Clay Clark | The Most Common Forms Of Small Business Financing + The Most Important Things Banks Consider Before Giving You A Loan With David Nilssen

Audio Transcription

So many different times in my life, I’ve played with broken or hurt things, broken foot, broken leg, broken hand, broken arm, broken sternum, broken collarbone. I could keep going if I just thought more about bones. Why, man? Because I loved it. I loved playing the game. I was passionate about it. One of the reasons I even get encouraged at seeing all of you here, you know why I get encouraged by that is because you could be anywhere doing a lot of different things, but you chose to be here Some shows don’t need a celebrity narrator to introduce the show But this show does in a world filled with endless opportunities Why would two men who have built 13 multi-million dollar businesses? five hours per day to teach you the best practice business systems and moves that you can use. Because they believe in you. And they have a lot of time on their hands. This started from the bottom, now they’re here. It’s the Thrive Time Show starring the former U.S. Small Business Administration’s Entrepreneur of the Year, Clay Clark, and the entrepreneur trapped inside an optometrist’s body. Dr. Robert Zulman. Two men, eight kids, co-created by two different women. Thirteen multi-million dollar businesses. We started from the bottom, now we’re here. We started from the bottom, and we’ll show you how to get here. Started from the bottom, now we’re here. We started from the bottom, now we’re here. We started from the bottom, and now we’re at the top Teaching you the systems to get what we got Colton Dixon’s on the hoops, I break down the books Z’s bringing some wisdom and the good looks As a father of five, that’s why I’m alive So if you see my wife and kids, please tell them hi It’s the CNC, up on your radio And now, 3, 2, 1, here we go! Started from the bottom, now we’re here. Started from the bottom, let me show you how to get here. Started from the bottom, now we’re here. Started from the bottom, now we’re here. Started from the bottom, now we’re here. Started from the bottom, let me show you how to get here. Started from the bottom, now we’re here. Started from the bottom, now we’re here. Now we’re here. Super Dave, thank you for allowing me to come to harass you at your great boardroom, my friend. Glad you’re here. Hey, the tour was inspiring. I’m not kidding. It’s like Disney World in there. It’s fun. You’ve got the monitors up there where you manage all the metrics. You’ve got a big open space. I love it. Does it pump you up? Yeah, it’s fun. I like our environment because it’s a lot of good people, got great energy, we do good things. So yeah, it’s great. Awesome. Awesome. Well, we’re going to be talking about the most common forms of small business financing. And this is something that you know a little bit about. You’re not a direct lender, but can you explain to the thrivers around the world what exactly your organization, Guidant Financial, does? Sure. So Guidant Financial, we are a conduit for individuals that want to access capital. So most people, when they’re looking for capital, will go to a bank and apply for a loan and likely get denied and then get frustrated with the process. So what we’ve done is we’ve built relationships with hundreds of capital sources around the country and have some proprietary services that we provide that allow people a variety of ways to access the capital that they need for buying a small business, starting their own or even going into a franchise system. And we’ve been very successful. Over the past 11 years we’ve helped 10,000 entrepreneurs deploy $4 billion into small business and franchising. $4 billion? $4 billion. Wow. Now, before we, if you’re watching this and you’re saying, $4 billion? I don’t even know that word. Billion, that’s a lot. You know, and I’m just starting a small business. How am I ever going to get to that level? I want to give you some encouragement, and so I put together a list of some entrepreneurs that I know of that started in a physical garage. Like, it actually started in the garage mahal. So you have Amazon.com, you have Apple, you have Disney, you have Google, you have Harley, you have Hewlett-Packard, and you have Mattel and Yankee Candle. They all started in a garage. And so you’re dealing with a lot of entrepreneurs who are starting in a garage. I mean, you help people turn their dreams into reality by giving them the, connecting them to the funding they need, correct? Yeah, I mean, our target market are people that are looking to acquire a business or capitalize a business with less than a million dollars. So we’re talking about main street American small businesses. Quick question, if someone’s thinking about calling you though, what’s it going to cost? If I call you, am I going to pay you $500 an hour if you help me find capital or am I going to have to pay an up front fee? How does that work? No, generally individuals pay us based on the type of funding they’re looking to secure and it’s anywhere from $2,500 to $5,000. But it is only based on success. So if we can’t help you find capital, you will not incur any fees. That’s awesome. That’s awesome. Well, we’re going to deep dive now into the 10 most common ways to finance your business. And Inc. Magazine did an article there called 10 Ways to Finance Your Business where they illustrate these. And so what I want to do is I want to just kind of read off the top 10 and then I want to let you add some anecdotal feedback on each one here. Sure. So one is the bank loans. Two is the credit cards. Three is the 401k rollovers. Four is the crowdfunding. Five is the pledging some future earnings. Six is angel investors. Seven is the SBA loans. Eight, family and friends. Nine, microloans. And 10, factoring, where you sell your receivables for cash up front. And what I wanted to do is focus on some of the ones that Guidant Financial specializes in, ones that are right in your wheelhouse. So we can start here with the 401k business financing. First off, what is 401k? Who’s 401k? Is that a droid from a Star Wars movie? What is 401k? Yeah, so the 401k rollover that they’re referring to is really more something that the industry term is actually rollovers for business startups, the acronym being ROBS. So that process is something where an individual can use their existing retirement assets and instead of buying stocks, bonds and mutual