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Newsletter

June 2022

Funding Focus--ThermoCredit

 

An SBA loan is a funding option for small businesses which are guaranteed by the government. SBA loans are issued by traditional lenders such as banks, but those lenders work with the Small Business Administration to back a percentage of the loan. If your business cannot make payment on the loan, the SBA guarantee protects the bank by covering a portion of what is owed. SBA loans are sought-after because they offer lower interest rates, lower fees, and longer terms than traditional bank loans. However, the strict requirements, paperwork, personal guarantees, and increased wait time mean that SBA loans are not always the ideal option for every business. 

SBA loans are beneficial for businesses without an established credit history and do not qualify for traditional loans. Businesses are still required to meet minimum banking requirements, and meeting those requirements does not assure the loan will be approved. Interested parties need to fill out an SBA Lender Match Form and then apply to an approved SBA lender. Once all paperwork is complete, approval can take multiple weeks. 

ThermoCredit offers a variety of funding alternatives for small businesses which may be easier to qualify for and can be used in conjunction with SBA or other traditional loans. Our funding solutions consider all aspects of a business, including accounts receivable and assets. ThermoCredit works with your business to create an individualized financial solution to provide rapid access to the capital your company needs. Whatever your business goals, ThermoCredit can help you obtain the funding you need to achieve them. 
 

 

 

The Difference Between Debt & Equity Lenders

And why it matters to your business.

 

There are a multitude of ways to fund a business. Two of the most common ones are debt financing and equity financing. But what are the differences between the two? What are their advantages and disadvantages? What does it matter to your business?

 

For a business to operate, it has to have capital. And most businesses use debt financing or equity financing, or some combination of the two, to obtain that capital. Here are some key differences between the two.1

 

  • Debt financing is capital obtained from a loan. There is an expectation that the borrower will need to repay the loan according to the lender’s terms, but the business owner doesn’t give up any portion of the ownership or control of the company to receive this capital.1
     

  • Equity financing comes from the funds obtained through a sale of a portion of the business’ equity to an investor. Unlike debt financing, there’s no expectation or obligation for the business owner to repay the investor for this purchase. Depending on the arrangements made during the investor’s acquisition of a percentage stake in the business, the investor may obtain partial (or even full) control of the business.1

Let ThermoCredit find the best solution for you. As a lender, ThermoCredit can provide capital to your business through debt financing—but our services extend to equity finance options as well. The ThermoCredit team also provides management consulting, M&A services, and more.

 

ThermoCredit can help support you in finding the best options for your business to thrive. It’s our goal to help you maximize the value of your assets and unlock the financial value of your company.

 

At ThermoCredit, we do things a little differently. We’re a funding company that gives our clients an alternative to banks and venture capital. We’ve loaned over $1 billion to hundreds of tech companies over the last 20 years. The ready capital we’ve provided to our clients has helped fund acquisitions, recapitalization, payroll, debt management, and so much more. And what’s more? Generally speaking, we work faster than banks and VCs as well.

 

With ThermoCredit as your lender, you can leverage both debit and equity to your advantage. 

Reference

  1. https://www.investopedia.com/ask/answers/042215/what-are-benefits-company-using-equity-financing-vs-debt-financing.asp

 

Using Cryptocurrencies as Collateral  

Is it the right choice for your business?

 

 

We hear about it every day. We see it everywhere. From the boardroom to the [something casual/non-business], there’s no denying it: Cryptocurrency is hot right now.

 

But why all the buzz about crypto? Does it have business applications? Can it be used as collateral? Let’s de-crypt this currency and find out.

 

It all started with Bitcoin. In 2009, the first and most well-known cryptocurrency Bitcoin came onto the scene. Released by an anonymous developer (or a small group of developers) under the name Satoshi Nakamoto, this virtual system of monetary exchange is defined by two main components. 1,2
 

  • Encryption, using special computer algorithms to encode, which thereby, secure, online transactions 2
     

  • Decentralization with blockchain technology, an electronic data storage structure that distributes these digital assets across a vast, peer-to-peer computer network 2,3

 

Simply put, cryptocurrency (or “crypto” as it’s often referred to as) is a kind of digital money, but instead of being issued by the government, backed by the Federal Reserve, and kept in a central location (like a bank), it isn’t government-based or federally regulated. It exists solely online and is stored across many different, linked computers, which means no individual organization manages the funds.4

 

Does crypto have any applications in the business world? Can it be used as collateral? Well, technically, yes. There are people who use crypto as an approved form of payment among other purposes for their businesses. In the funding world, however, cryptocurrency does not have intrinsic or tangible value meaning that many lenders are unable to accept cryptocurrencies as payment or collateral. After all, the value of cryptocurrency is only what people are willing to pay for it.4,5

 

Is using cryptocurrency as collateral the right move for your business? ThermoCredit may be a better option. We’re a funding company that gives our clients an alternative to banks and venture capital. We’ve loaned over $1 billion to hundreds of tech and communications companies over the last 20 years. The ready capital we’ve provided to our clients has helped fund acquisitions, recapitalization, payroll, debt management, and so much more. And what’s more? Generally speaking, we work faster than banks and VCs as well.

 

If you want to learn more about the alternatives to using crypto as collateral and whether it’s the right move for you and your business, ThermoCredit can help support you in finding the best options for your business to thrive.

References:

  1. https://www.investopedia.com/terms/b/bitcoin.asp 

  2. https://www.investopedia.com/terms/c/cryptocurrency.asp#:~:text=Cryptocurrency%201%20Understanding%20Cryptocurrencies.%20Cryptocurrencies%20are%20systems%20that,Special%20Considerations.%20...%205%20Criticism%20of%20Cryptocurrency.%20

  3. https://www.investopedia.com/terms/b/blockchain.asp

  4. https://www.dummies.com/article/business-careers-money/personal-finance/cryptocurrency/what-is-cryptocurrency-237561/

  5. https://www.marketwatch.com/story/should-you-borrow-against-crypto-here-are-the-risks-11634925934