SBA Loans, Angel Investors, and Entrepreneurship

SBA loans are alternatives to using angel investors. Next, your success as an entrepreneur relies on you being a knowledgeable and experienced manager pertaining to the industry in which you plan to enter. Many angel investment groups only meet once a quarter as it relates to providing financing to small businesses. Due to the economic recession, most angel investors are seeking to obtain low risk investments that generate highly recurring streams of income that can come in the form of dividends, cash payouts, or other forms of capital disbursements. The presentation of a business plan will be different depending upon the requirements of the individual financier.

Successful entrepreneurs keep their overheads low and their productivity high. Minimize the amount of capital needed by keeping overheads low, productivity high, and ownership of capital assets to a minimum. Angel investors want all of their investment put directly into making the business grow in order to insure a high rate of return. Venture capital is only reserved for large scale businesses. Negative economic changes should be discussed in your business plan as it relates to working with a SBA lender, angel investor, or venture capital firm.

If you are seeking to purchase real estate, you may want to work with a private lender that can provide the capital that you need if you do not qualify for traditional mortgage or hard money financing. We will discuss the acquisition of real estate via a number of different financing means as we progresses through these series of articles. Real estate is usually one of the best investments that you can make as an entrepreneur if you are seeking to acquire owner occupied properties that will be used in conjunction with your operations. This is due to the fact that you will be able to generate a very high rate of return on the capital appreciation associated with your building or properties. The capital return related to any real estate investment should be clearly shown in all aspects of your business plan as this is a large appreciable tangible asset.

It is inadvisable for an entrepreneur to wait for the launch of a new business to become knowledgeable in that field. You should review all legislation that may impact your business when you are producing a business plan for an individual investor, SBA loan, or any other type of financing. For the best success, enlisting the help of a highly qualified business plan writing professional is always recommended. As we discussed before, is extremely important that you have a certified public accountant were covered in working with you when you're seeking capital from an outside funding sources.

Angel Investor List Download. No registration required! Includes Free Business Plan Template.

Matthew Deutsch is a prominent business plan writer. His work has been included in nine books pertaining to this subject. Additionally, Mr. Deutsch has written extensively on subjects regarding entrepreneurship, small business lending, angel investing, and other related topics.

Angel Investors and Real Estate

Angel investors typically do not invest in real estate. You can create a table at showcases all of the available assets that can be used as a security for the investors that you are seeking especially if you are seeking angel investment for real estate purposes. Often, you can syndicate your deal as it pertains to raising a large amount of capital, and this is especially important for real estate needs. In most instances, venture-capital firms do not want to provide capital to real estate businesses unless there is the expectation that the real estate will go public via a real estate investment trust. More and more angel investors are investing in hard money mortgages, secured by real property purchases, due to the fact that there is an immediate upfront fee paid to them for providing capital.

If you are looking for angel investors then you may need a private placement memorandum even if you are seeking to purchase real property assets with the proceeds that you are seeking. The current economic climate has made lending very difficult for people that are involved with this particular industry. Syndicated investments are very important in the world of small business finance especially if you are seeking to acquire an owner occupied property or related asset.

Typically, only highly experienced entrepreneurs are able to raise large amounts of capital specifically for the purpose of acquiring income producing properties. Loans that are provided by angel investors typically are not typically used for real property purposes unless it is for a down payment for the specific parcel. On a side note, before you send any materials to a third-party, your attorney should review each and every document that you produce.

It is important to consult with your CPA as it pertains to funding methods especially for large scale purposes such as owner occupied properties or related real properties. Your certified public accountant will provide you with all of the necessary documentation as it relates to securing a parcel of property, the anticipated appreciate associated with the property, and an applicable loan amortization schedule if it is required by your real estate angel investor.

Additionally, you should always have a property appraiser on hand to ensure that your angel investor understands the value of the property that you are purchasing either for owner occupied usage or for income production. This documentation can be used for soliciting both equity capital as well as debt capital as it relates to your property business.

Angel Investor List Download. No registration required! Includes Free Business Plan Template.

Looking For Angel Investors is a website dedicated to people finding private investment.

Matthew Deutsch is a prominent business plan writer. His work has been included in nine books pertaining to this subject.

Angel Investors and Hard Money

Hard money mortgages are becoming a very popular alternative source of finding among both entrepreneurs as well as angel investors. This is primarily due to the fact that there are very high interest rates associated with the usage of a hard money mortgage that is providing by a private funding source. As the economy is struggling, the demand for high yielding financial instruments is increasing as it relates to investors that have a significant amount of cash on hand. As such, if you or your business is seeking bridge financing, a real estate acquisition, or the purchase of tangible equipment then working with an angel investor to provide you with a hard money mortgage may be in your best interest. However, it should be noted that these loans often come with a number of covenants and caveats and you must be careful prior to obtaining to this type of funding.

Generally, hard money comes from angel investors that want to lend against tangible property. The capital does not require that you give any equity to a third-party investor, but instead are hypothecating a piece of property with the risk that you might loss the asset if you do not make timely payments on your loan. As such, you should work closely with your certified public accountant or financial adviser to determine whether or not obtaining this very expensive form of capital is in your business' best interest. You may find that there are a number of alternatives, including potentially selling a portion of your business to an angel investor, that are less expensive then a high yield debt instrument.

One of the things that you will be required to have as you seeking this type of capital is a well written business plan that showcases the financial results of your business. This is extremely important, especially as it relates to the cash flow of your business, as you will need to show that you can repay the debt financing on a timely basis. On a side note, you should also showcase that you are able to afford the upfront fees that are normally associated with a hard money mortgage or similar debt instrument.

Your business plan and documentation package should also discuss the loan to value ratios that will be associated with the real estate purchase or equipment acquisition that you intend to undertake. A professional valuation provided by a third party expert may be required of you by the angel investor or capital brokerage that is working with you on this specific deal.

In regards to finding this type of investor, most mortgage brokerage and mortgage banking firms have extensive contacts among individuals that specifically provide this type of loan. As such, you may want to approach them first prior to finding a private funding source on your own.

In closing, using a hard money mortgage may be in your best interest if you have the requisite capital to support the very high interest and principal repayments. As always, you and your accountant should thoroughly evaluate this type of capital before making any decision.

Angel Investor List Download. No registration required! Includes Free Business Plan Template.

Looking For Angel Investors is a website dedicated to people finding private investment.