Borrowing Wisely 2
Welcome to Life and Success Management.
We are continuing on the above topic.
Yesterday, I mentioned few "Don'ts of Borrowing". They are by no means exhaustive.
Today, let's talk about few things that will make it easier to win the trust of the potential lender and also give you access to greater opportunities in future. They are things that qualify you as credible to borrow in the first place.
Please note that the context is largely of informal fund-raising.
$ Before you borrow, have a realistic repayment plan. Why? Trust is a very important, endangered species, so to say (especially as touching money matters). Don't miss your opportunity to proof that you can be trusted; write down how you intend to pay back. Is it feasible? It will be a mistake if you are hoping to use the money you lent someone else to repay. It must be from a fairly sure source like regular personal income.
$ Find a source that does not need the money back at exactly the period you know you can repay. (It is important that this extra time should be added to your feasible repayment plan.) It is a proactive way to prevent stressful consequences of lending and borrowing for both parties.
$ Present your written and signed repayment plan to the potential lender. Don't assume there won't be issues because you are friends. Friends have become enemies because of undocumented financial interactions, often because of poor memory or wrongly decoded facts.
$ Minimize risks; borrow in bits and from different sources when possible. This applies especially when you are taking a risk, for example, in starting a new business.
$ Commercial bank borrowing should be your last alternative. They often don't care about you. For them, lending is business. In fact, some are often glad when you don't meet up with schedule because they make more off you that way.
There is much more to borrowing wisely; different context and background applies. But I hope this is of help to someone.
Bye for now.
We are continuing on the above topic.
Yesterday, I mentioned few "Don'ts of Borrowing". They are by no means exhaustive.
Today, let's talk about few things that will make it easier to win the trust of the potential lender and also give you access to greater opportunities in future. They are things that qualify you as credible to borrow in the first place.
Please note that the context is largely of informal fund-raising.
$ Before you borrow, have a realistic repayment plan. Why? Trust is a very important, endangered species, so to say (especially as touching money matters). Don't miss your opportunity to proof that you can be trusted; write down how you intend to pay back. Is it feasible? It will be a mistake if you are hoping to use the money you lent someone else to repay. It must be from a fairly sure source like regular personal income.
$ Find a source that does not need the money back at exactly the period you know you can repay. (It is important that this extra time should be added to your feasible repayment plan.) It is a proactive way to prevent stressful consequences of lending and borrowing for both parties.
$ Present your written and signed repayment plan to the potential lender. Don't assume there won't be issues because you are friends. Friends have become enemies because of undocumented financial interactions, often because of poor memory or wrongly decoded facts.
$ Minimize risks; borrow in bits and from different sources when possible. This applies especially when you are taking a risk, for example, in starting a new business.
$ Commercial bank borrowing should be your last alternative. They often don't care about you. For them, lending is business. In fact, some are often glad when you don't meet up with schedule because they make more off you that way.
There is much more to borrowing wisely; different context and background applies. But I hope this is of help to someone.
Bye for now.
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