funds, they can actually invest physically in their own businesses. So that can come from an IRA, an old 401k that you might have had at your previous employer, SEP IRA, a 403b if you’re a teacher or even a military plan. So if you have some kind of money set aside for retirement, you can tap into those funds and use those to start a business. Yeah, so anyone that has an IRA, we’ll use that as an example, can take that money and invest it in stock. And since we’re in Seattle, let’s use Microsoft as an example. So I can take my IRA and I can send money to Microsoft and in exchange I get to hold shares in Microsoft. They get to use my money to go build and grow their empire. Same thing happens here, except for instead of investing in a publicly traded company, I’m investing in stock in my own privately held organization. One where I’m working in the business and I can directly impact the value and the performance of that investment. And therein lies sort of a deep thought. If you’re going to take money, you could invest in Microsoft to help them grow their empire. And you’re going to take your money out of that and put it into your own business and your own empire. You sort of have to have a strong belief in yourself. Right? I mean, and you said, I said in one of the episodes, you said, if you want to take the island, you have to burn the boats. I mean, you really have to say, I’m done diversifying and all these other businesses, or at least a part of it, and I put it into my own business. Yeah, so here’s what I would say. I would say that is true regardless of how a business is financed. If you are going to be an entrepreneur, you have to have a very, very strong belief in your ability to lead and grow an enterprise. That’s just it. Now, financing it, whether you’re getting a bank loan, investing in retirement assets, using credit cards, you are taking on financial risk. So it is funding agnostic. That belief is something that is more related to going into business, not how it’s financed. So really, I mean, the ideal candidate for this would be someone who has a 401k or some kind of retirement savings, right? I mean, that’s the person who needs to. Yeah. I mean, the demographic profile of someone who typically will use their retirement assets has more than 50k in their retirement plan, is no longer working for the employer if it is being provided. So like a 401k, it has to be after they’ve left employment. Very few employers will actually allow people to roll retirement assets out of their 401k while they’re still employed. So there are a few qualifying factors there, but it is typically for someone who’s had, you know, 10 to 15 years inside of corporate America, now is ready to break free of that and start their own business. And what is the danger of, you know, because I’ve read just enough to be dangerous when it comes to this, there is regulatory, there’s a lot of regulatory things you have to do here. I mean in terms of reporting to the IRS, you can’t just take your 401k money out and start investing in some stuff. I mean there’s a process, right? I mean there’s a system, there’s reporting. I mean you have to seek professional advice to do this. Yeah, so there are both formative requirements and then operational requirements. And you know from a formation standpoint, the individual has to have a corporation, a 401k plan or a qualified plan, but we use a 401k plan. And they have to be investing in a company that is engaged in the sale or exchange of a product or service, which generally is not an issue for businesses. So you must have a corporation. And then what was the second one? It needs to be a qualified plan, and a 401k is a qualified plan. So we set up, in most cases, you’re setting up a corporation and a qualified plan, a 401k. And so what happens from there, then, is the individual, we’re going to roll their retirement assets from wherever it’s currently being held into the new 401k plan. And then that 401k is going to invest in the shares of that corporation. So if somebody wants to pursue this kind of funding, they’re watching this going on, this is it. This is what I need. What’s the first step? They just give you guys a call? Yeah, they give us a call and we walk them through both the like I said the formative and then the operational requirements, make sure that they’re well informed of what obligations they’ll be taking on and then also aware of the services that we provide to them on an ongoing basis to ensure that they’re accurately reporting on the 401k plans activity as you referred to a minute ago. And then once we go through that educational process, the client then with their own advisors has to determine whether or not this is a funding method that they want to pursue. Are there other businesses that do what you do out there? Are you the only? As I’ve looked up what you guys do, I mean, you clearly are the leader, one of the leaders. Is there other businesses that do this kind of thing too? There are. Yeah, I mean, I think like with any category, there are many players that play in this space. There’s Bank of America and Wells Fargo. They compete. People know who they are. We are the largest provider of rollover for business startup arrangements in the country. But there are other companies that do what we do. There’s probably a handful of those. And it’s a category that’s growing in interest and more and more people are utilizing this as an opportunity to invest in small businesses as opposed to publicly traded companies. And so as that category and awareness expands, more people are coming in all the time. Now the next area I want to focus on is these portfolio loans. On your website it talked about this, I’ll just read the definition on the site. It says, securities-based lending allows entrepreneurs to borrow against their personal stocks, bonds, and mutual funds without selling them and use the proceeds as business funding. It sounds simple enough, but I think there’s a few intricacies there. Can you tell us a little bit more about what that’s all about? Yeah, so we’ve partnered with a major securities firm in order to provide these types of services because we we are not licensed brokers. So the portfolio loan essentially allows an individual to take a loan against securities that they already have today without actually selling them. I’ll give you an example. If you owned a home outright today, you had no mortgage on it whatsoever, you owned it at 100 percent, you could