Using loans to fund your web business?

Managing cash flow is a problem for everyone, especially people starting out, but even for people who've been in the game for a while. I've been playing around, learning about different ways to get funded. IMO, the most accessible (after self-funding of course) is doing small loans. You can use credit cards, you can use banks, but I'm looking particularly at newer, 21st century, ways to fund your web business.

Prosper.com is a copy of Zopa (which is only available to people in the UK). Since I'm USA based, Prosper.com it is. I've joined up, and am testing out how it works. I've created a prosper group for anyone else who'd like to see how it works. I see quite a variety of uses for it. See a website for sale that you'd love to buy but don't have the cash handy? The site seller wants 15 months revenue, the loan is spread over 36, so you should easily be able to make the loan payments and have something left.

I'm open to comments on it, and would enjoy hearing from anyone who'd like to give it a whirl.

 

I wont recommend it, why? because web business is 50/50 thing either it work or it doesn't. If you have an idea which would be loved by many I.E. Google then don't think twice.

 

Small business micro loans are a great thing also. I have seen a lot in the news about them. Kind of the "pay it forward" school of thought.

 

Taking risks isn't for everybody, for sure.

 

Yep, and I think this format has a lot of potential for people who are really interested in buying a small site, or building a small site, and lacking in the resources to do it.

 

I have coveted some of those 12-15 times net earnings sites because they seem terribly undervalued for a buyer who knows what they are doing. I have also been down the high leverage real estate road and one of the things I really like about websites is the mostly cash basis for everyting.

 

Thanks for the comments. I do think that if something like this catches on, it will cause some dramatic changes here.

 

Hi Peter,

I have looked at Prosper.com too. Their rates are a little high so I am doing great with my low introductory rate business credit cards, one of which offers zero percent financing for the first twelve months.

I am less risk adverse then I used to be, perhaps because I have set things up so that my business is in debt while my personal stuff is not. Eventually, I would like to find some outside funding beyond the cards, so I may once again check out Prosper to see how they do.

Regards,
MattK

 

Yea, I've used credit card funding myself, on a number of occasions. If you can pay off the card while you have the intro-rate, great. If you can't, I think this offers a good alternative.

 

prosper is a good site

 

Do you have any experience with it?

 

i'll have a look into this fnx

 

Since you're in the UK, you'd need to look at Zopa. Let me know what you think of it, I haven't really looked very closely at it.

 

Yeah i'm on it right now, theres online quote system. and to be honest it looks decent. Not sure if i'd be able to get one though as im 18 and currently unemployed

 

Yea, they'd likely want to know how you're going to pay off the loan. I'm not sure how they'd deal with this type of income.

 

Yeah most likely, but definatley something to look into for future projects thanks for the link

 

If you do ever give it a try, I'd be curious to hear how it works out for you.

 

I'll let you know, probably be next year as im moving house and will be job hunting - untill then relax and work from home hehe

 

No guts, no glory.

 

Taking risks is good, and as you said the best thing to take out a loan for is to buy an established site that you know will get you your money back + interest in about a year and a half.