First and foremost, it’s important to provide a brief background on the state of the industry in the small business funding space. Simply put, it’s turned into the wild, wild west. Literally thousands of small business owners throughout Metro Detroit and all across the country are getting burned. And getting burned bad. Remember the mortgage burst a few years ago? Well, here we go again. There are NO qualifications whatsoever to work at a small business funding company, and there is NO regulation behind the industry. So, you can probably guess the outcome of a moneymaking industry with no regulation behind it, and no qualifications required to “sell” small business loans.
Online lenders and loan brokers are issuing pre-underwritten loan quotes that aren’t worth the paper they’re written on. That’s right… They’re fake. Others issue made up loan offers, followed by bait and switch funding contracts; just when you think your money is being wired, they change the funding amount and terms. Another popular one by online lenders, “sign this funding contract at a higher rate, and we’ll lower it in 30 days.” We’ve never once heard of a lender actually lowering the rate in 30 days, or any time after signing the loan contract for that matter. You name it, and we’ve seen it. Between unqualified loan brokers intentionally trying to bury small business owners in massive debt for big commissions, online lenders switching it up last second on unsuspecting business owners, you can't imagine the craziness that goes on. At least 5 or 6 small business owners come to us every single week pleading for help, as they got burned by a shady loan broker or predatory lender, and they are days away from going out of business. In turn, too many small business owners are gambling with their business by listening to what they want to hear, and ignoring what they need to hear.
Why are we telling you this? Because we want your business to prosper. That’s why dealing with a local Metro Detroit small business funding company is so important. We live in Metro Detroit. We shop in Metro Detroit. We care about Metro Detroit. We have provided financing and will continue to provide financing to many of the small businesses we shop at ourselves. We have a vested interest in Metro Detroit. It's not just your community, it's our community. Small businesses are the backbone of our economy and we all want to live in thriving, sustainable communities. Automated loan shopping websites powered by tech algorithms in the middle of nowhere could care less about the future of your business. We do! Supporting Metro Detroit’s small businesses isn’t just what we do, it’s who we are!
So......What small business loan options are available for Metro Detroit small business owners? Glad you asked. Let’s get started.
Metro Detroit Small Business Owners Have the Following Non-Bank Funding Options:
Small Business Cash Flow Loans -
For this type of small business financing, lenders provide you funds and use your future expected cash flow as collateral for the loan. You’re essentially borrowing from cash that you expect to receive in the future by giving the lender the rights to a predetermined amount of these receivables. Small Business cash flow loans are primarily used for working capital, or to take advantage of short-term ROI opportunities. Your credit scores will usually be checked, but they play less of a role. As the name indicates, a lender is more concerned with inspecting your cash flow (usually bank statements) to approve your application. Turnaround time is another great feature of a cash flow loan, as funding usually takes place in a matter of days, sometimes same day.
Cash flow loans can be obtained despite low credit history and low exiting capital. A small business in Metro Detroit with only a few months of operating history also obtain cash flow loans from LVRG Funding. Lenders for small business cash flow loans do not consider existing assets of borrower, but counts on future cash flow projections. In case of traditional banks, it’ll be nearly impossible to obtain anything if a company does not have enough assets, a very good credit history, or no credit history at all.
Moreover, small businesses need emergency back-up that should be quick to arrive. Even small setbacks can damage cash flow of a start-up and discourage it completely if re-enforcement didn’t arrive immediately. This is where cash flow loan providers enjoy advantage over traditional banks.
If you apply for loan with a traditional bank, then you need patience because the formalities and process may take from some weeks to months before you actually get your loan approved. Even after approval, you will have to wait before you get your hands on money. Small businesses, in need of quick re-enforcement, will definitely prefer a quicker source of loan. Cash flow loans are passed in hours, not in days or weeks. That’s a big advantage over traditional banks. Despite being pricier than a bank, cash flow loan providers are favored by small businesses because of this very benefit.
