Pride was swallowed and ego pushed aside when 25-year-old Ross Marais asked his parents to fund his financial planning business. They loaned him $50,000 interest-free.
“It was a bit of a tough one because obviously being a young male I wanted to be seen to be able to do things on my own, but then I put the pride and ego aside and realised it was a good opportunity and one that doesn’t come up that often,” Marais explains.
“It was more just a pride thing getting in the way because no one really likes asking for money – especially from your parents.”
Crucial funding
Marais’ business, More Time Financial, is now in its second year and though it has yet to turn a profit, it turned over almost $100,000 in its first year. By his third year in business, the Queenslander hopes his business is making enough to start repaying his parents.
“I wouldn’t have been able to start up a business without that funding,” he says.
“I would have had some other options, they would have been through a business loan but obviously the best option was to get funding from the parents.”
The loan was spent on leasing an office, fitting it out and ongoing expenses. Plus there was enough for Marais to draw a small salary.
Potential inequity
Start-up cash from the bank of mum and dad is helping many ambitious entrepreneurs make their business dreams come true. Research published this month by the Australian Housing and Research Institute found generous loans from parents, which are typically financed through housing wealth, are helping young Australians get ahead in the business world.
By funding businesses that would…