The world’s most successful entrepreneurs are betting on themselves.
That’s one big takeaway from our recent survey of thousands of elite entrepreneurs (those with $10 million or more in investable assets) around the world and their attitudes toward credit.
This isn’t a surprise to me. The entrepreneurs we work with here tend to be people with a clear vision of their company’s future, a strategy for how to get there and a commitment to execution. That’s a business combination that invites investment.
Another takeaway: Entrepreneurs appreciate appreciation. In addition to their businesses, they most often want to use credit in the service of appreciable asset purchases: real estate and investment products.
See below to see the ranked list of entrepreneurs’ top motivations for credit use from our BNP Paribas 2019 Global Entrepreneur Report.
- Purchase of a new asset (e.g. real estate) – 48%
- Financial support for my business – 44%
- Diversifying an investment portfolio through new financial products – 37%
- Personal requirement for short-term funding – 36%
- Mortgage to buy a primary property – 33%
- Purchase of a luxury item – 19%
Of course, every entrepreneur, company, and business environment is different. Our global study reflects this at the local level. For example, Asia had the highest percentage of entrepreneurs (55%) who have borrowed to invest in their businesses. Interestingly, this number rises to 60% for business owners in China, India, and Indonesia.
In the U.S., the top three motivations for credit use reported by elite entrepreneurs are: purchasing a new asset (49%); financial support for my business (37%); and mortgage to buy a primary property (37%).
Many U.S. business owners want to build business credit without using personal credit. They want to know how to secure business credit.
If you’re an entrepreneur, what’s your motivation for credit use? Are you using it strategically as part of a comprehensive financial plan?
As part of our holistic wealth management approach, we offer a range of credit and lending solutions to finance the goals of entrepreneurs. Speak to a financial advisor about how we can help you.
We also offer credit and lending solutions aligned with our values as the bank for a changing world such as our home equity line of credit (HELOC) rates for homes that go solar, and special auto loan rates for electric cars.
Read key takeaways from the report on how elite entrepreneurs are thinking about succession planning and business transfer.
For direct access to investment insights, market updates, and perspectives on financial topics from Bank of the West and BNP Paribas leaders, download the Voice of Wealth app, available at the Apple iTunes and Google Play stores.
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