Newsletter
Is an Alternative Lender Right for Your Business?
Securing venture capital (VC) funds or bank loans are well-worn paths to financing a start-up or growing a business. But what If a company doesn’t qualify or can’t wait for conventional loans or VC funding? What if owners prefer to retain autonomy and full equity? Other lending options are out there.
Alternative lenders can provide loans and financing with faster approval than conventional lenders, with lower lending minimums. They typically have simpler applications, higher approval rates and more flexibility on loan terms and conditions.
Alternative lenders can offer term loans, business lines of credit, cash advances, receivables or revenue-based financing, inventory loans, equipment financing, and more. They can even help a company obtain low-interest Small Business Administration (SBA) loans or micro-venture capital—easier to get than conventional VC funding. A non-traditional lender may also help arrange mezzanine financing, which is a hybrid of debt and equity funding, or facilitates mergers and acquisitions (M&A).
The perfect lending solution will depend on your specific business needs and your industry. An alternative lender can provide a customized financing package that allows lenders to share investment risk and business owners to get the financing they need quickly so they can focus on running their businesses.
Whatever your financing needs are, ThermoCredit can deliver the right funding options for your business. We’re a funding company that gives our clients an alternative to banks and VCs. ThermoCredit doesn’t take equity in your company in exchange for funding, meaning you remain in control of your business.
ThermoCredit has loaned over $1 billion to hundreds of tech and communications companies over the last 20 years. We provide ready capital to fund acquisitions, recapitalization, payroll, debt management and so much more—regardless of the size of your company. Most importantly, ThermoCredit’s approval process is usually much faster than you would experience with a bank.
Call ThermoCredit to find the right funding alternative for you? Call us at 504-975-8599 or email us at Seth@ThermoCredit.com to schedule your free consultation today.
References
An Untouched Line of Credit Can be an Emergency Lifeline
An untouched line of credit can be a lifeline for your business when you’re facing a revenue downturn, business disruption, or an emergency. You can access the credit as needed and you can use some or all of it, depending on your requirements, while you continue to operate your business.
Why is having emergency credit important? The median small business only has enough cash reserves to pay typical expenses for a month—and that may not cover any extra costs required. Even more alarming, twenty-five percent of small businesses only have enough cash on hand for 13 days of normal expenses.
How much credit do you need? A good rule is to have at least three months’ worth of business expenses available—and ideally up to 24 months. The exact amount of emergency credit your business may need will be determined by factors such as inventory, receivables, industry, company structure, and seasonal business cycles.
If you have access to emergency credit, you won’t have to use up company cash reserves or dip into personal funds. You can avoid using credit cards, paying late fees on overdue bills, or being unable to meet payroll.
There are other advantages to having a line of emergency credit. You’ll help improve your business credit score. You only have to pay interest when you draw funds and your available credit will increase again as you pay down the balance. The interest on a business line of credit is generally lower than on credit cards or emergency loans. Best of all, you won’t have the stress of trying to secure funding or credit for your business during a crisis.
Sources:
The Balance: How to Set Up an Emergency Fund For Your Small Business: https://www.thebalancemoney.com/how-to-set-up-an-emergency-fund-for-your-small-business-5072906
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Bank of America: What is a Business Line of Credit & How Does It Work?: https://www.bankofamerica.com/smallbusiness/business-financing/learn/understanding-business-lines-of-credit/
Financing Solutions: Emergency Business Lines of Credit: Are They Necessary?: https://financingsolutionsnow.com/emergency-business-lines-of-credit/
Investopedia: Line of Credit (LOC) Definition, Types and Examples: https://www.investopedia.com/terms/l/lineofcredit.asp
JP Morgan Chase: Cash is King: Flows, Balances and Buffer Days: https://www.jpmorganchase.com/institute/research/small-business/report-cash-flows-balances-and-buffer-days.htm
Thermocredit: Business Credit Rating Scores: What You Need to Know. https://www.thermocredit.com/august-newsletter
Why You Should Attend the Funding Strategies Conference
In partnership with, The Funding University, ThermoCredit, Channel Vision magazine, and RWS (Remote Work Solutions), The Funding Strategies Conference continues to offer a wide-ranging slate of free financial webinars that provide much-needed objective resources to business leaders with fiduciary responsibilities.
Livestreamed webinars include roundtable discussions focusing on various topics related to alternative funding. Relying on advice from field experts who track market shifts can be indispensable. The conference brings together experienced professionals from every segment of the financial industry who provide insight into the latest trends, strategies, and financial obstacles in our ever-changing financial marketplace.
An educated borrower is a borrower who understands their objectives and can identify risks to avoid.
And as credit markets have tightened, the funding landscape has changed, which means understanding the options available to your company is even more critical than before.
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The upcoming webinar on December 8, 2022, focuses on securing smart loans for small businesses. Many factors come into play when seeking funding for a small business or start-up. Experts in the field—representing banks, SBA lenders, alternative lenders, venture capital, and angel and private equity investors—will provide objective guidance about the best way to secure capital to grow your business. Learn about how to fund your company's growth plans, and ask questions to gain insight from financial gurus.
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