go get a home equity line of credit against that property. You don’t have to sell the property, but you can take debt out against the value of it. A similar method is happening here. If I have a hundred thousand dollars in my personal securities portfolio, so I’ve got stocks, bonds, and mutual funds that are worth a hundred thousand dollars, I can take sixty to eighty thousand dollars out against that as security. And I just have to maintain that LTV, or loan to value. I knew what question was coming next by the way. So what happens is if that $100,000 turns out to appreciate to now $110,000, I actually will have more ability to take capital out against that. As it comes down, though, I may have to supply more money to maintain the loan to value. It seems that, you know, if I’m a, let’s say I want to start a microbrewery. That’s my core competency is I better know something about how to produce craft beer or whatever I’m doing. Your core competency is financing. You guys know it. You know how to do it. You know how to secure funding. This is what you do. To me, it doesn’t seem logical when, in my mind, time is our most important asset. We don’t know how long we’re going to be on this planet. To me, it doesn’t make sense to go to 250 lending sources individually, call them, send them my packet, talk to them, do that whole thing, when someone like you can make it happen. Yeah, I mean, financing in general is highly inefficient because it’s so fragmented, right? Like, it’s a hyper-local opportunity. In some cases, it’s a national opportunity. In others, some lenders want retail-type establishments, others don’t. Some capital sources invest only in technology and others in medical. There is a lot to manage and a lot to understand there. So one of the ways that we’re trying to help address that need is by making that a more efficient process for entrepreneurs. And we look at ourselves similar to when you’re building your team, you want people that are legal experts and accounting experts and financing experts and so on and so forth. So I think it’s an important part of the kind of team building process. Now let me ask you this here. This next this next kind of lending option is the SBA loan or small business administration loan. The definition of this is off your website there is SBA loans are guaranteed by the small business administration. Since the small business administration guarantees up to 75% of the loan in the event of a default aka not paying your payments. Lenders are able to provide small business loans at extremely attractive rates and terms to start-ups, franchises, and existing businesses. At the end of the day, if I want to get an SBA loan, what’s the benefit of doing a small business loan? Well, a lot of the bank loans, especially when it comes to acquisition-based financing, are going to go through the SBA program. The SBA was created not to provide capital directly to individuals but instead to guarantee debt for banks so that they felt more comfortable taking on the risk of lending to new entrepreneurs. So it’s a common misconception. The SBA is there for the bank’s benefit as much as it is for the individuals. I mean if I’m going to call you guys and you connect me and we get secure funding, it would seem that that would take the risk out of it, or not the risk out of it, but reduce the risk for the lending institution that ultimately lends. The direct lender, it would take the risk out if it’s 75% of the risk is guaranteed by the SBA, right? That is true. Yeah, so from the bank’s standpoint, again, they’re going to feel more comfortable providing you and I capital so that we can continue to acquire, grow, build our businesses. If they did not, if the SBA program did not exist, the point at which they would spend more time kind of dissecting the transactions, I mean, the underwriting, the stringent underwriting practices would get even more stringent. Is it, SBA loans are very common. I mean, is this a very common? They are, I mean, there’s tens of thousands of them every single year that are done. I don’t know the number specifically off the top of my head, but I believe that somewhere around 10 to 15 billion dollars per year is injected into small business through those programs. What is the, what would you say is the downside to an SBA loan? Like why would I not want to get an SBA loan if I’m a small business owner? I’m not sure that there is a specific downside to just the SBA, but let’s talk about lending in general. I think anytime you take on debt that adds to the expenses that the business has to support every single month. So I think debt service is one of those. The other thing is that the bank is going to take collateral, right? So they’re going to require that your home and other major tangible assets are potentially secured against that loan itself. So I mean, those are some of the risks. But again, it’s not isolated just to the SBA. It’s just if you’re going to go out and obtain capital. Those are things that you have to consider. Which takes us back to my favorite notable quotable that you said. If you want to take the island, you have to burn the boats. I mean, you’ve got to put up some collateral. I mean, if you’re going to go for it and try to win, you’re going to have to put up some kind of collateral. Absolutely. Entrepreneurs are definitely taking risks. We talk about lending. One of the things that we love about the rollover for business startup strategy, they’re not taking on any debt. This is a pure investment. So there’s no debt to service on a monthly basis. So there are benefits and there are risks to every type of capital source. OK, so lending option number four that you all specialize in here and got guidance is unsecured loans. On the website, it says an unsecured loan can be a fast funding option for a new business or franchise. Fast. Because these loans don’t require any collateral, they’re available to those with great personal credit. What is unsecured lending? What is an unsecured loan? Yeah, so an unsecured loan is a revolving line of credit, so it works much like a credit card. So it is a line of credit that says, hey, I can borrow up to X amount, and I can pay it off and reuse it, and pay it off and reuse it, much like you would a credit card. There are sources out there that will provide up to $150,000 for new entrepreneurs and do it solely based off of their credit score and their credit history. So there’s another term that’s used synonymously