Resource
Business Funding
Getting funding for your business now and in the future requires a plan. Luckily this plan is fairly simple. It starts with us teaching you strategies that the banks prefer that nobody knows about! With these strategies properly implemented, your business will have the money it needs when it needs it the most!
Don’t get stuck in a position where your business needs money and you have to scramble to try and get it. In this scenario, your options will be in the favor of the banks and lenders rather than yours. Let’s flip the script on the banks and lenders and give you and your business the upper hand!
Money Mindset
We have found that there are three different types of mindsets people have when managing money. Their habits and patterns in these general classifications are very telling, and we can learn best practices from analyzing their characteristics.
Which mindset are you? Spender, saver, or investor?
The Spender
Spenders make money from their jobs and rarely ever work for themselves. They borrow money from banks or really anyone they can, and tend to make poor decisions with the money they make or borrow. These people are all about buying what they want now to receive the instant gratification of a lifestyle they technically cannot afford. They buy houses, vehicles, vacations, clothes, etc that are outside of their means.
Spenders are a perfect target for banks.
Banks love the idea of people borrowing money from them and having the belief that they're going to be able to pay it back within a relatively short period of time. This is why banks will offer potential borrowers 0% interest credit cards– so the borrower or spender can have the instant gratification of having the things they want now all while believing they can pay it off before that 0% interest rate goes away.
This concept makes banks very successful at making money. The spender believes that they'll have plenty of time and ability to pay the money back, with that enticing 0% interest rate. They will buy things they don’t need–clearly using credit cards incorrectly. They can quickly fall into the bank’s trap.
But the spender is happy in the beginning because they get to live the lifestyle they want! They typically don’t regret it until they find themselves in a situation where high-interest rates have made their lives stressful– because statistically, the vast majority of consumers or spenders do not actually pay the bank back before the 0% interest rate goes away. By this point, the poor spender ends up back to paying interest, struggling to make minimum monthly payments.
They're the perfect candidate for banks to trap into using credit cards for all the wrong reasons.
The Saver
The saver is someone who is very conservative and paranoid about spending or investing money.
It should be noted that there's nothing wrong with being a saver. At least, most savers reach a point where they can achieve minimal, humble retirement for themselves.
Most savers work for somebody else–they choose the conservative route. They plan out their life based on their current income, they save their money in traditional vehicles such as 401k’s or IRA’s, or build their tenure with a pension. Again, there is nothing wrong with this as long as they’re ok with never truly reaching a higher level of financial freedom.
The saver typically shys away from borrowing money from a bank unless it's for a mortgage to buy a home. Upon obtaining a mortgage, they will often apply multiple monthly payments towards the mortgage to pay it off sooner than the required term. Savers are very fearful of debt of any kind and have a hard time understanding the difference between positive and negative debt. They will not allow themselves to get into debt for anything other than necessities.
It's fair to classify a saver as having analysis paralysis, meaning they overanalyze.
They don't want to take any risks, and therefore seldom ever do. They avoid making investments that are not traditional or are directed by a bank or financial advisor.
Savers rarely use a credit card. If they are going to use a credit card, it'll be to purchase products, gas, groceries, and maybe meals out to eat. The savers' logic for using a credit card is usually to only get points from their credit card company for what they spend. They have the discipline to use them to get points only, and then pay them off each month. Their credit utilization rarely ever exceeds 10-15% of their limits. This shows great discipline and prevents them from being trapped into debt, but doesn’t give them the opportunity to use them to make money or help them progress towards financial independence.
What's interesting about savers is that most of them want to be more like an investor. Most want to have financial independence. They just don't have the ability to take the steps or risks that it takes to become that person.
However, a saver is the best person to help change and possibly convert to an investor. They have the best chance because they've already established the skills, structure, and discipline necessary to become an investor.
The Investor
Investors view and manage money as a tool to make them more money: money is simply an opportunity. They will use anyone’s money to make money as long as using it makes sense.
What will probably surprise most people is to know how frequently investors borrow money and use that money as an instrument to make more. We've all heard the expression, "it takes money to make money." This is a fact of life, and an engrained lifestyle to investors! They don't live in a fantasy world believing that something is drastically going to change without them doing something to change it. An investor takes control of their financial future by recognizing investment opportunities and then using money at their maximum capacity to take part in these opportunities.
