The biggest advantage of a bridge loan is the lenders are always concerned about the value of the property, not so much you personally. In other words; the property is what secures you the loan not your current credit status. It’s all about the value of the property.

The life of a bridge loan is approximately one to six-months; although you can get an extension of up to 2 or more years. Again, these lenders are not your average banks. The flexibility of this type of loan is why you will either get approved (or not) in as little as 2 days.

You may be asked by the lender why are you looking for a hard money loan instead of a traditional loan? There are many reasons why someone may consider using hard money loans. Most likely your response will be because you need the money now and not three months from now when the window of opportunity has most likely closed, or you may respond that your credit has some blemishes, filed recent bankruptcy, low occupancy levels, etc.

Some of the things your hard money loan lenders want to know will be: the type of collateral, the location and approximate value of the property, the amount owed and most important, the exit strategy of the loan or how will you pay the lender back.

Most bridge loan firms want your business and will work with you to get you 60% – 75% financing. (In some cases you can get 100% financing if you have additional assets to put into the deal.) In 99.9% of most cases, the hard money lenders are private companies, and you won’t typically get 100% of the value of the property. The low loan to value is in place to protect the lender in case of default on the loan.

Be prepared though, the interest rate on hard money loans is much higher than on traditional loans. Expect 10 to 15%, depending upon the overall risk. There will also be points or origination percentages that range between 1 and 5% of the loan amount set forth by the lender and assessed at the close of the deal. However, the higher interest rates, flexibility, and the quick turn-around often offset all the paperwork and time involved with traditional banks.

Some hard money lenders charge a fee for pre-payments, some charge an exit fee for the loan and others charge nothing. Make sure you know exactly what the terms of the proposed loan are before engaging any lender. A detailed letter of Intent is an excellent way for you and the hard money lender to understand exactly what is expected by each party.
One more thing, if you are not familiar with bridge loans do some in-depth research first. Talk to others who have experience with hard money bridge loans or ask your lawyer for some help. Don’t forget, there is plenty of information on the web that you can use to your advantage.

Are you looking for the best deals and rates on bridge loans? Visit http://directmoneylenders.com/ today for more information!

Author: Scott Bowens
Article Source: EzineArticles.com
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Washington, DC, United States (AHN) – Kanye West’s infamous “George Bush doesn’t care about black people” rant disgusted the very same person he referred to. Former president George W. Bush said it was one of his “most disgusting” moments in his term as the country’s leader.

In an interview with Matt Lauer, Bush said he didn’t appreciate the hip-hop superstar calling him a racist during a segment for the Hurricane Katrina relief benefit concert in 2005.

He told the host on his “Matt Lauer Reports” special on NBC, via EW.com, “He called me a racist. And I didn’t appreciate it then. I don’t appreciate it now. It’s one thing to say, ‘I don’t appreciate the way he’s handled his business. It’s another thing to say, ‘This man’s a racist.” I resent it, it’s not true.”

Lauer also quoted lines from Bush’s new book “Decision Points,” which read: “Five years later I can barely write those words without feeling disgust. You go on: ‘ I faced a lot of criticism as president. I didn’t like hearing people claim that I lied about Iraq’s weapons of mass destruction or cut taxes to benefit the rich. But the suggestion that I was racist because of the response to Katrina represented an all-time low.’”

Bush admitted that that was the worst moment of his presidency.

Lauer pointed out that people might give him heat for mentioning that particular moment in the book, but Bush replied, “Don’t care.”

He said that while the devastating situation in Louisiana affected him deeply, Kanye’s words were different because it was a “disgusting moment, pure and simple.”

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Los Angeles, CA, United States (AHN) – Los Angeles Dodgers manager Joe Torre has reportedly decided to step down from his post after the season, the team reported in a statement Friday.

A press conference is scheduled for 5p PT, and former Yankee great/Dodgers bench coach Don Mattingly will be named his replacement.

“It has been an incredible honor to wear the Dodger uniform and I will always carry with me some very special memories from the past three seasons,” Torre said in the Dodgers’ statement. “This was not a decision I took lightly but I believe it’s the right one for myself and my family and I’m truly thrilled that Donnie will be the one leading the Dodgers. It’s time that the Dodgers had a new voice and I have the utmost confidence in him. I know he’s ready for the challenge.”

