Collateral Based Loans (TFM 6)

So, yeah. And, you know, Chris, another one could be, you know, even like going into something like collateral loans. I know there's collateral loan companies out there. You know, if you have tools, tools work really well, like, you know, construction-wise, like materials that people would use for labor. Tools work really well.

Cars work really well. You know, just any type of – I know I had a guy on the team that had, like, some parachute gear, different types of gear for different types of, like, you know, extreme sports. And these are different things that could be kind of thrown in the mix. You know, it kind of forces the person that's raising the capital to put their – you know, put some stuff on the line. You know, have some stuff out there that they can potentially lose if they don't have the capital.

If they don't have the commitment, they don't have the conviction, they don't have the energy going out there in the business to make it happen to pay their investor back. It also makes the investor feel more comfortable a lot of the times. So, collateral. Okay, so collateral. So, everything we've been talking about so far with getting loans or borrowing money from people, it helps sweeten the deal if you have some sort of collateral to put down.

So, Arthur's – let's keep running with this, Arthur. Let's talk about collateral loans for a minute. Some of the big pieces of collateral you could put down, are if you own your car free and clear, even if it's a very, very, very inexpensive car, okay, you could always put up the title as collateral. So, okay, so hypothetically speaking, you've sat down with somebody and you presented an idea for them to be a funding partner or investor, whatever you want to do, a friend or family member, whoever. And now, to sweeten the deal, the end of your pitch or the beginning or middle, wherever, you could say, all right, now listen.

To reduce – To reduce the risk on your side. I know that, you know, risk has got to be a concern for you. I believe I'm a good ROI, but, of course, let's address risk here. To offset the risk, I have some items that I would be willing to put up as collateral. For example, my car.

I own a such and such. Let's say you own a, you know, I don't know, SUV or something like that. So, you go get the blue book price, and let's say it's a $5,000 car or $10,000 car. Okay, boom. Say I own outright.

I own a $5,000 car or a $10,000 car or whatever it is. I would be willing to put up the title as collateral, okay, just to show you how serious I am. So, if I don't pay back this or I don't fulfill my terms of this deal inside of the next, you know, X amount of time, then I'm willing to put my car up. It means you have my car, which means you take my car, and I don't get my car back until I pay this off. That's how serious I am.

You literally take it, park it in your garage. You hold it from. You hold it from me, okay? And if I want that car back, I pay off the loan, period. And so, if I ever got in that situation, I mean, every single day that went by, I know I got my car sitting in your garage.

You know, that would light a fire under my butt to make sure I did it. So, there's an example, a car, a boat, you know, any sort of high-value item that you might have around your house. We're not talking about $100 items here unless you're asking for a very small loan. If you're asking for a $500 loan or something, then sure, every little $100 thing counts, okay? And think about something that's not going to make your life devastating, okay?

But, you know, some sort of a collateral loan. I'll give you an example, and Arthur, you jump out. Here's an example I saw a guy get a loan with, okay? One of his past businesses was a coffee business, and he had a bunch of these, like, big espresso machines. Now, they were just sitting around in his garage.

So, he literally said, hey, listen, I could put up these espresso machines, you know, they're worth about $7,500. How do you want to put up those? So, he got, like, a $5,000 loan, put up $7,500 worth of espresso machines to the investor. Now, the investor might not want the espresso machines, but the investor knows, okay, worst case, this guy defaults on the loan. I can at least go pawn off these espresso machines and hopefully make back my money or close to it.

So, the investor feels like their risk is minimized because there's some collateral on the table, something that they can do, right? So, Arthur. Arthur, you were coming out, and you were giving just, you know, just a lot of creative things laying around people's houses that they don't realize are collateral. And if they just put their thinking glasses on, there's a ton of things that they could throw into the deal to sweeten it up, right? Yeah, I mean, pretty much anything, you know, anything and everything, you know, silverware, you know, any type of vintage, like, music, records, even books sometimes.

Like, you have a library collection of collections of something. You have, like, a big collection of something. Like I was saying before, cars, you know, if you own a car and you have the title to your car, that, you know, that works well. Even if it's an old car, you know, even if it's worth something, you can look it up on Kelley Blue Book, see what it's worth, and, you know, you can present that. And, you know, gear appliances.

You brought up a great one. Like, kitchen appliances, like, things like espresso machines. Like, I didn't even think of that one, but that would work really well. And then tools, you know, any types of tools, materials. You know, there's lots of stuff that you can put up as collateral.

