You’re growing your Amazon business and feel pretty good about it, but you realize to really kick-start your growth, you need additional capital.
Every successful Seller arrives at this juncture at some point. So you look at the various options and start comparing interest rates, repayment terms, and actual payments (which may have nothing to do with the rates).
You get a copy of your credit report to see if you’d even be considered and then you must consider carrying debt on your business and it weighs on your mind.
After all, business debt typically comes with a personal guarantee – trust me, that can absolutely keep you up at night!
You’re smart, so you build a chart and try your best to compare options and boom, you found the best one. Yay! So you dig a little deeper and learn the payments are not monthly, but every 2 weeks – Ugh! Back to the drawing board.
But wait, your significant other suggests you call your rich relative... you know the cousin, aunt, uncle or grandparent you know has more money than most.
You understandably don't want to mix business with family because the next barbecue or Thanksgiving dinner could get a bit awkward. But, what if you could design the ultimate terms in a perfect scenario what would you want from your rich relative assuming
you could outline a fair offer?
It should be better than a loan since they are ‘family’, right?
Here is what you might request:
Interest rate: None – I hope he agrees with: “Neither borrower or Lender be”
Monthly payment: Not required – I want the money to grow, not to make payments. That would be a waste!
Personal guarantee: None - I cannot allow a mistake in my business to hurt me or my family.
Equity in my business: None – It's my business and do not want to give up permanent equity.
Profit share: Yes, this way my rich Uncle also benefits. He would get a percentage of profits based on the amount of capital he provides and really only wins when I win. If the business is profitable then he is profitable. I want his incentive to be to help me:-).
Profit share II: I want his profit share percentage to slowly decline as I grow because I am running the business and one day will not need his capital.
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