Almost no one is lending out money right now. Or, to be more
accurate, no banks are lending out
money right now. Indeed, in the midst of the ongoing credit crisis the huge
banks that normally provide the necessary financial lubricant for our economic
engine are too afraid to make loans because they are too scared that they won't
be paid back. Where's an upstart small
business owner supposed to go?
Well, if the banks aren’t an option, perhaps the people you know are. After all, the folks who know you well are theoretically best suited to know if you will and can pay them back. The thing is, not everyone is comfortable or good at asking people they know for money.
That's where Virgin Money comes in. The company has already helped individuals and small businesses get more than $300 million in loans from people they know by formalizing the loan process. So instead of just looking your uncle straight in the eye and uttering the words "trust me" in the most reassuring way possible, you can actually have a real and legal process in place to make the loan seem credible.
Now Virgin is starting the "Show Us Your Ask" contest which invites small businesses and individuals to submit videos that show off the most creative ways to ask friends and family for a loan. As a small business owner myself, I think it would be fascinating to see how others went about this not so comfortable process. And as credit dries up in traditional channels, this might be something more and more of us might need to get good at.
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