So we had to pay for all our stock up-front, days and even in some cases weeks before the bicycles arrived in our shop. Inevitably, we never had enough cash available to buy the quantities of bikes we needed to stock in order to be successful. All we were really doing was playing on the margins, so to speak. Eventually we reached the point where
the only way we could ever hope to expand our business was either to try to get increased credit at the bank, or beg or borrow money from our friends and relatives. I decided to do both. Initially I approached some family members who knew how hard we were working and could also see the potential in our business. They readily agreed to lend us some working capital. Next stop was our business bank manager, who after
looking (or should I say poring through) our cash flow forecasts agreed in principle to lend us the money, with the proviso that we offer our house as security for the borrowing. I’m going to ask you a question now, assuming of course you have a home with some equity in it: would you offer the roof over your head as security to your bank to support your business venture? Difficult isn’t it? Dare you risk everything, or stay on the margins playing at whatever it is you’re planning to do?
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