So this morning as I was putting off heading into the icy, snowy darkness of Worcester Hills, I happened upon a lengthy, spirited (albeit one way) Facebook thread started by one of our capital partners.
Now, I don't usually commandeer threads, but I noticed a few unanswered questions, so I - you know...jumped in, as it were. I'm sure they won't mind me inserting myself into their advertisement. Or sharing it on LinkedIn...Right?
In my defense, the information is 100% accurate and I did indicate that this particular company was one of the "good ones", so there's that...
You'll notice below that I changed the name of the company to protect the innocent and to not enrage my other wholesale commercial partners by inadvertently stumping for this particular company. Thus, in full disclosure, the name of the company is NOT Ned's House O' Fintech Loans.
Here's the response...
"We're a New England based commercial loan brokerage, and we typically close 2-5 working capital / fintech loans per month (in addition to SBA and CRE loans).
Rates for those loans range from 7.99% up into the 20's and beyond - The factors mentioned in the list below determine how low the rate is and how long the term is (this is not an exhaustive list):
- Sales Revenue
- Credit History
- Industry Type
- Time in Business*
- Existing Debt
- # of business loans currently open
- Even having a particular lender in 1st or 2nd position can have a quantifiable affect on the loan approval.
*Length of time in business and your particular industry type are vastly underrated as they relate to the particulars of the offer.
Pricing is based entirely on risk metrics. Some industries simply default on their loans with greater frequency and thus have higher rates. For example, used auto dealers are very hard to fund due to the somewhat potentially inconsistent nature of their deposits - Fintech folks love deposits, and if they only see a handful every month, that is not a positive to them.
On the other side of the spectrum, if you own a restaurant that has been open for five years and shows a ton of daily deposits, you will have many offers to pick from. If you opened last week, not so much...
Listen, Ned's House O' Fintech Loans is a good company. There are a ton of bad ones out there, but they're not one of them. Depending on the needs of the borrower, we broker to nearly a dozen lenders and banks in this space, and we are VERY CAREFUL who we select to work with. They are one of those companies on our short list of preferred lenders.
To answer your question, there are lenders who will dip into the low 500's. Further, if you are a business who is willing (and able) to do a credit card split funding option, your credit is not really considered at all - The cost of that capital can be relatively high in some cases, so proceed with caution.
Finally, to answer your question 7 paragraphs later, Their minimum credit score is typically 620. They also have a minimum monthly revenue bogey as well.
Hope that helps...
Rob Philion
ComCap"