Torre was ready to take over the Dodgers after falling out of favor in New York for the Yankees poor postseason showings in his latter years as skipper.

He enjoyed a remarkable run in New York, however, leading the Yankees to World Series titles in four of his first five years there.

Torre was unable to replicate his success in Hollywood, as the Dodgers won a pair of NL West titles but were knocked off by the Phillies twice in the NLCS.

This season, the team is in disarray due to mediocre play and the McCourt’s ownership/divorce drama being played out in court and in public.

Torre, 70, has reportedly been offered a position with the club, but is unlikely to accept to keep his options open and perhaps manage again.

Dodgers GM Ned Colletti had praise for both Torre and Mattingly in the team statement.

Ned Colletti said this of Mattingly and Torre:

“Over the past three years, I’ve had the opportunity to work with Don closely and have gotten to know him both personally and professionally and I’m convinced that he’s the right person to lead the Dodgers. His work ethic is unparalleled, his baseball knowledge is vast and his leadership skills have been established during more than three decades in professional baseball.

“Donnie has also learned alongside the best in the business. Joe Torre has been a great friend, a strong leader and an incredible presence for this organization and I cannot thank him enough for his service to the Dodgers. I respect his decision to step aside and I look forward to the day where I can watch him take his rightful place in Cooperstown among baseball’s legends.”

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Difficult to come buy and carrying a high price, Hard Money Loans  are the last resort for those who can afford it.

Let’s start with a quick comparison of conventional loans to hard money loans to create a distinction up front.

Conventional loans are the tool of most home buyers. Lending institutions loan money to the buyer based on credit history and income. Hard Money Loans are less dependent on credit score and revolve around assets, instead. There should be no confusion that one is a substitute for the other. When buying a house there are many choices in loan options, but the choice between conventional or hard money is not one of them. Hard money loans are for unique, often distressed situations.

Hard money comes from private investors who can take the time to assess a borrower’s entire situation, in a way that traditional lenders cannot. The private investor understands that a few missed payments resulting from something like loss of employment, does not mean the buyer cannot repay his loan. This is a perfect scenario of when hard money works. When the homeowner has fallen so far behind on his mortgage that he cannot catch up even though he has gone back to work and resume payments, the private investor can come in, provide hard money to pay original mortgage off, offering the borrower a chance to start fresh and preserve his credit. Soon the damages of the missed house payments are repaired on his credit report and he can refinance in a traditional manner.

The reason for refinancing as quickly as possible is that hard money loans carry stiff terms. Interests rates average between 10% and 18% making it a costly option, albeit a valuable one.

Another motivation to use hard money which is relevant in markets driven by foreclosures is rehab purchases. Investors find a great property to renovate quickly for profit and they want the loan fast because there is already a buyer for the house when it’s done. The hard money loan is available much quicker and without the red tape of a traditional loan.

Don’t be confused, though, hard money loans are not a simple alternative for those with poor credit. Even private investors aren’t interested in a borrower with a history of bankruptcy or non payment. In addition, the closing costs on a hard money loan must be paid up front. These fees could be a couple hundred dollars or a couple thousand, making the hard money loan a non choice for most borrowers in distressed situations.

Hard Money Loans  are difficult to come by. The loan to value rate is a relatively low 50 to 75%. Hard money lenders like to only finance properties that are nearby them in areas they are familiar and comfortable with so they can monitor the property. Be wary of a hard money lender who makes things look too easy and shiny, as there are individuals who prey on homeowners and set up situations that guarantee failure so they can seize the house and profit from its sale.

If you fit into one of the unique scenarios that would benefit from a hard loan, do your research before signing any papers. Get recommendations on the private lender when you can. With no bank regulations on private lending the only one who can separate a legitimate lender from a loan shark is you.

