Lesson 2
- How to Raise Money Abroad
by Gary Scott
This message is the second lesson of a course
on how to start your own business for a never-ending source of wealth. This lesson
covers how to find overseas investors and clients abroad. You can read lesson
one here
You can build a small business financed by overseas
investors and through cash flow. This has always been Merri's and my approach,
and in early the days of our business I found myself raising extra capital several
times. I have also helped numerous businesses raise money to get started. This
report shares several experiences to give a thumbnail sketch of how to raise money
abroad.
There are two benefits from knowing how to find
overseas investors independently. First it gives you access to capital if you
need it. Second the process of raising capital from overseas investors is similar
to getting customers so this report can help you gain clients as well as seed
money from around the world.
Financing a London House through Overseas Investors
This first lesson reviews the importance of
flexible thinking in your efforts to raise startup cash through overseas investors.
I learned this importance in my attempt to finance a house purchase in London
with overseas investors. My business plan was to create a small office-apartment
complex and the process of getting started taught me the importance of being creative
to get overseas investors.
At first I stumbled when I started asking overseas
investors for the money to buy this house. But with luck and flexibility I was
able to get the deal done. The search for cash from overseas investors began at
a friendly bank who had lent to me before.
While there I learned how policy-oriented such
institutions are. Whatever drops down from the corporate headquarters above, is!
The deal I had put together was aimed at helping overseas businesses people have
an office and a place to stay when they were in London. The deal was set up as
a club something like a timeshare. Not quite a timeshare but close enough.
My track record with the bank was good and I
had always repaid loans. Yet the policy at that bank was "timeshares are
no-nos". I could almost see the glaze come over my bank manager's eyes as
I explained the project. It was the look that said "No matter what you say,
the answer will be NO". Once a manager thinks that what you want is against
company policy, it is better to do something realistic like climb Mount Everest
on a lunch break. I come from a family of modest means and had no relatives or
friends with the cash to start the deal so my alternative was to find overseas
investors.
After making the necessary polite motions [I
figured I might want to borrow for something else later] and letting him do likewise,
I thanked my bank manager for his time and was preparing to leave. I wasn't even
going to ask him to officially write and say NO. I knew he was going to say "No"
before I left his office.
But as I started to leave he said, "By
the way let me show you our new American Express Gold Card plan". The bank
had just started to offer credit cards and they came with a 7,500 pound unsecured
overdraft. He told me that overseas investors could have these as well as local
investors and customers.
Overdrafts are a peculiarly British line of
credit that allows you to borrow up to the limit of the overdraft without any
regular payment plan. The banker sort of expects to see the amount borrowed rise
and fall. The borrower just pays interest on whatever amount is owed and on occasion
the bank reviews the overdraft with you.
At that time one pound equaled about 2.2 dollars
so this meant that everyone who obtained this credit card received a $16,500 dollar
unsecured line of credit. $15,000 was the amount I was charging each member who
joined my London office-apartment club! I immediately saw how to use this to attract
overseas investors.
I wanted 50 members at $15,000 each which was
double the $375,000 I needed to buy and develop the property. I saw how to turn
my customers into my overseas investors.
My head was spinning as I left the bank. The
bank would not give me a $375,000 loan secured by property. Yet they would lend
my buyers of the club the full price of membership on an unsecured basis! All
I needed was get half my buyers right now on a nothing down pre -purchase deal.
This is exactly what I did. My customers became my overseas investors.
I hustled out, called my customers and offered
them this deal they could not refuse. "Join our club now and you get an American
Express gold card. The bank will lend you the money unsecured for your club membership.
Pay it back when you can." That was a deal that few overseas investors could
refuse.
This was a much better deal for me than borrowing
the money from overseas investors to start. The original 25 sales were financed
by the bank. My customers had to pay the money back, not me.
From that time forward whenever I think finance,
I look far beyond just making a loan from overseas investors. There are numerous
ways to skin the "start-up capital" cat and whenever you can do it through
sales instead of loans from overseas investors, you are better off. You may be
able to obtain credit from suppliers or let your buyers use their credit to get
you what you want.
Lesson
3 looks at a financing sources via overseas investors where apartments
are turned into cash!
You can increase profits, enhance security
and have extra tax and asset protection. Turn your passions into profit. Start
your own international business now! Learn how to raise money abroad.
Find out more about our complete course
International Business Made EZ at Garyascott.com
Sometimes
one picture is worth a thousand words
Global Business expands your horizons
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