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Newsletter

December 2022

ThermoCredit Funds the Future

Since 2002, ThermoCredit has provided more than $1,000,000,000 in funding to our clients. We have supported hundreds of opportunities in the communications and technology industry, focusing our initial funding efforts on telecommunications providers, wireless companies, software as a service (SaaS), and technology and hardware manufacturers.

Going forward, ThermoCredit’s strategy is evolving beyond telecom and technology to expand on funding next generation industries. We are addressing the needs of rapidly advancing fields like power production, eco-friendly sourcing company, and sustainable organizations delivering groundbreaking medical research to the world. We understand the challenges small and medium-sized businesses face when trying to secure funding, and we are prepared to help your company succeed.

 

We support green energy, alternative fuels, and bio-sciences. Supporting sustainable commerce is a win-win. Relying on renewable energy can help reduce energy imports, reduce fossil fuel use, and address climate goals.

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We are also now lending to:

 

  • Wind Turbine Manufacturers

  • True Tech

  • Solar Power Providers

  • Water Treatment and Desalinization Companies

  • Hydroponics, Agriculture, Fisheries, and Forest-based Enterprises

  • Renewable Energy/Green Energy Production

  • Sustainable Businesses

  • Technology Providers

  • Pharmaceutical Research

  • Green Finance

  • Eco-friendly Retail

  • Sustainable Construction Materials

  • Eco-friendly Transportation Providers

 

ThermoCredit helps businesses of all sizes, with loans ranging from $5,000 to millions for growth, acquisition, expansion, and more. Our funding is not only reliable—it’s innovative. A specialized funding plan from ThermoCredit can make all the difference in your success.

 

Let us know how we can help fund your future.

Why Won't the Bank Fund More Than 80% of my Business Loan?

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You’ve just had your SME (Small to Medium Enterprise) loan request approved by a bank. But only the majority of the total amount requested was approved. Why didn’t the bank fund the full amount?

 

You’ve actually done better than 80% of small businesses, which is the number that doesn’t get approved for traditional bank loans. You also did well to get most of your funding approved. Your company is likely to have a high business credit score, healthy annual revenue, and a strong business plan, meaning the bank is confident you’ll be able to repay their loan on time.

Traditional lenders use a calculation called a debt service coverage ratio (DSCR) for determining which companies qualify for a loan—and how much. The DSCR equals your business net annual income divided by outstanding debt. Most banks want to ensure that business revenue is 110% greater than debt. Lending you more than 80% of the amount requested may exceed the bank’s ideal DSCR for your business.

 

There are other reasons the bank may not fully fund your requested amount: bank policy (this can vary from lender to lender), your company’s length of time in business, your industry, outstanding or delayed account receivables or the amount of company collateral. The bank may also have considered your personal income and debt when calculating your company DSCR, if you’re the company owner.

 

For more information about how you can obtain whatever the bank did not fund or even how to finance 100% of your next venture, contact ThermoCredit to learn more about your financial options.  Visit www.thermocredit.com or contact us at 504-975-5899.

 

Sources:

 

BPlans: https://articles.bplans.com/why-banks-are-no-longer-lending-to-small-businesses/

 

First Business Bank: https://firstbusiness.bank/resource-center/insiders-guide-to-commercial-loan-decisions/

 

Fundera: https://www.fundera.com/business-loans/guides/how-much-will-bank-loan-for-business

 

Lendio: https://www.lendio.com/blog/determine-correct-business-loan-amount/

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Interest Rates: The Real Cost of Doing Business

All companies require equipment to run their business. Equipment is any physical asset—not including real estate—that a company needs for day-to-day operations. This can include production equipment, computers, servers, satellites, vehicles, and even office furniture. If a company is new, or in a growth phase, equipment costs can be daunting—or prohibitive—when combined with other expenses such as staffing, utilities, rent, or advertising. Being able to obtain equipment financing frees up capital for other needs and may be a crucial way for a new company to start operations. Equipment financing takes two forms: purchase loans and leasing.

A lender providing equipment financing can use the equipment itself as collateral for the loan. They may be willing to lend your company the full value of the equipment. After your business has repaid the loan, your company owns the equipment outright. An asset that is free and clear of any debts—or encumbrances—is unencumbered. A  business can more easily sell or transfer unencumbered assets, claim depreciation on them for tax purposes or use them as collateral for future loans. However, your business must be able to meet loan repayments or you risk lowering your business credit score or even losing the equipment.

 

Leasing equipment may be more affordable—especially for a new business. By not having to buy equipment upfront, an owner can save capital for other expenses and make ongoing lease payments. A lease agreement often has a lower rate of interest and doesn’t require a down payment. Making lease payments will help a business build up a good credit rating if the company is new, has a low credit score, or doesn’t qualify for a loan. Leasing may also be a good option if a business uses equipment that becomes quickly obsolete and needs to be replaced or upgraded on a regular basis. For example, a design company that needs to use the latest computer models and software packages to stay competitive may want to replace their equipment annually.

 

 

Sources:

 

Corporate Finance Institute: Equipment Finance: https://bit.ly/3uQpW6f

 

Investopedia: Unencumbered: https://bit.ly/3W14AyJ

 

Value Penguin: Equipment Financing: https://bit.ly/3UTrhni

Funding Loan Focus – Equipment Financing

Becoming well-versed in the subject of interest rates can be a real asset to your business. Interest rates vary and definitely affect the cost of doing business.

 

With interest rates on the rise, consumers pay more interest to lenders and your business may find customers have less disposable income to spend. Businesses with variable interest rate loans may find themselves in tough situations and it may be difficult to take out new loans to manage expenses or expand the business.

Funding Strategies Conference

INTEREST RATES:

The Real Cost of Doing Business 

Thursday, March 9, 2023

2 PM – 3 PM ET

 

A $29.99 Value!

Register for FREE by 1/31/22 using the code INTEREST23.

 www.fundingstrategies.net

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