Don’t shoot from the hip, use a script. If you want to sound confident and competent, I strongly suggest you write out your opening and closing remarks. If you sound the least bit nervous or unprepared, people will immediately sense this and rightfully assume you lack experience. Using a phone script for your opening and closing remarks is a good idea for several reasons. A well polished phone script provides you a consistent approach that keeps you focused and guarantees you don’t leave out important information. Be respectful of your prospects time by designing your phone script to be short, sweet, and to the point. Once you have prepared your script, tape record yourself, reading it aloud until you sound smooth and polished. Recording and role play provide you the opportunity to critique yourself and improve your delivery.

During face to face conversations, first impressions are based primarily on appearance. While on the phone, impressions are based on brevity, vocal quality, and attitude. An upbeat attitude is contagious and builds rapport that creates a very positive first impression. Keep in mind that a smile can be heard over the phone. The best way to build trust and rapport during a phone conversation is to match your prospects energy level. The psychological power behind the principle of matching is based on the premises that people want to do business with sales people who they feel are similar to them.

There is absolutely no substitute for preparation and practice. Practice builds confidence through repetition. Role play with other associates. This provides for a dress rehearsal and the opportunity to work the kinks out of our script. While it is impossible to have a script that might address every conceivable objection, you must anticipate key objections and develop scripts to respond to them.

Remember to stay positive, polite and professional. Prospecting for Hard Money loans, requires time, focus and a concentrated effort. Make your phone calls in the morning when both you and your prospects are rested and fresh. Stay organized by using a contact management system, such as ACT, to record your notes after each phone call. Relying on your memory alone is a poor business decision and is bound to cost you money.

Some do, some don’t, some will, some won’t, Who cares; who’s next. Don’t take rejection personally. Realize that prospecting for Hard Money Loans is fundamentally a numbers game. The key to your long term success is directly linked to your ability and desire to prospect effectively. Cultivating Hard Money Loans is after all, a contact sport.

James Perry, Is President of Alliance Portfolio Private Equity Finance. For over a decade, Alliance Portfolio has been Southern California’s direct Hard Money Lending authority, specializing in Custom Coastal loans for residential, commercial and mixed use properties.

Use a business plan. Start by writing a detailed business plan that you can use throughout your startup and beyond. The plan should include a statement of purpose or mission statement, which can help to guide you not only on startup but also all through the business. The plan also needs to detail the finances of the business.

The finances of the business include all the expenses for the business along with the projected sales. Overheads such as rent, utilities and postage charges must all be considered as well as other key budget items such as advertising. Don’t forget about one-time fees for business startup, licenses and inspections.

Another cost for all businesses is the monthly telephone charges.

Don’t skimp on insurance. Always get the full insurance coverage that you can get, even if the costs are slightly higher each month. This can help tremendously in keeping you covered for all types of events. Many small businesses have been wiped out entirely due to an accident or problem that was not covered by insurance.

Then you will need to figure out the actual material costs for your product or service. This should include any labor necessary. Don’t assume that your labor is free. This is a mistake many new small business owners make. Instead, be sure that you account for your own salary as well as the salary of any other employees that will be required.

Once you have the costs figured out you can set your pricing accordingly. Be prepared to do some market research. Always check competitors pricing to ensure that you are in line. You don’t want to be priced too high so that nobody will purchase your product or service. Likewise, you can’t be priced so low that you lose money with each purchase. Instead, take all things into consideration and price your product or service realistically while allowing for some profit.

Try to be prudent when it comes to the overheads for your business. For example, telephone service is one area that you may be able to lower the costs. There are many wholesale long distance providers where you can find good service with reasonable prices.

When making the budget always allow a category for unexpected items. These may come in the form of unexpected repairs or charges that you did not plan on. If you didn’t budget for these types of expenses the money will come right off the bottom line – profits. Instead, figure these expenses into the budget. Carry them over from month to month so that you have enough in the fund in the case of a problem. This also allows you some room for pricing changes in the event that some of your raw materials or labor prices go up.

A good business plan can get you some much-needed dollars for your business. Investors must see a business plan before they will invest money in your business. Yet investors can provide the money you need to get the business going. Banks and loan officers also must review a business plan before granting a small business loan.

