One of the joys of going into business for yourself is the opportunity it gives you to network with some key players in different industries. I’m talking here the power players of industries such as banking and finance, whom you get to meet at times purely based on their interest as to why you’re perhaps at a coffee shop during the day, when everybody else who is employed is slaving away in an office somewhere.
It’s rather ironic how those people in top management are so interested in what us entrepreneurs, freelancers and business persons get up to in our lives, especially since they’re effectively tasked with overseeing their subordinate employees at their workplace. Anyway, on one such occasion I was lucky enough to add a couple of bank managers to my business network, from whom I learned quite a lot by jokingly asking them to get me a loan for my web-based start-up business.
…Oh and yes, bank managers do still exist…the traditional ones whose job is to manage the banking services of a selected basket of clients…
So anyway, being at the heart of the financial industry they reiterated the old adage of banks not really taking risks with their money and only lending to clients whom they have some way of getting their money back from should they not be able to honour their repayments. So they rather jokingly in kind told me that I have a better chance of getting a personal loan if I was employed full time, not even a business loan, even though I have some solid ideas for web ventures, some of which are already up-and-running and generate good money.
The conversation took a rather insightful turn however when they finally came out with it all, citing how they would in fact never handle their finances in the same way that their clients are allowed to and sometimes even encouraged to. It would simply mean the big banks would go out of business, which in turn means they’d lose their jobs. They were willing to spill it all, right before my feet though because they know that I’d probably never make for one of their clients in any case, so they wouldn’t be losing anything but gaining an entrepreneur in their own network.
So here’s the lesson: in order to finance something which is notoriously hard to finance, like a web-based start-up, you have to look at your finances in their entirety and not single each aspect out as an individual, independent element. The very simple example they relayed to me was that because of my bad credit record (which entrepreneur hasn’t had a blemish on their credit record at some point in their lives?), I could perhaps consolidate all the debt I have so that I only have to pay one debtor at a lower rate, while at the same time getting financed for essentials such as a vehicle through bad credit car finance specialists. That alone will free money up to fund something like my web venture because I’d then have some collateral which I’m putting in myself, paving the way for other funders to follow suit.