One of the hidden facts about Guam is the amount of fruit that we produce and sell every year. In fact, at one point we were producing more fruits and vegetables than we were physically able to ship out every year. That is why when a customer who approached us with the idea of expanding the shipping routes and his own transport company, we saw a massive profit maker on our hands.
With an increased shipping industry, we would be able to ship as many fruits and vegetables that the area was able to make. So, instead of just funding them, we offered to throw in an extra 20% on top of the loan with a stake of 10% of their company. As it turns out, they were looking for an investor, so we parted ways with the 20% (which was closer to 5% since there was 15% additional interest in the loan itself).
It only took three years for the dividends to start paying back as an investor. Once the investment had begun to pay off, and the company had begun to grow, the government backed the project due to the additional revenue it would bring in annually. This worked out well for us.
We do not invest in companies often, as we usually act only as a lender to ensure that any regulations are not broken, but it was part of the process for this company as we could act independently of our company.
Just because you work in an industry or provide a service, does not mean that your company cannot act as an investor in another company. Many lenders do not understand this and miss out on the chance to invest in some up and coming businesses they know will be successful. The trick is to make sure that you treat the loan of the initial service sperate from the investment itself.