If you are unsure about how to write a business plan get some help. A professional can help write a great plan for you and may be well worth the initial expense. Look at other business plans for similar businesses to get an idea of what it should be like. Finally, you can tweak the business plan as needed. Use the business plan as a roadmap to the success of your business.

1.) How much money is already invested? Do the client or other individuals/companies have a stake in the business?

Sometimes the difference between getting a loan and getting rejected is as simple as that. Imagine you’re coming to an investor with a fabulous business plan and you need, say, $500 million for a resort and real estate project. In your proposal you clearly state that you do not have one single dime invested yourself (yes, we had a business proposal like this once!). Do you honestly believe an investor is going to give you the time of day? Of course not. You haven’t taken any sort of risk — why should the investor?

In your business plan, it is key to explain fully, in the executive summary and then later on in the financials, just what monies are involved. Okay, so maybe you don’t have any money involved in that resort project, but you DO own the roughly 50 acres of land it will sit upon which is worth maybe $75 million. Good! Mention that in the proposal clearly and accurately, including what kind of land it is, along with a map, some distinguishing features (is it ready for construction, water, pathways, roads, accessibility, etc.) If you have other sorts of assets, something, ANYTHING that can be used as collateral against your loan, make sure it is explained and described.

If you have partners who have chipped in $250,000 for a project worth at the most $2 million, you have a significant edge over other people. Most investors we have dealt with like to see at least 10% of the required funds already in place.

2.) How accurate is the research involved? Does the client know the market, the competitors, and his or her chances?

We can’t begin to tell you how many business plans we have come across that had little or no market analysis or competitive structure. The client had no idea about the target market, the competition he was facing, nor even demographics of the area. He had an exciting product, but it was difficult to ascertain just how much success he was going to have SELLING it.

In many cases, an investor isn’t as interested in the product as he or she is in the product’s success on the market, so a good business plan should have a clear, accurate description of that market. Many things should be included like:

a.) Demographics of your target market and market analysis, with factors such as age, race, income, etc. Think about your average customer walking into your store for your product or service. What are they looking for? What do they look like? How much do they want to spend?

b.) A market analysis that describes the trends and statistics of your potential market. Will your product or service be in high demand for a long time — or will it have limited ‘shelf-life’ on the market, coinciding with a new fad, for example. Will the product or service be affected by shifts in the market? Is this a stable target market with limited shifts taking place, or does the market wildly fluctuate?

c.) Do you know your competitors? What are the similarities and differences between what they sell and what you sell? How are you better than them? How are you inferior to them? (Yes, you need to include that, as much as you don’t want to.)

3.) How realistic are the financial projections?

Be extremely honest. No start-up business makes a profit in its first year, no matter what you are selling. So make sure not to show that in your business plan. Also don’t be too alarmed at the first-year loss. We had a client with a business plan that showed a $400,000 loss against a $2,000,000 loan in his first year of operations and he panicked. Then we explained that he was going to have a loss because his first year of operations would have high expenses as he organized and finished all his preparations for his new company. Investors expect you to have a lousy first year — don’t beat yourself up about it. It’s not the first year that concerns them anyway — they are thinking 3-5 years down the road. If after three years your company isn’t showing a profit, that is when the investors get nervous. After all, why should they put their money into something if your business proposal shows that you won’t be able to pay them back? Luckily for our panicked client, his second year showed a profit of about $30,000 and his Year Three profits would equal $375,000, almost erasing his first year loss. He was going to have a steady 40% increase every year after that.

In many instances, the investor thinks long-term, and so should you. Your financials should explain what is going on, and what will happen. Don’t try to sugar-coat things, per se, but put a healthy spin on a mediocre beginning. Don’t impress the investor with what IS happening — impress them with what is GOING to happen.

4.) Does your proposal look professional?

