The last question to ask is, “what happens if I can’t pay the money back?” The answer to this question will vary from not so severe consequences to pretty significant consequences. Let’s talk about that family loan. If you can’t pay that back, will your family member or friend write you off and never speak with you again? Would it make showing up at family functions awkward? My philosophy is to always have open lines of communications whether you are dealing with a family member, friend, or institutional investor. The bottom line is that things don’t always go as we expect them to and you won’t always be able to pay the money you borrow back exactly as you expect. If you owe money to an institutional lender, you could damage your credit by not paying the loan back timely, so keep that in mind. If you took out a secured loan against a car or your home, you could ultimately lose the car or the home. If you borrow lots of money and can’t pay it back, you might find yourself in bankruptcy court and / or out of business.
I hope this gives you some things to think about if you are at that stage of seeking funding. It’s a great feeling to have support in growing your business and it’s a huge vote of confidence to have others believe in you to the point of putting up money, or realizing that you have built a strong enough business that it meets the standards of underwriters and investors.
My best piece of advice for making sure you can pay that loan back is to control your spending and be laser focused on getting in front of targeted prospects that will become customers. Customers lead to revenue and revenue leads to success!
About the Author
Anthony Kirlew is a lifelong entrepreneur, speaker, author, and business consultant. He is the founder of AKA Internet Marketing, a full service digital marketing agency and helps companies acquire funding to grow their business or fuel their marketing. Learn more at www.FundYourMarketing.com or www.AnthonyKirlew.com