Growth at What Cost?:

How to Fund Wisely in 2022

 

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Growing your business requires funds, but not all funding options meet the

needs of every company. Acquiring capital takes a significant amount of time

and choosing the right funding source can be the difference between capitalizing

on opportunities and sitting on the sidelines.  The right partner can ensure your

company meets its objectives and growth plans.  

 

Here are some essential steps to consider when looking for the

right funding partner:

 

1. Determine your financial needs

Before you begin searching for funding options, determine how much and what type of financial support your business will need.  Consider your short and long-term goals, factoring in how much capital you anticipate needing in conjunction with your current expenditures. Choosing the right financial partner with experience in your industry should be a critical factor in your decision-making process.  A partner with knowledge of your industry can help you anticipate the unexpected and help navigate obstacles you might not be aware of.  

 

2. How quickly can we obtain funding?

How quickly you can get your funding is an important consideration. While large-scale lenders like banks might seem appealing, they simply hold money and generically loan money. Alternative lenders can aid your company by determining the types of funds that would best suit your growth plan.  ThermoCredit provides funding for thousands of companies in the Technology and Telecom sector and has become a trusted partner and consultant for companies requiring rapid access to capital. 

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3. Consider your funding options

Traditional bank loans typically offer low-interest rates; however, banks can

be difficult to work with.  Some businesses fail to qualify because of the

draconian approval requirements and the massive amount of years-old financial

documentation needed.  SBA loans require similar paperwork but offer a

wider variety of options.  Oftentimes this can delay approval for your loan

by months if it gets approved at all. 

 

Alternative funders and online lenders offer more flexible lending options for

businesses that may not meet the bank loan requirements loans or need

access to funds faster than the bank can accommodate. 

 

ThermoCredit evaluates your business plan and assets when determining your funding options, all with the purpose of helping you get rapid access to capital.  With ThermoCredit’s numerous funding programs, a financial package can be customized to meet your needs.

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4. Choose the funding plan that will allow your business to thrive

At ThermoCredit, our goal is always to help you fund your business goals quickly while allowing you to maintain control of your company. ThermoCredit is a relationship-based company with financial solutions which will benefit your company for years to come.  Our team is here to help you create a specific growth plan and work with you as your plans go forward.  Success is our hallmark.

 

Visit thermocredit.com today to learn more.

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As the Fed raises interest rates, am I too late for affordable funding?

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With Fed interest rate hikes looming, consumers and businesses alike are concerned for the days ahead.  Inflation is at a 10-year high and the Fed has indicated we could be expecting multiple interest rate increases this year alone, which means the cost of borrowing money is about to go up.  Be prepared for credit card interest rate hikes, mortgage prices to rise, and the cost of business loans to increase.  Is now the time to recapitalize or make that long-planned business investment or even that acquisition?  The answer is:  Yes.

Compared to interest rates over the past 20 years, loan interest rates are still very low and affordable.  Lenders are still funding business initiatives and show no signs of slowing, even when faced with increased lending costs.  

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The American economy is healthy and charging forward, however, waiting can be a costly mistake.  Now is the time to lock in your rate, before rates increase by an anticipated 1  - 1.5% per annum by the end of 2022.  Small rate hikes add up.  The last time the Fed raised rates, it raised them nine times in a three-year period.

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ThermoCredit has the financial resources available to help fund your company’s growth, acquisitions, and infrastructure needs. 

 

Contact ThermoCredit today for more information and to lock your rate in today.

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Is The Interest Rate Important?

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Like most consumers, businesses are very aware of the impact interest rates

can have on finances.  Prolonged payments at high-interest rates can be

onerous for any organization.  The challenge is to understand what interest

rates are and how you can leverage them to your advantage.  There are

situations when interest rates should be the least of your company’s concerns.

Consider the case of an acquisition by your company.  You and your team have

identified an ideal takeover target.  They are cash flow positive but are having

issues expanding in the marketplace.  Your company has determined the

takeover target would be a good fit for your line of offerings and at the

current income rate, the deal would pay for itself in 8 months.  Your

prospective acquisition target is in the market for a buyer and may be

considering other suitors, however, your company does not have the

working capital to complete a cash transaction.   You are now faced with 3 options:

 

1. Go to your bank and request a loan, which entails a lengthy due diligence process that includes providing the bank with multiple years of records and can take months to be approved.  In many cases the bank will provide a favorable interest rate, but generally will not fund more than 80% of the transaction’s cost, meaning a secondary lender will be required.  By the time the bank and secondary lender come to the table with the needed capital, the transaction likely will have been completed with a competitor.

2. Find a cash-rich partner to bring in on the deal, which dilutes your ownership and control of the acquisition.  Situations like these generally involve time-consuming legal agreements and prolonged partner negotiations, which could jeopardize the ability of your company to move swiftly.

3. Secure financing from an alternative lender, which while having a slightly higher interest rate than a bank, presents fewer roadblocks to obtaining your needed capital.  Alternative lenders have the ability to not only finance 100% of your deal, but they provide the needed cash in weeks, not months.  Alternative lenders focus more on your business plans, instead of your company’s financial history.

 

The actual cost of interest is less relevant in this case because the acquisition will pay for itself in 8 months, meaning the loan will be paid off and your company will be realizing positive cash flow from the acquisition in less than a year.   The most important part of the acquisition is expediency.  The company being acquired is on the market and your company needs quick access to capital.  If you cannot make the deal expeditiously, you risk losing out to your competition, which is a very real scenario.

The question of interest rates is important; however, the acquisition is more important because of what it does for your company’s bottom line.  Over the course of a few months, the difference in interest rates becomes negligible, while the outcome is essential for your business's success.

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Contact ThermoCredit today to learn more about accessing working capital to help meet your business objectives.