You’d be surprised how many proposals are overlooked with something as simple as a large ‘BUSINESS PROPOSAL’ on the first page. This is merely common sense. If you want people to take you seriously, show your most professional side. Your proposal should be checked for errors, misspellings, proper formatting, and headings, and have clear, easy-to-read graphics or images. A client tried to convince us to use a dazzling bold red text over a green bar-chart and we hastily explained to him why it’s not a very good idea to ruin the eyes of a potential lender. Include pictures or illustrations, maps, diagrams and other visual aids, if possible. Also, take a good look at your writing. The character Rusty, played by Brad Pitt, in ‘Ocean’s 11′ said it quite well: “Don’t use 7 words when 4 will do.” Talk about your management team, but don’t drone on about how instrumental a part they have played in your life. Talk about the great product you have, but don’t go on about testimonials from other people,(or if you must, include them in the appendix) And don’t be funny. Humor should be left at the doorstep. If you want to be funny, become a stand-up comic. Treat your document and the people reading your document with the utmost respect.

5.) Is the management team solid? Are there good people involved?

Remember that your business is not, and should never be, about you. There have to be some good people involved with you to make it run smoothly. It does not matter what service or product or project is being offered, if you think you can convince an investor you’re a veritable one-man show, you are out of your mind. A client we recently wrote a business proposal for was creating a new mobile-phone service, and amazed us with the list of engineers, technical advisors and IT professionals he had attained. When we saw how the management structure was fully laid out, and how each individual was going to fit in, we knew right away this particular proposal had a good chance to get in the front door.

Investors want to know who is on board, what their job is, their experience in the field you have chosen to represent, and a little of each person’s background and education. A solid management team, with a full layout as to positions, responsibilities and backgrounds, is a sure-fire way to get an investor looking at your proposal a lot more.

6.) Is the exit plan well defined?

Unless your lender is going to get involved with you through a joint-venture, or partner, chances are he or she does not want to stick around with you forever. Investors want to know what you’re offering them later on down the road, when it’s time to cut you loose and count the money you made for them. Some examples of exit plans include:

a. Creating an initial public offering (IPO). If your business has the possibility of going onto the stock exchange later on, and investors can share in dividends, this is very important for them to know from reading your proposal. Let them know how long it will take to get an IPO, and estimate the price per share you foresee, if you’re offering investors a first-buy once the IPO goes public, etc.

b. Buyout. Perhaps your shoes-string business is going so well, your investor is impressed enough to want to buy your company completely for several million dollars. If you want to offer this alternative to long-term investing, make sure you let the investor know the approximate value of the company after a certain number of years. A business valuation report is very helpful in this regard. Let the investor know exactly what he or she might be getting into and if it’s really worth pursuing. If you can do a valuation of the company based upon your projections, it may assist the investor in determining if you are worth the time and effort to invest.

c. Sell the company to others. If your business has the possibility of going up for sale to other interested parties, the investor should know details such as possible buyers, how much they could pay, the value of the business at the point of sale, etc.

d. Pay out of equity. Let’s say Steve wants equity in George’s company and receives 20%. Steve loans George the initial funding and an agreement is made that Steve will own this equity for 10 years. Each year, George will pay Steve 20% of the gross profits. At the end of ten years, if any money is still owed on the loan, which is doubtful, George will pay the equity of 20% and a balloon payment of anything that remains on the loan. All this, of course, must be agreed upon at the outset, so make sure you define this clearly.

7.) How much money do you need and how will it be used?

As weird as it sounds, we have had business proposals come past our desks that explain how much money is needed — but fail to tell us what it’s being used for. An investor will balk at someone who says they need $100 million for an oil well project yet doesn’t explain where all this money is going. Our business proposals include a special heading for Start-up expenses (when dealing with a start-up company, of course), that explains and lists the expenses the investment will cover, and for how long.

If you want to really impress investors, include what we call a “phase plan”. For example, let’s say you want to start that oil well project. In Phase One, you show the investor what you’ll be spending, in this case, for surveys of the land, preparations for drilling, etc. Phase Two could show expenses for drilling equipment, personnel, and construction of the wells. Phase Three could discuss refining procedures expenditures, and so on. You have detailed out a full “shopping list” for the investor, and they not only know what you’re spending, but how it’s being spent, and an estimated time when it will be spent.

8.) How will the money be paid back?

