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Loans/ Investors

Buy / Sell a Hostel

Rachel Leah started this discussion 6 years 8 months ago

Helo everyone!

MY name is leah, I have posted here a couple times so far. My husband and I are looking for property to buy in Central America ( prefer to keep it secret unless we talk more) and are going to have a look at some places in the next couple months. I would like to ask advice for those out there who are experience with taking out loans. I am from the states and my husband from portugal, but I now also have a bank in Portugal. Would anyone recomend certain countries/ banks to ask for loans. Can anyone recomend the best ways to look for investors ( particularly silent inevstors) or know of any great websites to research. Thank you very much, greatly appreciated.

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Rucksack Brian

6 years

Hi Leah,

I asked banks in the US and in France (Huntington and BRD, respectively) if they would be willing to give loans for a hostel business in another country. In both cases I was told that as long as I can demostrate that the business plan is solid and that I can pay the money back, then they didn't care where the business would be located. (I didn't end up applying for a loan with either bank)

On the contrary, the SBA told me that they definitely would not get involved in the loan process for a business outside the US. They would, however, connect me with a business mentor to help me get my plan in place so I could try on my own.

Have you already crunched some numbers to know what your investement, operational costs, and potential profit might look like? Looking for a silent investor (rather than a partner who would want/be expected to help run the business) is going to require having your numbers in order. Essentially they would put money in, and in exchange they would expect to receive their money back plus pre-agreed interest within an established period of time. Before you could start that discussion you will need an idea of how much you think you could make and how much you would feel comfortable promising an investor.

To find investors you could look into "angel investor networks" in the US, Portugal, or wherever you would want to open in Central America. You could also go to local business networkng events and mingle with other startups, professionals, investors, or whoever else shows up. Start telling people about your project and see if anyone gets intreagued enough to jump onboard.

As much as it is usually considered a bad idea to mix family and friends with business, they are probably a good place to start. They're the most likely to believe in you at first. It gives you some good practice giving your sales pitch. It builds confidence if they do slide some money your way. And it shows other potential investors that other people already believe in the project.

I don't know if they will help in your specific case, but here is an older thread on possible sources of investment, and another on constructing your sales pitch.

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theworkingcouple

6 years

Hello @rucksack brian , thank yo so much for all of this detailed information. We have thought already about reaching out to family, and are borderline with how we feel about it. We have also been in great discussion already with potential business partners, but my worries are clashing with ideas. I am very passionate about my ideas and exactly how I would like to run the place, so I have been looking more for a " silent partner" or " silent investor." I have my business plan started out, but the numbers are still not finished, as we have been deciding between two different countries. That is actually my second question, if there are any websites or groups out there that offer help with business plans/ financing and accounting.

Thank you so much for all this, great help!

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Rucksack Brian

6 years

We have also been in great discussion already with potential business partners, but my worries are clashing with ideas. I am very passionate about my ideas and exactly how I would like to run the place, so I have been looking more for a " silent partner" or " silent investor."

You should thoroughly screen any potential partners to ensure that they would be compatible with your vision. Unless you are settin up your business purely as a financial venture, (and I don't think you are) then you will probably think of it as your baby. Someone might come along with all the money you need to make it happen, but if their values, priorities, business ethic, or desired outcome don't match your own, you could be diving headfirst into a nightmare arrangement. If you're excited about your ideas and doing things in your own way, then only work with partners or investors who are excited about your ideas and your way of doing things.

On that note, decide if you're looking for a partner or an investor. An investor will usually take their money and leave once their investment is paid back with interest. A partner will have a share in the company and a say in how things operate, even if they are supposed to be a "silent" partner. They will always be a part of the business, for better or for worse. If you want to part ways, you will probably have to buy their shares from them or find someone else to buy their shares.

That is actually my second question, if there are any websites or groups out there that offer help with business plans/ financing and accounting.

Try contacting the Small Business Administration and getting connected with a business mentor. They can connect you with someone in your area who can sit down with you and talk about how to develop your plan. For free!

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