called signature loans, but ultimately the bank is going to look at an individual and say, you know what, they’ve done a great job managing their credit, their history is clear and strong, and for that we’re going to provide them some benefit. What’s the drawback? The drawback is that the rates on these loans, because they’re unsecured, because they’re not guaranteed through a program like the SBA, instead of being in a range of say 6 or 7 percent, they’re typically double that. So you’re saying that because a loan is unsecured, instead of it being 7 percent, it might be double that? You might have a 14 percent interest rate. You could. Now sometimes they’ll give introductory rates to make it more attractive in the short term, but yeah, ultimately they become much more expensive because the bank is taking much greater risk. So, okay, let me ask another question here, because you, I know it’s not something that Guidant does per se, but it’s something that David Nilsson does, Angel Investor. If somebody was watching this, they’re in a dorm room, they’re somewhere near the Stanford campus, they’ve got the next big thing. And they’re going, I’ve got the next big thing. What’s the way that somebody would try to connect with you or you might recommend with other angel investors? I mean, what’s the way you get, what’s the formal way, the proper way to get in touch with you? Yeah, so I think the angel investors in general tend to swim in very similar groups, run similar packs. So I think there are a lot of angel networks all over the country. Those are easy to find. So Angel Network San Francisco, Angel Network Seattle, you’ll find a bunch of groups out there. And then again it’s about coffees and cocktails. It’s about meeting with people, talking about your idea, asking for feedback, support, what have you, and then ultimately finding the connections that they have that lead you towards individuals that can be helpful to you. I call it following the cookie crumbs. Following the cookie crumbs. Let’s say that I live in Idaho and I’m like, I want Angel Investors. So I Google Seattle Angel Network. Does that person need to hop on a plane and come out here and marinate? No. No. Typically you can do a lot of this over the phone. Eventually if there’s a deal to be done, it’s likely they’ll want to meet in person. But the reality is, and I think it’s important to note, very few deals are going to get done through Angel Networks, Venture Capital, so on and so forth. The majority of the transactions are going to occur inside of the bank financing, rollover for business startups, unsecured credit. Those are the places where most businesses are getting financed. OK. Final question. I think the thrivers want to know. And if they don’t want to know, I want to know. You heard back in the 80s, we had the guy, Eddie Money. Remember the song, Take Me Home Tonight? Do you ever think about going on the business card, David money? No. No. I can honestly say I’ve never contemplated it. Okay, well it’s just an idea and if I catch you using it later, I won’t, you know, there’s no type of claim on that. That’s just an idea I give to you. So. Very generous. I appreciate you being here. Thanks. Thank you. David, I appreciate you letting me be here, my friend. Thanks for having me. Real quick, we’re in your boardroom of Guidant Financial. How many folks work here at Guidant Financial? We have about 85 to 90 people. Really? Yeah. And it looks like it’s a highly motivated group. I got here this morning. I met Paul and some of the teammates. It’s really neat. You have a screen up there where it shows, I guess, the top performers on the screen, ESPN graphics. Yeah, we track all of our major metrics. And we’ve tried to do it in a way that’s fun. And we use some tools that display them in ways that are relevant to some of our teams. So like the Sports Center dashboard is one that we really like. I absolutely, just so you know, that was like Christmas for me seeing that. I was so excited how you did it, because each person looked like they’re like an ESPN athlete up there. And it was really neat how you guys did that. They get to manage their own profiles and everything. Did you see that somewhere else? Or this is your idea? No, it’s actually a tool. I couldn’t tell you the name of it, but it’s a tool that we subscribe to. I love that. It blows my mind. So anyway, I want to ask you here a little quick question. I think all the Thrivers want to know from coast to coast, all around the world, and even in Dubai, apparently, as of this morning. You’re a great American. You’re a super citizen of Seattle. So I have to ask you this question. In your mind, if Detlef Schrimpf, Detlef Schrimpf of the Seattle Supersonics and Sam Perkins at their peak, at their prime, were to get together in a one-on-one duel in basketball, who would have won? Easy. Detlef Schrimpf. Really? Yeah. Sam was a great ball player, good shooter, but Detlef could dribble, he could play D, he’s got an outside game, he’s got an inside game, he’s a strong person. Are you a friend of Detlef? I’m not. But he’s an amazing basketball player. All right. All right. Well, now we’re going to go ahead and get into the good stuff like my kids when they secretly get into all the Halloween candy when they think we’re not looking. We’re getting into the good stuff here. And so just to give the Thrivers a little bit of a context and before we get into these rules, I want to… Can you share with the Thrivers how many small business owners you’ve been able to help get funding over the past years. Yeah, so we started the company in 2003. Since that period of time we’ve helped about 10,000 entrepreneurs in all 50 states to invest four billion dollars in a small business. And today those same businesses employ about 60,000 Americans. Does that number, does that word billion seem overwhelming to you where you go, wow we’ve really done that? That’s got to feel good. Yeah, it’s fun. I think, you know, we want to have an impact. We want to see small businesses be successful. I’m an entrepreneur. Small business has been a big blessing in my life. And so it’s fun to see that we’re helping other people, or playing a small part in helping other people to start and then get into business for themselves. As I’ve got to know you and met some of your staff, it seems like the number of 60,000 people that you’ve helped create jobs for seems like the number you’re most excited about. It is. It’s about impact, right? And