3 Reasons Why Texas Private Money Lenders are Better than Crowdfunding

Friday, March 8, 2019

3 Reasons Why Texas Private Money Lenders are Better than Crowdfunding

Crowdfunding has surged in popularity and certainly has its place, but it’s not always the best choice. Learn why working with Lender may be the better solution for your situation.

Recent changes to crowdfunding legislation have made it more popular than ever. Whereas in prior years, only the wealthiest could invest, nowadays almost anyone can, though the maximum amount people who aren’t wealthy can invest is still somewhat modest. It may be tempting to go this route because of its popularity, but it’s important to evaluate each potential funding solution and make sure it’s a good fit for your project before jumping in.

1. Equity crowdfunding means giving away part of your company. If you’re genuinely ok not being the sole owner and don’t mind answering to your shareholders, that’s one thing. However, if you’re starting a business you plan to manage for years to come, or perhaps even a lifetime, giving up your stake in it can be a drastic measure. With Texas Private Money Lenders, your business and your assets are yours, so long as you fulfill your financial obligations.

2. Regular crowdfunding works better for tangible goods and brand-building. If you have a product you want to sell and are hoping to build up a loyal fanbase before launch, traditional (non-equity) crowdfunding can help in both areas. Plus, it doesn’t require that you give anyone stock. However, if you’re doing something that is a one-off project or involves a service, crowdfunding doesn’t work particularly well. Many other forms of lending are better suited for these situations.

3. You may be at the mercy of the platform’s (and its affiliate’s) policies. Let’s say your new business is a special type of gourmet chocolate and people are flocking to support you. That’s great, or maybe not so great if your product has CBD in it. Unfortunately, businesses are still wary of working in specific industries—this is only one example—there are many. If the platform takes issue with you, they’ll cut you off. If their payment processor or bank takes issue with you, they’ll cut you off. If they have advertisers on the site who take issue with you… you get the idea. They can cut you off virtually anytime they wish and for almost any reason. Read their contracts.

Alternative Funding is About Creating a Win-Win Solution

These issues don’t exist when you work with Texas Private Money Lenders because they learn what you’re about from the onset of a project. While it’s true that some don’t like to fund specific types of projects, there are others who prefer it. Your broker will make sure you’re matched up with someone who believes in your business plan every bit as much as you do.

When you understand the benefits of various funding solutions, a clear winner will emerge.

Just like crowdfunding isn’t right for every situation, working with Texas Private Money Lenders may not be ideal for every time either. However, if you need a short-term cash injection for your business quickly and don’t want to give up equity, talk to a broker to learn more about alternative lending.

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC
Hard Money Lender
Hard Money Loans
Hard Money Loan
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com
Dennis Dahlberg Broker/RI/CEO

About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 43 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.