On the heels of exit plans, an investor likes to know how you’re going to pay him or her back. If you can agree on a certain percentage each month, or each year, that is fine. If you want to offer annual equity and a share of profits, that’s great too. But whatever your options are, make sure the investor knows what you’re offering. Detail out all the pay-back options that are available, and order them in importance to you. You might want to think twice if your business has the ability to make $50 million per year, and your investor only gave you $5 million at the beginning, yet you offer a 35% equity every year! Reward your investors, yes, but don’t shower them with untold riches for nothing. A happy investor is always good, but make sure you’re happy too so that your business continues to prosper.

9.) What is the SWOT like?

SWOT stands for Strengths, Weaknesses, Opportunities and Threats — and if you do not know these, you have no business, well, running a business. Your proposal should describe each of these areas accurately and with great detail, at least a few paragraphs for each.

Strengths: What really makes your business stand out? Where does it excel?

Weaknesses: Where does your business need help? Where is it lacking?

Opportunities: What positive trends, actions or events do you see that will have a profound and positive effect on your company’s success?

Threats: What negative trends, actions or events could cause harm to your business — and how will you sail past those rough waters smoothly?

10.) How relevant is the business to our society?

A lot of people will try to tell you that investors really don’t care about this factor, but from our experiences you would not believe the amount of investment firm applications we have seen that ask this exact question. How your business impacts society, whether locally, nationally or world-wide, can have a positive or negative impact on investor interest. If you have a business proposal that offers 4,000 jobs to your city, or will strengthen economical development, or includes environmentally-friendly factors or some sort, your proposal looks that much better. Try to take the time when writing to think about how your project affects others around you. What are the benefits? The long-term effects? The opportunities for others? Every business has the ability to impact society in some way. Informing an investor in detail about how your particular project will do so, tells an investor that you care enough about your project to do the extra research, go the extra mile — and it shows a great deal of determination and heart.

And every investor loves that!

Author: Paul Kraly
Article Source: EzineArticles.com
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When it comes to writing a business plan, many businesses focus on speed. By rushing to complete their plans, businesses often forget to gather critical evidence to support their plans. Investors never read business plans that lack evidence or consider the claims in them worthless.

Gather evidence to build your case, support your claims, and persuade investors. When writing a business plan, use these 10 critical pieces of evidence to win the trust of potential investors and their backing quickly:

1. Articles about your industry, competitors, products, trends, and so on. When unsolicited, articles about your company or products help build credibility, provide unbiased viewpoints, and often include third-party research.
2. Market studies. Use market studies to support market trends, size, and growth rates. When prepared by an independent party, these studies add credibility to market related claims.
3. Product or business literature. In-house product or business literature shows you are in the game. More important, it can help investors better understand your product or service and the key point of differentiation you are competing on.
4. Customer interviews, surveys, testimonials. All these are effective forms of third-party endorsements in which someone offers independent testimony, comments, or opinions about you, your product, or your service. For these to be persuasive, include with them the person’s full name and an identifier, like a city or organization.
5. Contracts for leases, royalties, commissions, supply agreements, subcontractor agreements and the like. To prove that these arrangements exist is to tie them to contracts or agreements. An important arrangement with a specific supplier supported by a contract or agreement gives it real value to an investor.
6. Product cost and maintenance details. Claims like low cost producer are meaningless without facts and figures. Support all your claims. No matter what you claim, there is almost always someone who has tracked or analyzed the important statistic that backs it up.
7. Important technical drawings, patents, trademarks, franchises, copyrights, licenses, and so on. If you claim you have these, back them up. Don’t say you hold a patent if it is Patent Pending. If you hold a patent, give the patent number and type.
8. Financial statements, financial projections, tax returns, and similar financial reports. Show investors what you did financially. Where you spent and produced your money and where you plan to make it. This information is key to supporting the value you place on your business.
9. Corporate books and records, information about your officers or directors. These can include charters, bylaws, minutes of meetings, shareholder list and other stock records, qualifications and registrations. All these items support your claims about share ownership, dividends and incorporation.
10. Details of outstanding debt, equity securities, and so forth.Investors will want to know about the dividend rates, par values, principal amounts, interest rates, terms, and collateral about your outstanding or proposed debentures or equity securities. Use the agreements to prove important details.

