The perils and pitfalls of getting a loan…& growing your business
Being in business in today’s environment is difficult, especially the last few years. Money very tight, most businesses credit scores are at an all-time low.
Why?
High usage of credit cards because they can’t get a loan.
Business depending on what you do is way off thanks to a very weak market and demand as the consumer has limited funds themselves to purchase any extras over the last few years.
I have noticed a trend in lending the last year in particular where we see a small uptick to merchants looking for larger cash loans, the downside is what they have to pay for it…ouch
First problem is getting a loan. Banks only approve about 10% of loans, general industry with alternative is around 40-60% approvals and have limited industries they serve.
Second problem is most of the sub-prime (alternative market lenders) have run into trouble themselves. Can Capital, OnDeck, Bizfi and others went out of business, came back with investor cash injections, or someone buys the portfolio and services the debt. Problem is now they have all tightened up credit requirements, shortened the term cycle, and raised rates.
Third problem is the cash flow on paybacks to the loans. Almost all require daily or weekly ACH debits from your bank accounts, and terms are from 3 months to usually around 14 months tops and very high interest or factoring rates. Factoring rates range from 1.09 to as high as 1.49-you multiple the factor rate times your loan amount to get your payment.
This really disrupts the small merchant cash flow and they struggle to balance money to make sure they don’t miss a payment every day!
Fourth problem, most of the loans are brokered by another broker. So, you get many layers of fees, delays, lost paperwork, etc.
Fifth problem, when you apply to as an example an OnDeck, it is a single source supplier. If they turn you down then you have to start all over again. This really affects your credit score every time you apply.
Look for multiple loan offers from one source. You usually get the same group of short term, high rates, but at least it gives you an idea of what your options are without affecting your score each time.
NOW for my pitch (sorry you knew it was coming) but I think you will like it.
It really is time to re-evaluate the alternative lending market for small and mid-size businesses. I want to introduce you to two products that can change your business.
INTRODUCING: Next Generation Merchant Cash Loan:
NO MORE: DAILY-WEEKJLY ACH-HIGH FACTORING RATES-SHORT TERM CASH ADVANCES
- We do not have a restricted merchant list. From traditional retail stores to online and home-based businesses, Next-Financing can fund them all*. The business must be opened for 3+ months with an active business bank account and the owner must have a 500+ FICO.
- We fund businesses up to 4x their gross monthly business income with loan sizes ranging from $3,500 to $75,000. We count all business income from credit card transactions, cash and check transactions.
- Affordable Payments:Loan terms from 24 to 120 months make the monthly payment affordable. With fixed monthly ACH payments, borrowers no longer have to worry about daily re-payment schedules. Annual Interest Rates from 14.9%.
- No Pre-Payment Penalties:Businesses can pay off as soon as they’d like, allowing them to save on interest and renew faster.
- Same Day Funding:Best of all, these loans can be funded same day.
CONSUMER Financing:
Why Financing?
It’s simple……More approvals, ease of use platform, low discount rates, one application, full reporting, analytics, etc. we have multiple lending partners integrated into one platform, obtaining financing for customers with great credit to no credit has never been easier.
Seamless Technology Providing Seamless Approvals:
- One fast, easy application for all borrowers
- Instant approvals – 5 seconds or less
- Approvals down to a 600-credit score
- Funding within 24 hours
- No monthly fees or minimums
- No Set-up fees or application fees
- No equipment to buy or lease
- 100% paperless
- Detailed reporting back office with analytics and customized to your business (User Access/Multi-location Management/logos/Colors/Customer Applications, etc.)
- Works on any device
- Customers can apply privately from their phone
- Email our application for pre-approval before customer leaves their house
- Extremely Competitive Discount Rates as low as 1%
- We offer no interest (if paid in full) promotions for 6, 12, and 24 months.
- Loan amounts currently range from $1,000 – $35,000. If you sell a product or service that costs under $1,000 or over $35,000 we’d encourage you to check back soon because we’re always adding new lenders to the platform
- Businesses are funded directly via ACH within 48 hours
- Business Owners have zero risk on customer defaults. If something happens and your customer can no longer pay their bill, it’s not your problem
Check out all our loan products & Read our Blog at https://www.lendingcapital.net