There is one thing we can learn from bankers. Many miss it. You know what it is?
Paper. That is the answer.
Papers called "loan agreements". What's so special with "loan agreements"? Simple, that paper tells the world that the borrower owes the bank $X in total (prinicpal + interest).
Yeah, but that is just banks. You can never do that yourself so why should we learn from banks? Well, open your eyes.
You don't have to be banker to create paper. Legitimate paper.
RE investors who create lease agreements with tenants, do it. Businesses who have customers sign a purchase agreement, do it. Contracts, IOU's you name it. They all have one thing in common. That thing is: They are enormous assets. Worth a lot.
When starting companies I try to have as many customers sign purchase agreements or any other debt notes. Why? To have these papers as my investment in the company I want to create.
If I can't find investors I borrow against those IOU's, contracts and what have you. So what I look at when signing people up on these contracts is credit worthiness. If they don't have credit I will not sign them. And they need to have a stable income of course. Everything the bank wants to see in order to lessen their risk.
When borrowing you only get some percentages of the actual contract value, IOU value etc. But you still get money, and the customer is paying for it. You use your customers as your financiers. Just like a bank would do when they create the cash to lend to their borrowers. That is the lesson.
So, if you don't have cash yourself when starting your business. Find a way to get paper promises from customers and use these papers as collateral at the bank or use them as your "sweet equity" investment against investor capital. Hire a CEO and of you go.
Paper. That is the answer.
Papers called "loan agreements". What's so special with "loan agreements"? Simple, that paper tells the world that the borrower owes the bank $X in total (prinicpal + interest).
Yeah, but that is just banks. You can never do that yourself so why should we learn from banks? Well, open your eyes.
You don't have to be banker to create paper. Legitimate paper.
RE investors who create lease agreements with tenants, do it. Businesses who have customers sign a purchase agreement, do it. Contracts, IOU's you name it. They all have one thing in common. That thing is: They are enormous assets. Worth a lot.
When starting companies I try to have as many customers sign purchase agreements or any other debt notes. Why? To have these papers as my investment in the company I want to create.
If I can't find investors I borrow against those IOU's, contracts and what have you. So what I look at when signing people up on these contracts is credit worthiness. If they don't have credit I will not sign them. And they need to have a stable income of course. Everything the bank wants to see in order to lessen their risk.
When borrowing you only get some percentages of the actual contract value, IOU value etc. But you still get money, and the customer is paying for it. You use your customers as your financiers. Just like a bank would do when they create the cash to lend to their borrowers. That is the lesson.
So, if you don't have cash yourself when starting your business. Find a way to get paper promises from customers and use these papers as collateral at the bank or use them as your "sweet equity" investment against investor capital. Hire a CEO and of you go.
Dislike ads? Become a Fastlane member:
Subscribe today and surround yourself with winners and millionaire mentors, not those broke friends who only want to drink beer and play video games. :-)
Membership Required: Upgrade to Expose Nearly 1,000,000 Posts
Ready to Unleash the Millionaire Entrepreneur in You?
Become a member of the Fastlane Forum, the private community founded by best-selling author and multi-millionaire entrepreneur MJ DeMarco. Since 2007, MJ DeMarco has poured his heart and soul into the Fastlane Forum, helping entrepreneurs reclaim their time, win their financial freedom, and live their best life.
With more than 39,000 posts packed with insights, strategies, and advice, you’re not just a member—you’re stepping into MJ’s inner-circle, a place where you’ll never be left alone.
Become a member and gain immediate access to...
- Active Community: Ever join a community only to find it DEAD? Not at Fastlane! As you can see from our home page, life-changing content is posted dozens of times daily.
- Exclusive Insights: Direct access to MJ DeMarco’s daily contributions and wisdom.
- Powerful Networking Opportunities: Connect with a diverse group of successful entrepreneurs who can offer mentorship, collaboration, and opportunities.
- Proven Strategies: Learn from the best in the business, with actionable advice and strategies that can accelerate your success.
"You are the average of the five people you surround yourself with the most..."
Who are you surrounding yourself with? Surround yourself with millionaire success. Join Fastlane today!
Join Today
