Funding Broker Vs. Direct Lender

There will come a time when you will seek capital to help grow your business! It is important to understand that you have options, choices and you decide what, how, when, who, where you receive the capital from. Options mean what types of capital available to you. Choices refers to programs, what type of capital you want, how refers to amount of capital you need, when refers to when you would like to receive the capital, who refers to which company you want to do business with and where refers to lenders location, ability to service, etc. In understanding this we have assembled an overview chart of broker vs. direct lender to educate you so the best decision can be reached. Here is why you should consider each: Options: Brokers will have multiple lenders for multiple loan products. Multiple lenders means better bargaining position regarding rates, terms and fees. Direct Lenders will only have access to their loan programs.  As brokers Altima is consistently able to achieve better terms, rates, etc. for our clients by negotiating one lender against another. Timeliness: A brokers ability to quickly place an applicant with the correct lending source based on lenders criteria means quicker funding. Direct Lenders have to lump everyone into their specific guidelines and if you don’t fit, they cannot provide you with the necessary funds, meaning wasted time. Every lender has a different risk tolerance and appetite. I.e. Construction Vs. Retail, 800 Fico Vs. 520, etc. It’s important to know this for effective and time efficient outcomes. We research lenders loan programs to ensure borrower meets their guidelines for faster...

Where to go when the bank says NO?

Bummer! The bank said NO! You were well-prepared, walked into your bank confident in your brilliant business idea for your start-up or business plan for your expansion and growth — and you are walking out empty-handed… It happens everyday. In this economic climate it has become increasingly difficult to secure capital because all the traditional sources of funding have contracted to a point that they are almost non-existent. This doesn’t mean you can not obtain funding. Here are 5 ways to leverage the many alternative sources available to you: Merchant Funding: A cash advance, as a lump-sum, is obtained against future credit card receivables. Revenue based financing: Unrestricted capital for growth is provided in exchange for a small percentage of future years’ revenues. Factoring: Through a financial transaction, a business sells its account receivables (i.e. invoices) to a 3rd party (called a factor) at a discount. Asset-based lending: Capital is secured by using “hard” assets such as land, equipment, buildings, inventory, purchase orders, contracts, receivables, etc., as collateral. Equipment leasing: A firm can obtain the use of certain fixed assets for which it must pay a series of contractual, periodic, tax deductible payments. What are the trade-offs? What does the future of your capital plan look like? Choosing the right funding method for your company is of the utmost importance for your success! For more information on planning, funding, starting, and growing your business Contact Us Author: Andre F. Wilson Sr., Managing Partner, Altima Business...

10 Options to Avoid the 5 C’s of Credit

Conventional financing operates under the premise of the 5 C’s: Cash, Collateral, Capacity, Character & Conditions Cash refers to the contribution borrower will invest. Collateral refers to assets to be pledged, i.e. home, retirement, etc. Capacity refers to the measurement the lenders use to determine borrowers ability to repay loan. I.e. cash flow, existing debt, etc. Character refers to a borrower’s reputation. i.e. credit report Conditions refer to the loan amount and the interest rate the lender would consider acceptable risk to lend to borrower. As entrepreneurs we are often willing to sacrifice one or all of these in order to achieve the dream. So what if you don’t have the 5 C’s? Don’t panic, here are 10 options to secure capital from alternative resources: Factoring Asset Based Lending Merchant Funding Contract/Purchase Order Financing Hard Money Loans Debtor In Possession (DIP) Financing Equipment Leasing Asset Backed Working Capital/Sale & Leaseback Funding Business Loans Micro-Loans For more information on planning, funding, starting, and growing your business Contact Us   Author: Andre F. Wilson Sr., Managing Partner, Altima Business...