Small Business Revenue Based Loan -
There’s never been a better time or more choices for small and medium-sized businesses that need capital. And what business in Metro Detroit doesn't? Expanding, purchasing equipment, and evening out cash flow can all be managed with business financing. But business loans from traditional financial institutions are not the way to go for today’s businesses on the grow. And of course, there will always be emergencies and cash flow gaps that need to be quickly managed with working capital.
That’s why revenue based loans are a quick growing working capital solution among small and medium-sized businesses in Metro Detroit. They’re the most prudent option for business owners needing capital to fuel or accelerate their businesses’ growth.
Traditional bank loans are often made for as long as 25 years and require mountains of documentation and financial statements. Not to mention, do you really want all of your personal and business assets locked up for 25 years, paying off a $50,000 2017 marketing campaign in 2042? No way! And then there’s the waiting period, for both an approval and for funding, which can be weeks or months. Don't forget the collateral you'll need for a bank loan, including your home, life insurance policies and up to 30% of the loan amount in cash. Additionally, among banking institutions, the credit turn-down rate for small businesses is rather high (roughly 80%) and doesn't show signs of improving significantly.
Revenue based financing and small business loans can be used for any legitimate business expense, from remodeling or business expansion to buying equipment to launching a new marketing effort. The key here is growth and our business funding options are the perfect solution for business owners looking to take advantage of growth opportunities. These short-term loans for business are popular across every industry throughout Metro Detroit, from manufacturing and transportation companies to restaurants and retail stores. Short term short-term business loans are an efficient and cost-effective source of capital, when you need it.
Short-term financing can help businesses build or accelerate revenue in ways they couldn't otherwise. And at the same time, working capital solutions can help business owners negotiate better discounts or terms with vendors and avoid longer-term charges and fees, saving money in the long run. There’s no question why revenue based loans and cash flow financing are catching fire in Wayne County, Oakland County, and Macomb County. They’re the ultimate financial win-win for small and medium-sized businesses throughout Metro Detroit.
Small Business Working Capital Loan -
Nobody faces more challenges on a daily basis than business owners. In fact, for owners of small and medium sized businesses in Metro Detroit, handling many different challenges is the source of great satisfaction and some headaches, too.
But when local business owners are asked to name their greatest challenge, one thing tends to top the list most often; accessing working capital to manage cash flow. In other words, making sure there is enough capital flowing in to cover everything that needs to flow out.
There are a variety of reasons why cash flow can be a steep challenge for small business owners. Needs can precede revenue. Or perhaps you’re getting paid more slowly than you’d like. Or if you’re a seasonal business, a swimsuit store for example, or golf shop, you have peak summer sales months which require that revenue to stretch across your off-season months.
Often, business owners can optimize cash flow by negotiating longer payment cycles with creditors and encouraging debtors to pay in shorter time periods. But there are other solutions that can help you sail through the lean months with plenty of working capital on hand: a short term business loan or merchant cash advance.
You can put a small business loan “to work” immediately for your business, whether it means meeting payroll for a few months, negotiating a great deal on inventory for paying in cash or hiring and training those new employees you need. Our business financing solutions for working capital can help you operate without missing a beat or even take advantage of an unexpected or one time business opportunity.
ACH Small Business Cash Advance -
For starters, an ACH small business cash advance can also be referred to as a small business cash flow loan, small business revenue based loan or a small business merchant cash advance. The ACH designation really applies to how the lender is paid. ACH or Automated Clearing House, refers to the lenders ability to withdraw an agreed upon amount directly from your checking account at agreed upon intervals, typically daily or weekly. This is different from factoring your accounts receivable (A/R), because instead of billing your customers and collecting from them, they directly access your checking account in much the same way automated payments might go to you mortgage lender or a utility company from your personal checking account.
An ACH small business loan, much like factoring or an MCA loan, should be considered a small business short-term financing option. The cost of the capital is more expensive, in other words you’ll pay a higher interest rate, but you’ll be able to access that capital much quicker than a traditional term loan from the bank or other financial institution.
