Get a Better Rate for Your Small Business Loan from Virgin Money
Why pay a bank 20% to borrow money on credit cards when you can borrow from your family for much less?
This is the question that prompted Sir Richard Branson to create the peer lending company, Virgin Money. Branson had a personal run-in with a bank when trying to find startup money when he was a young entrepreneur.
“I wanted to build a recording studio and I went to the bank and they wouldn’t lend me the money. So I rang up my aunt and said is there any chance of you doing a second mortgage? She said yes and as a result of that loan the Virgin empire was created.”
Branson has a history of starting up new business models across a multitude of industries so it’s no surprise that he jumped into the peer lending arena as the market really starts to take off. He’s looking forward to helping out new business owners who would have put thousands of dollars on their credit cards at high interest rates to fund their new businesses. Instead, Branson hopes they’ll be able to borrow money from family members at a much lower rate and keep the money in the family.
In addition to the denial of credit for his initial business loan, he’s had other bad experiences with banks in the past that have left him wanting an alternative. The day he launched Virgin Airlines he returned to his office to find his banker threatening to foreclose on the whole company after Branson slightly exceeded his credit limit. Obviously that didn’t happen since Virgin is still up and flying today but it left an impression on Branson.
In 2007 he purchased a peer lending company named Circle Lending with the goal of empowering lending among family members. His hope is that the new Virgin Money US will provide people funding alternatives to high interest rates and pushy banks. If you’re paying high interest rates on business capital or any kind of loan and a family member might consider helping you out, heed the new company’s slogan and “Go Fund Yourself”.
Source: Money.cnn.com: Richard Branson launches Virgin Mobile & recalls his start as an Entrepreneur
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