Whether you want to draw in new business investors or excite current ones, write a business plan with compelling pieces of evidence that are persuasive and support your case.

Author: Michael Elia
Article Source: EzineArticles.com
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Silent business investors are people who infuse capital into a business, usually a startup, but who prefer to leave the management of day-to-day affairs to other people. They typically decide to put their money into the venture when their business acumen tells them it has promise. They invest capital, then sit back to watch their money grow, or share in the loss if the venture fails.

It has been said that the primary role of silent business investors in a business venture is to infuse capital, especially to startup companies. While a successful business starts with a great idea, it definitely requires more than that to set up the business. For the most part, you will need enough capital to establish your business and get it working, and to sustain it until such time that it breaks even, and then start earning profits. To get enough funding, most startups turn to silent business investors, especially when the money they’ve pooled from contributions of family and friends is not enough to get the business off the ground.

Some silent business investors do not provide the actual capital to start the business, but offer their own property as collaterals instead so the startup owners can secure a grant or loan. Others act as sureties, guarantors or co-makers for startup owners. Their good credit standing facilitates loans and grants in favor of the owners that they would not have been able to secure on their own.

Once a silent investor decides to put his money into a business venture, he necessarily becomes interested in the success of the venture. Because of this, he opens his network for the startup company to access and explore. Investors’ network of connections often proved to be a rich source of business opportunities for startups.

As we have said, in these tough times, silent business investors could just be the break that your business needs. But before you sign on the dotted line with a silent investor, make sure you do your homework.

First, you have to level any potential investor’s expectations. Sit down with anyone interested and explain everything in detail, including the risks. Don’t be afraid of turning them off. Chances are, they know that every business venture is faced with risks, and yours isn’t an exception.

Lastly, when you’ve agreed on the investment terms, make sure you get down all the items in black and white. Better yet, consult a lawyer when drafting the contract so you’re that all the details are clear and settled, and that your agreement is enforceable in the courts, in case your relationship turns from sweet to sour. It is no exception if you’re dealing with family or long-time friends. Business has a way of turning best friends into the worst enemies, so make sure you protect your interest with a formal contract.

As business angels are people who have generally already made their fortune through other ventures they could prove vital to the success of your business. They could bring you everything you need to get your business off the ground; the main thing being the money needed to start your venture up. As business angels are wealthy individuals they will invest in new business ventures that are considered high growth. Their reason for doing this is to gain a high return of the profits that the business makes. This means the investment that a business angel provides is a risk, as there is no guarantee that your business is going to be successful. Due to this fact a business angel will not only be investing money into your business; they will also do everything in their power to make sure that your business becomes a success.

In order to help make your venture a success money isn’t the only thing being brought to your company. These angels will also invest their skills, time, experience and the contacts that they have built up. So you will not only have access to all of the money that you need to successfully run your venture but you will also have all of the help that you could ever need right at your fingertips. Sound good?

Angels are a fundamental tool. They are needed to fill the gap that exists between venture capital and debt finance. They are imperative to the success of start-up ventures and early stage companies. There are however certain points that you need to keep in mind. To use the help of an angel your investment needs should be between £10,000 and £750,000; your business also needs to have a good early stage development or expansion plan and certain angels will only invest in particular areas of business. Basically in order to attract the attention of a business angel your business plan needs to be clear and you need to be able to demonstrate how your business will make money. All of your facts and figures need to be accurate. The reason why aspects such as these are so important is down to the fact these investors won’t put their money and time into something unless they feel it will be worthwhile; your venture needs to appeal to them.

If you do attract the attention of a business angel my advice to you is to spend time with your investor so you can see if you have a solid relationship with each other. It will also ensure that your business idea matches the skills that they have.

If you do take on board the help available from such an investor then the way it works is they will own a percentage of your business so when your venture starts to bring in money, a percentage of this money will be making its way across to your investor. This is however a small price to pay for the advantages that said investor will be bringing into your business.

Author: Helen Cox
Article Source: EzineArticles.com
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