Pretty much anything that's physical, like, physical things that you own that have value, you can use as collateral. Now, here's a funny one, Arthur. Here's a funny one, right? How many people on this call that don't have a dime to fund their business have a nice TV sitting right there on their wall? Like, a nice $1,000 TV or whatever it is, or maybe a nice sound system.

Now, let me just throw this out. Let me just throw this out there for people. This is just to give you an idea. Are you confident in yourself? See, if you're confident in yourself and your beliefs to go out there and do something big with your business, what if you did something like this?

What if you went to a friend or family member, you gave them a presentation like we just talked about to ask them to lend you money to make something happen, and what if you said, now, here's what I can use as collateral. I am willing to, before you even cut me a dollar, before you even give me a loan at all, I am willing to bring over, on my wall, I'm going to take down my TV, my sound system. My speaker system, everything around it, the whole deal, I'll bring that over to your house, okay, set it in your garage, whatever. That's, you know, $3,000 worth of equipment right there, okay, right off the bat. I'm going to take that off because, number one, by taking away the TV, I'm going to be more focused, and I'm going to be borrowing money from you, so I need to get super focused to make this my top priority to pay it back.

So eliminating the TV, which is actually the electronic income reducer, it's probably a good step in general. So I'll take that. But I like it. I like my TV. I like my sound.

I like my sound system. I like it all. So I don't want to just sell it. What I want to do is I want to take the loan, make money, pay back the loan. I want to get my stuff back.

I want to get back my TV. I want to get back all my stuff. So I'm willing to let you hold on to it until I get that done, okay? How many of you have things like that? How many of you have some sort of a motorcycle or a scooter sitting in your garage?

Now, you absolutely love it. You would not want to sell it. But if you have enough confidence in yourself that you can make something happen, that could be the fire under your butt that gets you going. It's easy to go out there and take massive action. So what if you went and borrowed some money and said, hey, listen, here's my motorcycle.

Here's the title. We'll sign it where, you know, if I don't pay this loan back in the next six months or 90 days, whatever it is, I think give yourself more time. That's always a good piece of advice. But if I don't pay this loan off in the next six months, I don't get my bike. Or I don't, period, I don't get my bike back until the loan's paid off.

So you're holding my bike, okay? That's going to drive me crazy. That's going to be the fire under my butt that I need. Now, listen, I want that bike. I love that bike.

I love going on the weekends. I love taking it for a ride. It's going to beat me up. But you know what? That's going to be the motivation that I need.

I'm willing to temporarily let go of a few things that I love to be able to get myself to the next level, to be able to propel myself to the next level because I'm tired of struggling. So I'm willing to put this down as collateral to be able to help make a loan happen. Now, what you're doing is you're offsetting the risk for the investor while at the same time, you know, lighting a fire under your butt to make it happen. And here's one of the really cool things that I've seen happen a lot. When an investor, when a potential person that can fund you, when they see how committed you are to your dreams, when they see how committed you are to the business and how confident you are that you're going to succeed, you know what a lot of them say?

If Arthur's coming to me with that passion, I might go to Arthur and say, Arthur, you know what? You don't need to bring your bike over. You don't need to bring over a coffee maker. You don't need to bring over your TV. You know what?

I can look at you right now. I can tell. You really want this. You're going to succeed, bro. I can tell.

So you know what? Look, I trust you. Just don't do me wrong. Pay me back right away, bro. I trust you.

I know you're going to make it happen. You know, here's a couple grand. But, dude, take massive action and go get this money back. I'll probably end up just doing that because as an investor, I don't want to take the hassle of having to get into all that. But at the same time, the fact that he was willing to throw all that in to offset the risk shows me he was willing to lose it.

So a lot of investors might not even call you on it. They might not even mess with it. So this whole idea, this whole concept of collateralized loans, find things that you have collateral. Again, if you're taking notes, you should have another section that says, what do I have as collateral? What can I use as collateral?

And list some things and put a potential price tag of what their value is. Their value should be what the investor could sell it for. Not what you think it's worth, but actually what the investor could sell it for. And just think. Get creative.

You know, take half an hour and walk around your house and get creative and just think, you know, what do I have? What do I have? Do I have anything here? You know, a lot of people don't think they have assets because maybe they don't have a lot of stocks or gold or silver. But, you know, you probably do have things around your house that either you're not using or you could do without for the next four or five or six months.

Okay? Take an inventory. Make a list. And now you have some extra collateral to be able to throw into a deal to make it happen.