Obviously, the superior mindset is the mindset of the Investor…starting to understand why?
Because investors look at money as an instrument, it becomes much easier to not overanalyze. The investor is able to take emotion out of making decisions. They can do this because they know that emotion doesn’t allow them to make wise decisions, but rather puts them into a situation to make a wrong decision.
Investors take risks, but more importantly, successful investors take calculated risks!
Let me be clear…we aren’t advocating you to take unnecessary risks. We want to educate you about how investors look at money. They view money made or money borrowed as simply an instrument to achieve what they want-–more money, financial independence, and financial freedom.
Investors use 0% credit cards as an instrument just like any other money they can gain access to.
They view them as an incredible opportunity because they realize the opportunity to use anyone’s money, let alone a banks’ at 0% interest, is rare and they take advantage of this tremendous opportunity. They are able to expose the loophole that banks have created to try and trap consumers and spenders into debt by offering 0% introductory rates.
Banks offer 0% interest rates for at least 12 months and sometimes 18 months or longer. This opportunity is too good for the investor to pass on. They plan to use this money at 0% while they can, invest the money in an opportunity or business that will make them money, and as the 0% interest rates are expiring, they strategically pay the borrowed money back and have therefore successfully used the cheapest money they can borrow!
They recognize that borrowing money at 0% interest rates through credit cards is in reality a very logical strategy. This requires understanding how this strategy works, and learning how to play the credit card game.
Step 1 in "The Credit Card Game"
What you first need to understand is there is a big difference between credit scores and credit profiles.
To help explain this, let's use an example of 2 people with a 750 credit score who both apply for 0% interest credit cards at the same time. Most people think that inevitably these 2 people with the same credit score will both get approved for the same amount of credit limits.
This is not true, and you need to know why!
If one of these applicants has a 750 score and they show that they have never used more than 20% of their available credit limits on credit cards in the past, the limits they get approved for will certainly reflect that–and be much lower. If the other applicant with the same score applies and they show in the past that they utilized 60-100% of their credit, but now currently they’re using under 20%, then logically a bank will approve this applicant with higher credit limits.
Logically, banks know they would prefer to issue higher limits to an applicant who has a higher probability of using more of the credit than the other applicant who shows historically they are unlikely to use very much of their credit limit.
Investors understand this because they know and accept the ebbs and flows of borrowing money this way. If they get new cards with 0% interest rates and now utilize 50%+ of that money to invest, they recognize that temporarily that will lower their credit score. Why? Because when banks see an individual using 50%+ of their available credit they want to temporarily prevent that individual from being able to get more credit while that much is being utilized. Banks know that this protects them and minimizes their risks.
The investor mindset realizes that this happens and is ok with it happening. They know that it’s only temporary, and that they will be using the bank’s money only while it is at 0% interest.
They also know that the act of using the bank's money will strengthen their credit profile, because the activity on the new credit card will be reported to credit bureaus.
If it shows at one point they were using 100% of their credit limit, but now they are using 0% of their credit limit, investors are viewed as a rock star to banks. It’s very rare for someone to at one point have been using 100% of their credit and then successfully pay it back. Investors realize that the act of using a bank's money to make them money not only benefits them, but also simultaneously strengthens their credit profiles and scores. They know the facts and use this knowledge to their advantage, which allows them to eliminate the emotion of making decisions and allows them to operate on logic.
We hope this information is of value to you.
It is important to understand that banks and lenders try to get you to believe what they want you to believe. They will steer you in a direction that is in their favor, not yours.
If you see the logic in the way that an investor looks at money, it may be time to take your first step towards doing what they do: ready to get started?
Schedule a time to speak to one of our credit advisors.
After helping our students begin to change their mindset, it becomes even more important to establish a plan especially for each of them. Every business is different, and they need money for different reasons. It is imperative to craft a tailormade plan that will ensure your business has the capital it needs to maintain and grow.
This process gets exciting because it allows us to help each of our business owners build a foundation to establish true business credit under their business name.
What is true business credit?
True business credit is when your business can go to a lender and obtain loans or any type of financing that is guaranteed by the business only, and does not require the business owner or owners to sign personally or act as the guarantor for the business.
In order to progress towards building the foundation of true business credit, schedule a time to talk to one of our credit advisors….
What is the best day and time to schedule an appointment?