Millionaires and billionaires certainly live the good life. While they have no problem affording fancy cars and mansions now, most of them didn’t start out that way. Like many of us who have an idea we think could be profitable, some moguls took out loans to pursue their passions. And it worked.
Here are five of the best loan-to-loaded stories.
1. Barbara Corcoran
When you hear the name Barbara Corcoran, you think real estate. That’s because she built the Corcoran Group, a massive real estate firm that sold for a reported $66 million in 2001. But she didn’t inherit the company or get a huge investment to start her business empire.
Instead, she got a $1,000 loan from her boyfriend in the 1970s. The “Shark Tank” star used that money to advertise and rent her first apartment, and quickly built on that success.
Corcoran told Fortune magazine that her success was partly due to luck, but mostly creativity.
She was clever with her real estate advertisements in the early days and later took her business online before her competitors did. “Business is the most creative sport in the world,” she tweeted recently. “If you can dream it, you can actually make it happen.”
Now, Corcoran is worth an estimated $80 million.
2. Jessica Iclisoy
Jessica Iclisoy might not be a household name, but the product she created is in millions of homes across the country. The mom founded a company called California Baby when she was unhappy with the shampoos available for her new baby and sought to create one using natural ingredients.
To do this, Iclisoy needed to get a loan, so she borrowed $2,000 from her mother in 1995. She created her first product, pitched it to Whole Foods, and secured a shelf spot. Six years later, those products landed in Target and are now in over 10,000 stores. That $2,000 loan has turned into an estimated $260 million fortune.
3. Sam Walton
It’s nearly impossible for anyone in the U.S. to say they haven’t been in contact with Sam Walton’s business. Why? Because he’s the founder of the Walmart chain. But before he became the owner of a billion-dollar company, Walton opened his first general store in 1945 with a $20,000 loan from his father-in-law.
Walton soon had a mini-empire but opened his first Walmart store in 1962, which put him on the trajectory he’s known for today. The mogul died in 1992, but the stores live on as one of the most successful discount chains ever and Walton left a $100 billion fortune for his family. And it was all thanks to a loan.
4. Kevin Plank
Under Armour sells athletic gear to help you get through a tough workout. When its CEO, Kevin Plank, faced tough times during the company’s startup phase, he used credit cards as a loan source to get through. Even though Plank had saved up some cash, he still put $40,000 on his credit cards to launch the fitness apparel company, which turned out to be very successful. He later sought a loan from a bank to help take his endeavor to the next level.
The company is valued at more than $9.3 billion while he’s worth an estimated $2.1 billion. It certainly makes that credit card debt look not so bad.
5. Sir Philip Green
Sir Philip Green became a very rich man after receiving a loan from his family in the 1970s. Using the £20,000 loan (about $26,000), Green started to import wholesale clothes into London.
That business quickly grew into a multibillion-dollar company called Arcadia Group, which owns popular fashion chains such as Dorothy Perkins, Miss Selfridge, Topshop, and Topman. He and his wife are worth an estimated $4.8 billion.
Using a personal loan to start a business
You might not be wealthy like these five entrepreneurs, but perhaps you have an idea that you think could rake in a lot of dough. In that case, you might want to follow in these billionaires’ footsteps by taking out a loan to fund your potentially profitable passion project. You can do this in several ways:
Take out a business loan: Many banks, credit unions, and online lenders provide business loans, which you can use to hire staff or buy necessary equipment. The advantage of getting a business loan as a corporate entity is that your personal assets could be protected if your million-dollar idea doesn’t pan out.
Take out a personal loan: If you don’t qualify for a business loan, taking out a personal loan is another option. The amount you can borrow will depend on the lender, and in some cases, you don’t have to put up collateral. This feature is helpful if you’re starting out and don’t have many assets.
Use a business credit card: Taking a cue from Plank, you could use your credit card to pay for business expenses and have access to revolving credit. You might want to consider this option if you already have some money coming in to help you pay off the balance regularly rather than having one massive loan to pay back.
With all of these options, you need to be aware of interest rates. You’ll be responsible for paying back any money you borrow plus an additional percentage of that amount. So, you want to shop around to find the best loan or credit card for your financial situation.
Also, remember there are many other ways to start a business. So, explore your options (a loan from a family member, an angel investor, etc.) before starting your (hopefully) billion-dollar business.
Note: Net worth figures and company valuations were accurate as of June 5, 2018.
Interested in a personal loan?Here are the top personal loan lenders of 2018!
|Lender||APR Range||Loan Amount|
|1 Includes AutoPay discount. Important Disclosures for SoFi.
2 Includes AutoPay discount. Important Disclosures for Payoff.
3 Important Disclosures for FreedomPlus.
4 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
5 Important Disclosures for LendingPoint.
6 Important Disclosures for LendingClub.
All loans made by WebBank, Member FDIC. Your actual rate depends upon credit score, loan amount, loan term, and credit usage & history. The APR ranges from 6.16% to 35.89%. For example, you could receive a loan of $6,000 with an interest rate of 7.99% and a 5.00% origination fee of $300 for an APR of 11.51%. In this example, you will receive $5,700 and will make 36 monthly payments of $187.99. The total amount repayable will be $6,767.64. Your APR will be determined based on your credit at time of application. The origination fee ranges from 1% to 6% and the average origination fee is 5.49% as of Q1 2017. There is no down payment and there is never a prepayment penalty. Closing of your loan is contingent upon your agreement of all the required agreements and disclosures on the www.lendingclub.com website. All loans via LendingClub have a minimum repayment term of 36 months or longer.
7 Important Disclosures for Earnest.
8 Important Disclosures for Avant.
* The actual rate and loan amount that a customer qualifies for may vary based on credit determination and other factors. Funds are generally deposited via ACH for delivery next business day if approved by 4:30pm CT Monday-Friday. Avant branded credit products are issued by WebBank, member FDIC.
** Example: A $5,700 loan with an administration fee of 4.75% and an amount financed of $5,429.25, repayable in 36 monthly installments, would have an APR of 29.95% and monthly payments of $230.33
* Important Disclosures for Upgrade Bank.
Upgrade Bank Disclosures
** Accept your loan offer and your funds will be sent to your bank via ACH within one (1) business day of clearing necessary verifications. Availability of the funds is dependent on how quickly your bank processes this transaction. From the time of approval, funds should be available within four (4) business days.
|7.73% – 29.99%||$1,000 - $50,000||Visit Upstart|
|5.81% – 15.37%1||$5,000 - $100,000||Visit SoFi|
|6.87% – 35.97%*||$1,000 - $50,000||Visit Upgrade|
|8.00% – 25.00%2||$5,000 - $35,000||Visit Payoff|
|4.99% – 29.99%3||$10,000 - $35,000||Visit FreedomPlus|
|5.99% – 18.99%4||$5,000 - $50,000||Visit Citizens|
|15.49% – 34.49%5||$2,000 - $25,000||Visit LendingPoint|
|6.16% – 35.89%6||$1,000 - $40,000||Visit LendingClub|
|6.99% – 18.24%7||$5,000 - $75,000||Visit Earnest|
|9.95% – 35.99%8||$2,000 - $35,000||Visit Avant|