one of the things that we think that’s really exciting about our business is not only we helping individual entrepreneurs, but we’re actually having an impact on our economy. You think about 60,000 jobs, that’s a huge number, and it’s something that we’re very proud of. Well, I want to ask these things. These are basically the most important things that banks consider before giving you a loan. And I’d really like to ask you, what are the most important factors in your mind that you feel like banks, hey, this is what they’re going to consider? So we work with hundreds of lending sources across the country. So I probably should take a step back and say, it depends on the type of financing you’re looking to deploy, the stage of the business, so on and so forth. So when we talk about these general concepts, they are just that. They’re general concepts. So the first thing that they’re going to look at first is the business plan. Is this a business that we think can be successful? Second thing that they’ll look at is the financial qualifications of the borrower. That’s everything from income to assets to credit. And then the last thing is, you know, really I would say more of kind of an industry or opportunity analysis. The banks themselves are in the business of lending capital and the way that they do that is by making sure that they’re taking as little risk as possible. So the things that they’re gonna look at are the things that are gonna de-risk the investment for themselves. I hear business owners all the time and they’ll say, well the bank doesn’t want to take any risks at all. And that’s what you’re saying? Yes, that’s true. That is true. OK. So when we’re talking about the business plan, I want to ask you a little, I want to deep dive a little more into that. What should I include on my business plan if I’m going to go meet with the bank? I mean, the bare minimum, what do I need to have in my business plan? Well, there’s a lot of business plan templates out there, right? I mean, even at the SBA, they’ve got a business plan template. I think the SCORE has a business plan template. But on those are generally the same things. They’re gonna look at, you know, who is the team behind this? What relevant experience do they have? What are the individual, or excuse me, what is the industry opportunity and how are they going to play into that? A competitive analysis, do they really understand who they’re going up against in the marketplace that they intend to go out with? They’re gonna look at the projections. Are they making reasonable assumptions as far as revenue, cost of goods, so on and so forth. Now we look into the financial qualifications of the borrower. You’re just looking for a decent credit score and a decent credit history or what are you looking for? When you say financial qualifications. Yeah, so a little bit of definitely credit dependent. So they’re going to look most, anytime you’re looking at debt, credit is going to play a huge role in that. Collateral, they’re going to want to see that the individual’s got some collateral for the bank to take a security for the loan. So a piece of real estate would be an example of that. If you own a home and it’s got some significant equity, it’s likely the bank is going to look at that as an opportunity to de-risk the investment by having security on that home. I want to sort of break down some of these words in case people are not a hundred percent sure what they mean. The collateral is something that secures the money you’re borrowing. It more or less says, if you don’t pay this money back, we’re going to take this stuff. Well, take may not be as accurate. What they’re going to get is a position on that home. So for example, you buy a piece of real estate tomorrow, and you get a mortgage. The mortgage is granted to you based on the fact that the security for that loan is the underlying asset itself. So I’m getting a mortgage because I can have a position on your property. It doesn’t mean that I can necessarily force you to sell it, liquidate it, and take my money away, but it means that when you do, I have a claim against some of the proceeds. And let’s say that I right now I’m a business owner and I see this all the time, that’s what I want to ask you. A business owner, they say, well I’ve got some collateral. I’ve got a lot of collateral. I’ve got some paying golf clubs. Pretty sweet. And I’ve got a Jeep. Put the spinners on it. It’s pretty sweet. Pretty sweet. I’ve got the furry, furry, whistling wheel. Got a speaker system. I’ve got a pool table. Got a light that says Bud Light, neon. I have a far-signed football helmet. I got some stuff. What is collateral and what’s not collateral? I mean, can you just kind of say, I just broad-brushed, but what kind of stuff is not collateral and what is collateral? Yeah, so again, depending on the lending product itself, whether it’s an SBA loan, a securities-based transaction, really two primary forms of collateral, any and all real estate and securities. So stocks, bonds, mutual funds. Real estate and securities. No paying golf clubs. You’re killing the… No golf clubs. You’re killing the dreams of… Definitely not a Brett Favre autographed football. Really? You’re not a Brett Favre guy? I’m not. Really? Did you just want him to stay retired or did you just wish you wouldn’t have played football together or what are your thoughts? He’s a great football player. He’s not my guy. Okay. Yeah, every year it was like a man soap opera. I would wait. I’m like, is he going to come back? Is he going to leave? I don’t know. It just kept me in that emotional turmoil every year. I’m glad he retired because I just emotionally couldn’t handle it anymore. Yeah, him and Elvis. Well, Elvis might come back, too. So we’ll talk about that in another episode. Now, industry analysis. I think a lot of everybody believes their industry is great. I’m going to give one example that recently has been making, it’s just been blowing my mind. There are a lot of people, there’s men and women who are doing it, but primarily a lot of women, who are wanting to start these gourmet bakeries to sell cupcakes for two dollars a piece. And I remember sitting one time going, how many cupcakes does one have to sell per day to pay all the payrolls? Well, they sell 1,000 a day. That’d be $2,000. And I can’t be making more than 80% profit on these. I’m doing the math. And it seemed like one by one, all the cupcake businesses I saw just evaporated. Oh, just