A client came to us in the summer of 2019 in utter despair about their situation. They had fallen victim to false promises with a merchant cash advance, and had four positions pulling over $20,000 a month from their account on a daily draw. After digging deep to pinpoint why this occurred, we discovered they were promised a multiple year, monthly term if they took these advances. In only two days, we were able to get them onto a monthly payment program, and worked out a map to get the balance paid in under 12 months to avoid the high interest. Our client was able to pay off all four positions and drop their monthly payment to around $5000, saving their cash flow, and ultimately saving their business. Today they have a revolving line of credit they can use when they need funding, and have no need for a merchant cash advance ever again.
Something we hear often is, “The term is just too short”. We were approached by a bakery in Chicago that could no longer support the shorter term financing options. As they kept calling around, responding to mailers etc, they found one thing. Everyone offered a daily payment, but gave no insight into why. In working with them, we discovered their debt to income ratios were simply too high for a traditional loan. After 6 months of working on their credit profile, we were able to secure a $150,000 term loan with a monthly payment, at 10.7% APR on a 4 year term. This loan allowed the bakery to open a new location in Rockford, IL and not face cash flow issues from a short term funding option.
Most folks would think that if a big opportunity came up to make a lot of money, you would struggle finding a large sum of money outside of family and friends. In August of 2019, we received a call from a pool supply company in Naples, FL. He stated that his local competition was going out of business, and was selling all of the pool chemicals and supplies for 50% of its worth to move on… The problem? This was $250,000 in cash that was needed. We were able to get a $250,000 12 month term product in 21 hours that allowed him to purchase the inventory and in turn flip it for a massive profit. The funding was paid off in 3 months saving a large sum of the cost of capital, and the profits were used to propel marketing and grow the current business.
Some industries simply are not very funding friendly, and have a very tough time getting funds no matter their credit or financials. We encountered an automobile dealer from Temecula, CA, who was not in great shape. They took a few merchant cash advances, however were on the terms “auto dealers” get which are not great. Not only did they have the need for funds to sell more cars, they faced a serious issue with the $50,000 in balance on daily payments. In 24 hours we were able to pay off the $50,000, and net a new $50,000…. On a monthly payment. This potentially saved the business and gave them a new route of funding outside what some say is the “only option”.
Growth is a real thing, sometimes you must start small to get there. We worked with a small auto parts dealer from Odessa, TX in 2018. They were just getting going, and barely showed enough deposits to get a starter funding option. We explained to them exactly how to leverage this product, and what to do to ensure growth. This was a $5000 funding. After each was paid off, the bank statements kept growing, getting new and bigger amounts. While doing such, our client continued to raise their credit. Over the course of 18 months, our client was able to finance over $500,000 at respectable rates with their credit work done. The client no longer needs funding as they sold their business to another distributor for a massive profit. The ladder has steps, and doing it alone can make the steps a lot wider.