College has Become a Business Loan Collateral

College has Become a Business Loan Collateral
College has Become a Business Loan Collateral
May 27, 2016

There are different reasons why people attend college, just like there are lots of course options to choose from. Parents always encourage their wards to get a college degree since it ensures some kind of social integration, creates some kind of exposure which is necessarily for mental maturity.

Pathetically, people go through college learning every other sphere of life (from laboratory works to arts and science and management) without learning what is most vital as far as our society is concerned – which is the process of making money. That is why many people graduate from college and find it difficult funding for themselves.

Read also: Merits and Demerits of Purchase Money and Non-purchase Money Loans in Short Sales

The vitality given to college was demonstrated in 2013 when students of Cooper Union walked peacefully into the office of the president and occupied it for the next 65 days in protest of the decision by the school to make students begin to pay for tuition. To them, this would force many students to drop out of school.

The problem with starting small businesses

The major problem with starting a small business is – it is hard to get funding for startup. Virtually no one, including commercial banks would be willing to stake their money with you, even with the best business proposal. Most of the banks would require collateral tantamount to the intended borrowed amount.

Read also: A Cash Business Loan might Just be Perfect for a Working Capital

Sourcing for funds to start your business

Getting funds is always a herculean task as far as startup is concerned. However, all hope is not lost if your passion drives you to owning a business. There are still modest and simple ways to source for funds if you have a strong business plan and projections.

1. Angel Investors

There are people who are known as angel investors. These set of people are grouped under high risk takers. When you bring your business plan to them, they look at it and if they deem it fit, they give you the money to kick start the business on the agreement that a certain percentage of all business profits will come to them. Angel investors are not everywhere but a little research will help you find one.

Read also: What You Never Knew about the Small Business Administration Loans

2. Commercial banks

This remains by far the financial institution where many people run to for aid. Some of the things that may be required of your to present besides your business plan will include; credit history of business and person, financial statement of project, cash flow predictions and guarantees.

The above requirements can be easily met by some but what about those that cannot? The bitter truth is that if you can get a few of them, it still puts you at par with someone that cannot because most financial institution would require all of them before they would agree to your request.

Put your college certificate to the test

There are still financial institutions that would accept the originals of your college certificate as collateral for lending. Owing to the strong importance attached to these certificates, these financial institutions are ready to give out loans on certificate basis with the prediction that the importance of the certificate will make you pay up.

Read also: Looking for Ways to Finance Your Company: Try Asset Based Lending

Article highlights

  • Securing a loan to start a business if often very difficult.
  • Banks are the most popular lending financial institution.
  • Angel investors are high risk takers.
  • With a good business plan, you can attract an angel investor.
  • Much emphasis is laid on college degree rather than on making money.
  • College creates an atmosphere for mental maturity which every child needs.
  • There are various ways you can source for funds.
  • Cooper Union students stages a sit-in that lasted for 65 days to demonstrate tuition.
  • Banks usually ask you to bring; credit history of business and person, financial statement of project, cash flow predictions and guarantees.
  • Your college certificate can serve as a loan facility.

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