Thursday, July 28, 2011

Pique a Peer Lender's Interest

Interested in peer-to-peer lending? If so, here's some advice on how to pique the interest of a peer lender once you decide to use a particular peer lending network. (For information on peer-to-peer lenders, view my previous blog post, Top Five Peer-to-Peer Lenders.) According to an article on Inc.com, " Once you’re approved on a peer-to-peer site, it’s all about “putting yourself in the shoes of the lender,” Gass says. “The first thing I would look for if I were lending is anything that would lower my risk, and that comes down to things like the borrower’s experience—there has to be something that says you’re not just a dreamer." "

He's saying what I repeatedly state: You must understand the investor or lender mindset and what they're looking for in order to package your company and your "opportunity" accordingly. Remember, investors and lenders are not social entities. They do this to make money for themselves and/or their companies.

The article, "How to Attract a Peer Lender" goes on to say, “You have to create an ad that tells people why they want to invest in you”. The more specific you are, the better. I just had someone seeking assistance with finding investors for a start-up send me a 1-pager, then increase it to 2-pages. The entity was pre-revenue. There were so many vague comments and suggestions like, "This product is intended to be a standout in the xxx arena. It has no true competitors." That is an example of what NOT to put. EVERYONE has competitors, even if it's an in-house product or service. And who cares what it's intended to be. What IS it?

The article continues, provide "an overview of what you’re planning on using the money for and how your business is running." The former is called 'Sources and Uses of Funds'. The latter is simply a snapshot of your business and market.

More article excerpts: “The description of the business is going to be more of an influencer.”

 

' “Think of it as business plan: Write out what you’re trying to do, and show that you’ve done your research,” she says. “The way you present yourself comes across over the Internet. Be straightforward, none of this ‘my mom thinks I’m the best kind of stuff’—just be credible and honest.” '

I couldn't have said it better myself!

(Read the article, How to Attract a Peer Lender, in its entirety.)



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