blowing up. They’re not really a very profitable deal. I’m sure there is cupcake businesses that make a lot of money, but as far as an industry, does the bank kind of go, well cupcakes, that’s a bad industry, or do they kind of have, does each lending institution have an industry that they sort of have a certain prejudice against where they say, we don’t we don’t lend for cupcake businesses? Some do, yeah, some do. I mean we see some banks that don’t want to take on transactions in fitness because most of the value is in the equipment, and the equipment loses value very fast, right? Or I should say most of the investment is made in the equipment, and that loses value very fast. So you see some that do that, some that say, hey, we’ve got too much investment in this one category, so we’re gonna stop investing, because as a portfolio, their loan portfolio, they want to make sure they’re diversified, kind of like a mutual fund would be, and if I’ve got too many yogurt, self-serve yogurt franchises in my portfolio, maybe I need to move somewhere else. So you do see a little bit of bias against certain industries, but it’s typically not solely based on the fact that they have a belief that nobody can be successful in this industry, because contrary to your example a minute ago, one of my very closest friends owns seven cupcake businesses here in Seattle. In my face. And she’s massively successful. But I’ve seen the same thing. I’ve seen others sprout up and go away right away. So I think it a lot of times has to do with the individual not the business itself So you know you how many instance lending institutions? Do you I don’t know looking for a specific number, but I mean it guidance you guys work with what hundreds hundreds hundred country Yeah, so the main advantage of working with your group or groups like yours is to You’ll kind of do the due diligence and the research to figure out the lending institutions that have an appetite for that kind of industry? Absolutely, yeah. So one of the things that you look at with small businesses, right, our client is a Main Street American small business owner. So that’s somebody who is investing somewhere between $100,000, maybe upwards of a million dollars into their business. Not typically a lot larger and not typically a lot smaller. So for that reason, these are hyper-local deals. The cupcake business, that’s a deal that’s being done right here in Bellevue, Washington or in Tulsa, Oklahoma, but you know sometimes bringing a national lender to that isn’t going to be the right deal. Sometimes it’s a regional lender, sometimes it’s a local lender, but small business loans are hard to obtain. So oftentimes people will go into their own bank because I’ve got a relationship with Bank of America, Chase or whoever else, and I’ll get denied on my first request and then I have no idea where to go from there. So where we step in is to help them analyze based on this type of business and this geographic territory, we help to identify two or three lenders that we think may want to consume that loan and give them an opportunity to negotiate with them. I have noticed that one thing in the world of entrepreneurship that’s tough is, you know, if you’re a business owner and you have, let’s say, employees, you’ve got five or six employees, and you go apply for the business loan and you get told no, you really don’t want to tell everyone about it. So you’re kind of like you want to keep it on the hush. But you personally feel like, oh my gosh, this is, if no one’s going to lend me money, maybe this isn’t a good idea. Or you start to, all the emotion and all the, what would you say to the business owner who’s maybe applied for a loan through a local bank right now? And they got told no. And just no. Not really much of a clarification, just no. What would you say that person when you say you know hey call someone like us and we can look for options for you or I mean is it normal to get rejected a few times before you get a yes? It’s not uncommon for a bank to say that they don’t want that specific loan so the idea is to talk to the lending sources before you make you take the time to put together the formal application. So for example if we use your cupcake example I’ve got a gourmet cupcake bakery that wants to get a loan or you know someone who wants to start one of these bakeries, we may float that idea, the general opportunity in front of two or three banks to see who’s starting to bite on it. If I just push it to one lender and they haven’t said yes I’m interested, then you know just by sheer we would expect that in most cases the interest level is going to be low. But if we’re giving them this opportunity and they’re coming to us saying no we’re interested in learning more about this, then gradually that’s going to go higher. And then our job is to make sure that the entrepreneur has thought through all of these different aspects so that they’re best presented to the bank. Now the final question, totally not banking related, but something I think that really might even be more important than how to get funding to run your business, which is the lifeblood of your business, the cash. Do you feel like Nirvana or Pearl Jam was a better band? I mean, you’re a Seattle guy. I mean, if you had to choose, Nirvana or Pearl Jam? Neither are really a genre that I spend much time with, but I would probably go with Nirvana. Really? Yeah. OK, what is your genre of choice? Well, so I’m a Motown guy. Really? You’re an R&B guy? Old school Motown. Boom. That’s huge. Awesome. I love Marvin Gaye. You like Marvin Gaye? Really? Awesome. OK. OK. Now I feel like we’ve just got closer by about 2%. All right. Well, David, I appreciate you sharing with us about some of these things that we need to think about when going out there to get a bank loan. And I just appreciate you taking the time to mentor Thrivers. Because I know a lot of times people don’t get a chance to sit down with the head of a massive company like yours and pick your brain about all these nuances. So thank you more than you know. I appreciate it. Happy to do it. JT, do you know what time it is? 4.10. It’s T-Bo time in Tulsa, Roseland, baby. Tim Tebow is coming to Tulsa, Oklahoma. During the month of Christmas, December 5th and 6th, 2024, Tim Tebow is coming to Tulsa, Oklahoma in the two day interactive Thrive Time show business growth workshop. Yes, folks, put it in your calendar this December, the month of Christmas, December 