A surety – walking around like a zombie in this economy

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Taking out bank loans for a businesses, property development or other ventures, can make you feel like a zombie in this economy when you realise how much control you have given to your bank to seize your assets if something goes wrong.

A business person told me recently that with the negative economic news and forecasts he felt even more afraid about his bank loans where he has given surety on his family house.

It must be terrible. Sales declining, projects lost, scratching for business. And you’ve got bank loans hanging over your head. No wonder he’s afraid.

But many people buy into the notion that entrepreneurs are fearless risk takers and can tolerate high levels of uncertainty. Yes, maybe there are some like this but most “normal” business people have their feet firmly placed on the ground.

What do you do about avoiding bank sureties? What other forms of finance are there are there for the entrepreneur or small business owner? The business advisors are short on giving a clear and specific answer. I’m not going to venture to say where to look for capital except to point out that today there are many alternative forms of financing available – just take a look on the Internet if you are interested.

Remember one of the largest supermarket chain stores in South Africa began when the owner needed to expand and went cap in hand to friends who provided loans to take a share in the business that got it up and running.

In today’s ruined economy, high tax regime and choking bureaucracy, it pays to think critically about sources of finance, which essentially translate into accumulated debt, that possess the risk of asset confiscation.

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