz. (This applies to professionals such as doctors and lawyers, as well as newbies — basically anyone who is tired of trading hours for dollars and wants to build a solid business). With the help of numerous info marketing gurus who have made a lot of money in diverse specialties, you’ll learn exactly how to get your dream off the ground.
I’ll add that while most publishers move very slowly, this book was produced in an almost astonishingly short period of time, which means that you aren’t getting advice that’s already dated.
I hope you’ll pick up a copy of Start Your Own Information Marketing Business on Amazon, Barnes and Noble or at your local bookstore. And I hope you’ll share your thoughts on the book with me — as well as your successes!
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