Use the leveraging power of corporate credit to build great wealth quickly. Borrow for investment purposes only.
To Borrow or Not to Borrow?
Any person can make millions in a short period of time — first they have to know:
Most people take out a business loan and spend it on clothes, a car, or a vacation. These things depreciate and bring no return on investment. When you borrow for business purposes, there's a great chance of earning profit.
Why Banks Prefer Businesses
Lenders prefer lending to businesses over individuals for a simple reason: individuals can only have one income stream, while businesses can have many.
Personal loans carry higher interest because there's greater risk. Business loans produce larger profits for banks — larger loans equal higher returns on interest. Banks are in business for profit, and business loans are safer because they're taken for profit-generating purposes, not liabilities.
Definition of Leverage
Leverage
Strategic advantage; power to act effectively; mechanical advantage gained by the lever.
Leveraging (Finance)
To borrow money hoping to make more — to borrow money in order to buy a company, relying on it to make enough profit to cover the interest payable on the loan.
L.E.V.E.R.A.G.E.
Leverage Exacts Very Excellent Results Always Gained Effortlessly
Three Ways to Leverage
Leveraging Your Assets
Example: Put a mortgage on your home to finance your business.
Leveraging Capital
Instead of putting money directly into your business, deposit it in a CD at your bank and take out a business loan against it. This shows as a line of credit on your Duns profile and builds corporate credit. The bank reports your payments, and other creditors see a $50K line of credit — giving you "comparable credit" from other providers.
Leveraging Corporate Credit
You must have corporate credit to leverage it. Examples include a leveraged buyout (LBO) or financing your office building instead of leasing. Remember: you can leverage corporate credit to earn more money as long as your profits exceed your expenses.
The John & Robert Story
A lesson in joint ventures and the value of partnership.
John is a pottery business owner needing capital. He has no corporate credit to qualify for a loan, so he has no choice but to find a joint partner. Robert offers: "I'll put up the financial backing, you make the product, and we split profits 50-50."
John hesitates — he doesn't want to split profits. But Robert's wife wisely notes: "50% of something is better than 100% of nothing."
The lesson: Don't let pride prevent you from accepting help. A smaller share of a successful venture beats full ownership of nothing.
Leverage ROI Explorer
See how borrowed capital amplifies returns — and how leverage cuts both ways.
+29.0% ROI
Profit: $14,500 on $50,000 of your capital. Leverage amplifies gains. Total invested: $150,000.
How could you apply leverage in your business or investing? What assets could borrowed capital acquire?