With only 6% of new small businesses getting funded by bank loans, small biz survivors raise their money creatively. Lots of small biz people turn to family and friends, partially because rural families tend to live close together. Rural banks play a role, too. If it ain’t an ag loan, many rural bankers ain’t interested!
A great article by Asheesh Advani, at Nolo.com, offers some advice on financing through family and friends.
Getting friends and family involved in business financing is not uncommon — nearly one in ten Americans reports a loan outstanding to a relative or friend. And, although lenders usually get involved to help you out, they can benefit from the deal as well. For example, the interest you pay will probably be higher than what they would receive from other short-term investments such as CDs or money market funds. And you’ll still be paying less than you would on your credit card!
Some of the key points Advanti covers are:
- Protecting everyone’s interests
- Dealing with issues in advance
- Keeping the arrangement businesslike
- How to ask
- Documenting the loan or investment
- How small town businesses can market to remote workers and turn them into new customers - May 15, 2023
- Survey of Rural Challenges 2023 results - May 8, 2023
- Rural and small town ideas from the OU Placemaking Conference IQC 2023 - April 5, 2023
- Rural tourism trends say small towns are still cool - March 27, 2023
- Move Your Money and Bank Local - March 22, 2023
- Using a building as a warehouse or storage in a small town? Put up a sign - March 13, 2023
- How to get customers in the door of small town and rural retail stores - February 19, 2023
- Check your small business website for outdated pandemic changes, missing info - January 31, 2023
- Rural Tourism Trend: electric vehicle chargers can drive visitors - January 15, 2023
- 2023 trends for rural and small town businesses - December 26, 2022