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07-08-2020, 02:28 PM #1
- Join Date
- Apr 2020
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- 21
$20M Yearly, 820 Credit, wants $350k+
Client makes $20M yearly ~$1.5M monthly
Credit: 820
Loans: Paypal and Kabbage
Recently secured EIDL for $150k.
Industry: Cattle Broker
Client originally was looking for an SBA of $350k, but understands the inconveniences that come with them. The need for collateral, a lot paperwork and funding time. That being said he is open to taking a cash advance due to convenience. He is used to Paypal rates and wants something comparable as that is what his margins can support. Who can fund this deal?Last edited by pjfunds; 07-08-2020 at 11:08 PM.
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07-08-2020, 02:34 PM #2
- Join Date
- Feb 2017
- Posts
- 3,464
I'll jump in before Kevin does.... are they a B2B or B2C business? What industry? Perhaps a factor (that's NOT a lot of paperwork with the right factor) is better than an MCA, and will act like a LOC rather than a term product which will give more working capital and is the gift that keeps on giving, client, lender and broker.
https://www.abfunders.com/business-l...ine-of-credit/
https://www.abfunders.com/loan/business-line-of-credit/
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07-08-2020, 02:50 PM #3
- Join Date
- Mar 2015
- Location
- Boynton Beach
- Posts
- 3,508
1.5Mil monthly=$2Mil-$3Mil in AR outstanding if they are B2B. An ABL facility would be more cost effective and take 30 days to close. Factoring would be the quickest route. It would not be as cheap as ABL, but much more cost effective than advance. The client will be happy and YOU will make more money.
What Industry?
How much AR is outstanding?
If there is inventory we could potentially finance some of it if we are financing the AR. It would slow the process down a touch so it would be best to start with AR and step into inventory post closing.
KHKevin Henry
VP-Business Development
Seacoast Business Funding, a division of Seacoast Bank
561-850-9346
Kevin.Henry@SeacoastBF.com
1880 N Congress Ave., Suite 404
Boynton Beach, FL 33426
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07-08-2020, 02:57 PM #4
Depending on the Industry, Fox can fund this deal, but not at Paypal rates. Reach out to me if you are not already signed up.
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07-08-2020, 03:32 PM #5
- Join Date
- Mar 2014
- Location
- Florida
- Posts
- 2,998
Long-Term Funding
SBA 7(a) closes in the range of 30 to 60 days. A benefit of SBA 7(a) is that 1st 6 months payments are paid by the SBA.
I would check your info from the merchant EIDL does not fund up to $150K - they either received PPP $$ or possibly an SBA Bridge Loan?
In response to the Coronavirus (COVID-19) pandemic, small business owners in all U.S. states, Washington D.C., and territories are able to apply for an Economic Injury Disaster Loan advance of up to $10,000. This advance is designed to provide economic relief to businesses that are currently experiencing a temporary loss of revenue. This loan advance will not have to be repaid. Recipients do not have to be approved for a loan in order to receive the advance, but the amount of the loan advance will be deducted from total loan eligibility. SBA will begin accepting new Economic Injury Disaster Loan (EIDL) and EIDL Advance applications on June 15 to qualified small businesses and U.S. agricultural businesse.
Moving forward, this owner should qualify for long-term funding. I rep for an SBA Bank, call me to discuss options.
Dave Lambert, Business Development
dave@fcbankcard.com
Merchant Services Consultant
High Risk Merchant Payment Solutions
SBA 7(a) Loans & Short-Term Funding
Office: 727-233-1111
Skype: fc-financial
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07-08-2020, 03:44 PM #6QFS Group
Info@quickfundingsolutionsgroup.com
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07-08-2020, 08:14 PM #7
- Join Date
- Apr 2015
- Location
- Louisiana
- Posts
- 299
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07-08-2020, 11:07 PM #8
- Join Date
- Apr 2020
- Posts
- 21
The client is a cattle broker.
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07-09-2020, 07:28 AM #9
- Join Date
- Feb 2017
- Posts
- 3,464
So he doesn't even sell the cattle himself, eh?
Let me guess: It's B2B, but it seems like you can't factor that AR. He gets paid after the deal is transacted, by the seller or purchaser, and doesn't actually have AR at all, as it's done COD. Nobody likely owes him money.
Am I right in saying that what you showed is all gross revenue, and his net is probably a very small percentage of that?
If he wants unsecured business LOCs, like Kabbage with bank rates, those are much easier to take care of than an SBA. The LOCs that don't have to report to the personal credit.
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07-09-2020, 08:38 AM #10
- Join Date
- Mar 2015
- Location
- Boynton Beach
- Posts
- 3,508
Livestock brokers are pretty prevalent. Most have agreements with farmer to sell livestock on their behalf and also have agreements with end buyers. You would have to review the AR & AP detailed agings. You will also need to review contracts from sellers and buyers are there are rights in place to protect the farmers. Margins in this business are usually sub-20%. That being said, you will have to find a facility that is very cost effective and a lender/factor that understands the rules regarding farmer's rights.
This in not my first time at the rodeo....... Pun intended.
KHKevin Henry
VP-Business Development
Seacoast Business Funding, a division of Seacoast Bank
561-850-9346
Kevin.Henry@SeacoastBF.com
1880 N Congress Ave., Suite 404
Boynton Beach, FL 33426
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07-09-2020, 11:23 AM #11
- Join Date
- Mar 2014
- Location
- Florida
- Posts
- 2,998
EIDL Grant?
Dave Lambert, Business Development
dave@fcbankcard.com
Merchant Services Consultant
High Risk Merchant Payment Solutions
SBA 7(a) Loans & Short-Term Funding
Office: 727-233-1111
Skype: fc-financial
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07-09-2020, 11:39 AM #12
- Join Date
- Jul 2015
- Posts
- 215
The advance only has to be paid back if the subsequent loan is taken, in which case the grant is considered part of the loan I believe. But if the business ONLY gets the grant up to 10k or 1k per employee that does not in fact need to be paid back. The 150k EIDL that the OP stated was over 30 years @3.75% with the first 12 monthly payments deferred while interest accrues.
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07-16-2020, 03:44 PM #13
- Join Date
- Apr 2020
- Posts
- 21
Thank you everyone for your help, we ended up moving forward on sba 7a
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07-16-2020, 11:44 PM #14
- Join Date
- Jan 2017
- Location
- New York, NY
- Posts
- 59
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08-28-2020, 03:33 PM #15
- Join Date
- Aug 2020
- Posts
- 14
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