Many a times it happens that an entrepreneur walks into a bank with a brilliant and well-prepared business plan and still does not get a loan from the bank. Most of these business owners then obtain finance from private lenders or through business capital brokers. For the business owner who does not want to give up a certain percentage of ownership in the business, private lending is the best option for funding. Even private lenders look for the same information and conduct a similar due diligence like banks for making a positive funding decisions.
Private lenders look for a great business idea at the right time along with a tight business plan. The business plan should have contingency scenarios and a realistic forecast. Most of the private lenders are specialists and engage in the higher risk ventures. All of them have clear knowledge about the opportunity and the risk that is associated with the selected business type and market segment. A private lender not only funds the projects but also creatively structures the loan repayment format. Some private lenders provide resources to the business owners.
For example a lender who has a background of automotive market would fund projects like automotive dealerships, tracking business, manufacturing and transportation. Lenders might also fund projects which they do not have much knowledge of but they know the potential of the business.
When Mr. McKenzie, a famous private lender was asked about how he made the decision for funding a project, he laughed and said that he does the best diligence that he can do and then it is like gambling on a slot machine. He said that you put your money in and take the risk and hope for the best. After 20 years of experience in investing and by seeing both winners and loser in the business Mr. McKenzie has developed an evaluation methodology that help him in selecting the business with highest probability.
Mr. McKenzie said that several projects come to his attention through business capital brokers. The capital broker screens the project and gives Mr. McKenzie a wider selection of projects that match his specific parameters. Business capital brokers develop relationship with hundreds and thousands of lenders and investors. If you need finance for your project, get in touch with some good capital brokers, explain them the business plan, and get them excited about your project.
