Microcredit and P2P Loans: Positive or Negative?
*Microcredit: the extension of very small loans (microloans) to those in poverty, designed to spur entrepreneurship.
*Peer to Peer Lending (P2P Lending): a new way to borrow money online directly from people.
Finding funding in this tight credit market is tougher than ever. And seeing more and more entrepreneurs turning to microloans, microfinance and peer-to-peer Web sites has me very concerned. While I was checking out numerous P2P web sites that are geared towards “Changing Lives”, I couldn’t help but to think, “Wow, this is great!”
That is until I looked a bit deeper.
The entrepreneurs and business owners posting profiles, i.e. loan applications, on these web sites are asking for capital for projects ranging from buying new equipment to leveling out cash flow. GREAT! Access to money’s needed to grow the economy.
This “micro financing “, “microcredit”, and P2P lending comes with a huge price tag; having interest rates varying between 18% and 36% (generally leaning more towards the 36%)! Not only are there high interest rates, but the applicants also have to be prepared to put their own personal credit on the line! Do you understand what that really means? What it means to you is that if your business goes under, you are personally responsible for paying back this loan. I find it so very unfortunate that while unscrupulous businesses are promoting themselves as “life savers”; they are actually taking advantage of the bad economy by preying on the entrepreneur and small business owner to make a quick buck.
Being an entrepreneur myself, I am truly disgusted and disappointed with this.
There IS a true formula to achieving business success, a true formula that gives you access to the capital you need to grow your business that is NOT tied to you personally, even in this economy.
So I am going to tell you this…
DO NOT LET THE MEDIA SCARE YOU!
THERE ARE WAYS TO BUILD AND GROW YOUR BUSINESS!
THERE IS ACCESS TO THE CAPITAL YOU NEED!
DO NOT LET ANYONE TELL YOU ANYTHING OTHERWISE!
You just MUST qualify your business.
How can I do that you ask?
First and foremost you need to understand the differences in the calculus that underlie business credit versus personal credit. Second, all entrepreneurs and business owners have to learn how to develop and maximize business credit separate and apart from personal credit.
I know, it sounds so simple! Two steps! What you need to understand is that these two steps are the difference between your business flourishing or having to close your doors and inevitably blame it on the economy.
Which scenario sounds better to you? (That’s a no brainer!)
The good news is there are people out there who are not looking to exploit the credit crunch; rather, they are here to educate and help the entrepreneur and business owner through these rough times!
Zapper Credit Solutions has been doing just that for the past 8 years for thousands of entrepreneurs and business owners. They are the Nation’s experts in helping businesses get through this 2 step process. Their Fast Track Business Credit program has been designed to help you access business capital through lines of credit, loans, leases, and trade credit. They have a hands-on program that guides you through the process of establishing, building, and maximizing business credit. Their starting point is to build a solid business credit profile, the keystone to business credit. This business credit profile is separate and apart from the individual credit histories of the officers, owners, and managers of the company. Thus, leaving the business owner access to unlimited lines of BUSINESS credit, without the high payback interest rates and negating from personally being tied to the businesses finances.
So beware of what you are applying for, if it sounds too good to be true…
it probably is!