5th and 6th. Tim Tebow is coming to Tulsa, Oklahoma, and the Thrive Time Show two-day interactive business growth workshop. We’ve been doing business conferences here since 2005. I’ve been hosting business conferences since 2005. What year were you born? 1995. Dude, I’ve been hosting business conferences since you were 10 years old and a lot of people you know, have followed Tim Tebow’s football career on the field and off the field. And off the field the guy’s been just as successful as he has been on the field. Now the big question is JT, how does he do it? Well, they’re gonna have to come and find out because I don’t know. Well I’m just saying, Tim Tebow’s gonna teach us how he organizes his day, how he organizes his life, how he’s proactive with his faith, his family, his finances. He’s going to walk us through his mindset that he brings into the gym, into business. It is going to be a blasty blast in Tulsa, Russia. Folks, I’m telling you, if you want to learn branding, you want to learn marketing, you want to learn search engine optimization, you want to learn social media marketing, that’s what we teach at the Thrive Time Show two-day interactive workshop. If you want to learn accounting, you want to learn sales systems, you want to learn how to build a linear workflow, you want to learn how to franchise your business, that is what we teach at the two-day interactive Thrive Time Show business workshop. You know, over the years we’ve had the opportunity to feature Michael Levine, the PR consultant of choice for Nike, for Prince, for Michael Jackson. The top PR consultant in the history of the planet has spoken at the Thrive Time Show workshops. We’ve had Jill Donovan, the founder of Rustic Cuff.com, a company that creates apparel worn by celebrities all throughout the world. Jill Donovan, the founder of Rustic Cuff.com, has spoken at the two-day interactive Thrive Time Show business workshops. We have the guy, we’ve had the man who’s responsible for turning around Harley Davidson, a man by the name of Ken Schmidt. He has spoken at the Thrive Time Show two-day interactive business workshops folks I’m telling you these events are going to teach you what you need to know to start and grow a successful business and the way we price the events the way we do these events is you can pay $250 for a ticket or whatever price that you can afford yes we’ve designed these events to be affordable for you and we want to see you live and in person at the two-day interactive December 5th and 6th Thrive Time Show Business Workshop. Everything that you need to succeed will be taught at the two-day interactive Thrive Time Show Business Workshop December 5th and 6th in Tulsa, Oklahoma. And the way we do these events is we teach for 30 minutes and then we open it up for a question and answer session so that wonderful people like you can have your questions answered. Yes, we teach for 30 minutes and then we open it up for a 15 minute question and answer session. It’s interactive. It’s two days It’s in Tulsa, Oklahoma We’ve been doing these events since 2005 and I’m telling you folks it’s gonna blow your mind Yes, ladies and gentlemen, the thrive time show today interactive business workshop is America’s highest rated and most reviewed business workshop See the thousands of video testimonials from real people just like you who’ve been able to build multi-million dollar companies. Watch those testimonials today at Thrivetimeshow.com. Simply by clicking on the testimonials button right there at Thrivetimeshow.com, you’re gonna see thousands of people just like you who’ve been able to go from just surviving to thriving. Each and every day we’re gonna add more and more speakers to this all-star lineup, but I encourage everybody out there today, get those tickets today. Go to Thrivetimeshow.com. Again, that’s ThriveTimeShow.com and some people might be saying well how do I do it? I don’t know what I do. How does it work? You just go to ThriveTimeShow.com let’s go there now we’re feeling the flow we’re going to ThriveTimeShow.com again you just go to ThriveTimeShow.com you click on the business conferences button and you click on the request tickets button right there. The way I do our conferences is we tell people it’s $250 to get a ticket or whatever price that you could afford and the reason why I do that is I grew up without money. JT, you’re in the process of building a super successful company. Did you start out with a million dollars in the bank account? No, I did not. Nope, did not get any loans, nothing like that. Did not get an inheritance from parents or anything like that. I had to work for it. And I am super grateful I came to a business conference. That’s actually how I met you, met Peter Taunton. I met all these people. So if you’re out there today and you want to come to our workshop, again, you just got to go to thrivetimeshow.com. You might say, well, who’s speaking? We already covered that. You might say, where is it going to be? It’s going to be in Tulsa, Russia, Oklahoma. It says Tulsa, Russia. I’m really trying to rebrand Tulsa as Tulsa, Russia, sort of like the Jerusalem of America. But if you type in Thrive Time Show in Jinx, you can get a sneak peek or a look at our office facility. This is what it looks like. This is where you’re headed. It’s going to be a blasty blast. You can look inside, see the facility. We’re going to have hundreds of entrepreneurs here. It is going to be packed. Now, for this particular event, folks, the seating is always limited because my facility isn’t a limitless convention center. You’re coming to my actual home office. And so it’s going to be packed. Who? You. You’re going to come. Who? I’m talking to you. You can get your tickets right now at Thrivetimeshow.com. And again, you can name your price. We tell people it’s $250 or whatever price you can afford. And we do have some select VIP tickets, which gives you an access to meet some of the speakers and those sorts of things. And those tickets are $500. It’s a two-day interactive business workshop, over 20 hours of business training. We’re going to give you a copy of my newest book, The Millionaire’s Guide to Becoming Sustainably Rich. You’re going to leave with a workbook. You’re going to leave with everything you need to know to start and grow a super successful company. It’s practical. It’s actionable. And it’s TiVo time right here in Tulsa, Russia. Get those tickets today at Thrivetimeshow.com. Again, that’s