Because a small business ACH loan lender will be able to pull your payment directly from your checking account, it reduces risk to the lender making it possible for small business owners with a healthy checking account but less-than-perfect credit to get a loan.
Merchant Cash Advance -
Merchant cash advance (MCA) can provide business borrowers with an upfront fixed amount of cash in as little as 24 hours. The funding amount is based upon a percentage of the businesses credit card receivables or daily cash balances using historical credit card receipts and bank statements to determine the initial advance. The business pays back the advance, plus a percentage, often referred to as a discount factor, from a portion of their credit card receivables or cash available plus a percentage which is often referred to as a discount factor. The remittances are drawn from the business customer on a daily, weekly or monthly basis until the obligation has been met. An MCA is not technically a small business loan and as such MCA's are not limited in what rates they charge or what terms they establish and therefore often have high interest rates. For this reason it is very important for a business owner to be completely aware of how the MCA product works and how it could affect their business. MCA's are good options for small business owners in Metro Detroit who may not have strong credit but have lots of credit card activity and need financing quickly.
Small Business Line of Credit -
A small business line of credit is also known as a revolving loan, which works similarly to a credit card. Instead of borrowing a fixed amount of money upfront and then pay it back in monthly installments, a business line of credit gives your company permission to borrow a certain amount of money up to a certain credit limit that's set in advance by the lender. A line of credit can be a very flexible option to access cash on an as-needed basis. Many companies choose to set up a small business line of credit in order to navigate short-term cash flow shortfalls and manage their operating expenses. With a line of credit, you can borrow as much or as little as you need each month, and then repay the money over time or all at once—as long as you make your minimum payments and manage your credit limit according to the conditions of the agreement with your lender.
Preferred Rate Loan -
With monthly fees starting at 1.25% of the original funding amount, get financing* that works for your business. Whether you’re launching a new product, buying new equipment, or expanding operations, let us help you do great things with the Preferred Rate Loan*. With monthly fees starting at 1.25% of the original funding amount, qualified borrowers that have been in business for at least 2 years, can get more loan for less money.
Here are a few reasons why Metro Detroit small business owners may need the financing mentioned above:
Bridging a seasonal cash flow bump - Many seasonal businesses in Metro Detroit sometimes require a little extra capital to meet expenses as they move from one season to the other.
Unexpected need for additional capital - It’s not uncommon for businesses to experience unexpected expenses like a major plumbing problem or other maintenance issue they might not have the cash flow to cover.
New project start-up costs - Ramping up for a new project or a new customer contract sometimes requires additional resources that might exceed a business’ ability to cover with cash flow, but will be recouped in 60 or 90 days.
Emergency repairs to business-critical equipment - When equipment necessary to the operation of your business fails, it likely doesn’t make sense to wait several weeks to start repairs. A temporary cash flow loan can be a good way to access capital to start those repairs right away.
An opportunity to purchase quick-turnaround inventory at a discount - A short-term loan could be a good solution to take advantage of an opportunity to purchase inventory that has the potential to increase profits.
Before you gamble on the future of your business by downloading a business loan off a questionable website, or trust the future of your business in the hands of a loan broker who’s misleading you for a commission check, call LVRG at (855) 998-LVRG. LVRG Funding is a “local” small business funding company with a vested interest in Metro Detroit. That’s right, we’re a locally owned and locally operated small business, just like you. We are established, and trusted, successfully funding hundreds of small business all across Metro Detroit. We combine data-crunching software with a human touch to come up with affordable funding solutions that best fit your needs. LVRG is a team of the right people, working with the right data, getting you the right-sized funding for your business. We know that time is of the essence when it comes to obtaining financing and our quick closing time will ensure that you get the money you need, when you need it. Headquartered in Detroit's Historic Ford Building, we are a “local” finance company dedicated to helping the local small business community thrive and grow. Give us a call today (855) 998-LVRG, we're doing what’s right and we’re here to help!