Thrivetimeshow.com. Hello, I’m Michael Levine, and I’m talking to you right now from the center of Hollywood, California, where I have represented over the last 35 years 58 Academy Award winners, 34 Grammy Award winners, 43 New York Times Best Sellers. I’ve represented a lot of major stars, and I’ve worked with a lot of major companies. And I think I’ve learned a few things about what makes them work and what makes them not work. Now, why would a man living in Hollywood, California, in the beautiful sunny weather of La Come to Tulsa because last year I did it and it was damn exciting clay Clark has put together an exceptional Presentation really life-changing and I’m looking forward to seeing you then. I’m Michael Levine. I’ll see you in Tulsa Thrive time show two-day interactive business workshops are the world’s highest rated and most reviewed business workshops. Because we teach you what you need to know to grow. You can learn the proven 13 point business systems that Dr. Zellner and I have used over and over to start and grow successful companies. We get into the specifics, the specific steps on what you need to do to optimize your website. We’re going to teach you how to fix your conversion rate. We’re going to teach you how to do a social media marketing campaign that works. How do you raise capital? How do you get a small business loan? We teach you everything you need to know here during a two day, 15 hour workshop. It’s all here for you. You work every day in your business, but for two days you can escape and work on your business and build these proven systems, so now you can have a successful company that will produce both the time freedom and the financial freedom that you deserve. You’re gonna leave energized, motivated, but you’re also going to leave empowered. The reason why I built these workshops is because as an entrepreneur, I always wish that I had this. And because there wasn’t anything like this, I would go to these motivational seminars, no money down, real estate, Ponzi scheme, get motivated seminars, and they would never teach me anything. It was like you went there and you paid for the big chocolate Easter bunny, but inside of it, it was a hollow nothingness. And I wanted the knowledge, and they’re like, Oh, but we’ll teach you the knowledge after our next workshop. And the great thing is we have nothing to upsell. At every workshop, we teach you what you need to know. There’s no one in the back of the room trying to sell you some next big get-rich-quick, walk-on-hot-coals product. It’s literally, we teach you the brass tacks, the specific stuff that you need to know to learn how to start and grow a business. And I encourage you to not believe what I’m saying, and I want you to Google the Z66 auto auction. I want you to Google elephant in the room. Look at Robert, Zellner, and Associates. Look them up and say, are they successful because they’re geniuses, or are they successful because they have a proven system? When you do that research, you will discover that the same systems that we use in our own business can be used in your business. Come to Tulsa, book a ticket, and I guarantee you it’s gonna be the best business workshop ever, and we’re gonna give you your money back if you don’t love it. We’ve built this facility for you, and we’re excited to see you. And now you may be thinking, what does it actually cost to attend an in-person two-day interactive Thrive Time Show business workshop? Well, good news, the tickets are $250 or whatever price that you can afford. What? Yes, they’re $250 or whatever price you can afford. I grew up without money and I know what it’s like to live without money. So if you’re out there today and you want to attend our in-person, two-day interactive business workshop, all you got to do is go to thrivetimeshow.com to request those tickets. And if you can’t afford $250, we have scholarship pricing available to make it affordable for you. I learned at the Academy at Kings Point in New York, acta non verba. Watch what a person does, not what they say. Good morning, good morning, good morning. Harvard Kiyosaki, The Rich Dad Radio Show. Today I’m broadcasting from Phoenix, Arizona, not Scottsdale, Arizona. They’re close, but they’re completely different worlds. And I have a special guest today. Definition of intelligence is if you agree with me, you’re intelligent. And so this gentleman is very intelligent. I’ve done his show before also, but very seldom do you find somebody who lines up on all counts. And so Mr. Clay Clark is a friend of a good friend, Eric, Eric Trump, but we’re also talking about money, bricks, and how screwed up the world can get in a few and a half hour. So Clay Clark is a very intelligent man. And there’s so many ways we could take this thing. But I thought, uh, since you and Eric are close Trump, what were you saying about what Trump can’t, what Donald, who is my age and I can say or cannot say. Well, I have to, first of all, I have to honor you, sir. I want to show you what I did to one of your books here. There’s a guy named Jeremy Thorn, who was my boss at the time. I was 19 years old, working at Faith Highway. I had a job at Applebee’s, Target, and DirecTV. He said, have you read this book, Rich Dad, Poor Dad? I said, no. My father, may he rest in peace, he didn’t know these financial principles. I started reading all of your books and really devouring your books. I went from being an employee to self-employed to the business owner to the investor and I owe a lot of that to you and I just want to take a moment to tell you thank you so much for allowing me to achieve success and I’ll tell you all about Eric Trump. I just want to tell you thank you sir for changing my life. Well not only that Clay, thank you but you’ve become an influencer. More than anything else you’ve evolved into an influencer where your word has more and more power. So that’s why I congratulate you on becoming. Because as you know, there’s a lot of fake influencers out there, or bad influencers. Yeah. Anyway, I’m glad you and I agree so much, and thanks for reading my books. Yeah. That’s the greatest thrill for me today. Not thrill, but recognition is when people, young men especially, come up and say, I read your book, changed my life, I’m doing this, I’m doing this, I’m doing this. I learned at the academy at King’s Point in New York, acta non verba. I learned at the academy at King’s Point in New York, acta non verba. Watch what a person does, not what they say.