Paid To Create Podcast
Fireside chats with some of today’s best and brightest Creators
Welcome to Paid To Create, a podcast that features insightful conversations with some of today's most successful entrepreneurs and small business owners.
Join us as we delve into the minds of coaches, consultants, agencies, and experts from various industries to discuss their experiences, strategies, and journeys to success.
Our guests have a wealth of knowledge and expertise in their respective fields and will share their insights on what it takes as a creator to build and grow a successful business.
Each episode is a chance to gain practical advice and inspiration from those who have been through the ups and downs of entrepreneurship.
Our goal is to provide valuable insights and actionable tips to help you take your business to the next level.
Paid To Create Podcast
S2E5 Unlocking Business Funding: A Guide to Loans, Credit, and Revenue-Based Financing
Ready to fund your business the smart way? Join Ricky Brazee, owner of Business Funds Marketplace, as he shares how and when to seek additional capital—without relying on traditional banks. From revenue-based financing to the importance of cash flow and credit, Ricky gives you the inside track on what lenders really want in a loan application. You'll learn why equipment financing demands higher credit scores, how to build business credit, and how to avoid common loan pitfalls. Whether you're expanding or just need new equipment, this episode is packed with insights to help you make savvy financial decisions and unlock growth for your business.
Listen or watch all episodes of Paid to Create at paidtocreatepodcast.com
I just really want to stress that taking money is very common. It's not like you know. You're doing something that nobody's ever done before. I'd say like 90% of businesses have taken money from somebody or started it that way. Do not let the business credit game pass you by because you are not educated on it or you think that that's too expensive to borrow money.
Speaker 2:Hi, welcome to another episode of Pay2Create. I am your host, Sarah Jenkins, and alongside me today is my baby daddy and business owner.
Speaker 1:Ricky Brazy of Business Funds Marketplace.
Speaker 2:Well done. What is Business Funds Marketplace?
Speaker 1:Thanks, for having me. It's an online lending marketplace for businesses seeking funding.
Speaker 2:Now, if you're a business owner, how long would you be in business before you decide to seek funding? Not for your lemonade stand.
Speaker 1:We're probably not looking for the first year in business. You're probably just getting everything sorted out. You're probably getting a business bank account, ein, figuring out how to set up marketing, hire people, start to delegate tasks that you're probably doing as a business owner, as we all do. And I'd say probably after the first year you start looking at funding, start to seek any kind of opportunity to build your business credit at that time.
Speaker 2:If you're going back to hiring SOPs, who's answering phones or whatever, at what point? If you're starting a business, would you say, maybe I need a little extra capital to grow or continue.
Speaker 1:When you have an opportunity to use the money. So we lend something called working capital. That's the product that we lend, it's just money for the business. But it's called working capital because you're supposed to put the capital to work right away. So you come and take money when you can inject it into your company and you can use it right away for an opportunity that you see fit. And take money when you can inject it into your company and you can use it right away for an opportunity that you see fit.
Speaker 2:If you are the lender or the broker for lending, what opportunities would you not see fit?
Speaker 1:So lending is based upon risk. So we are going to do an assessment, a small assessment. So they look at three months of bank statements, typically six months of bank statements. They'll take a look at your cashflow. Make sure you can handle a loan, so they look at three months of bank statements, typically six months of bank statements. So take a look at your cash flow. Make sure you can handle a loan, so they'll look at your average, your balances. Also, look at your business too. So they'll look at Secretary of State and look at your time in business, look you up on Dun Bradstreet, look at your business credit and just make sure that you can handle the loan in a manageable, low-impact way.
Speaker 2:So when you say somebody should put their working capital to work for them, their loan to work right away in their company, what might be a good example of that?
Speaker 1:Say you're a contractor any kind of contractor, plumbing contractor, say you're a plumbing contractor, okay, and Not a euphemism. You want to bid on some plumbing jobs Not a euphemism. You want to bid on some plumbing jobs. So there's going to be some competition, and sometimes when you're bidding, it's not just how much you're going to cost, it's the terms of your arrangement too. So you might want to say, hey, you don't need to pay me 50% up front in order to complete this job. I don't need you to fund me so I can pay my materials and pay my guys. I can handle that as a business on my own. You might win that contract and win that job because you didn't have to borrow money to get the job started. You just started because you had capital. So you can gain more relationships through being more liquid and having better cash flow as a business and being able to extend those terms to your clients.
Speaker 2:Okay. So if someone comes to you for a loan, why wouldn't they go to a bank?
Speaker 1:Banks aren't lending money.
Speaker 2:Well, some money have a mortgage.
Speaker 1:So these are uncollateralized loans, so you don't have to put up your. What does that mean? Yeah, exactly, so you don't have to put up your house. You don't have to put up your car, you don't have to put up any assets, so anything that you own. You don't have to say, hey, if I don't pay this loan, you get this. You're not collateralizing your loan, so it's under the business credit, it's not under your personal credit, so you're building your business credit in turn. But also, if things go sideways, you're protected by your LLC.
Speaker 2:Okay. So if you have no collateral, why would someone like you or bigger lenders give the loan in the first place? What are you looking for?
Speaker 1:It's based upon your cash loan. If you can handle the loan in a way it's called revenue-based finance. So they're looking at, hey, in June, july and August in last quarter they brought in $300,000 in sales and here is last year's tax return and they did 1.3 million. They're going to do a run rate calculation. They're going to look at what you've been doing over the last three months. Extrapolate that over a whole year, so times it by four and you have your run rate. So you know what you're probably or projected to make it a revenue for your business.
Speaker 2:Why wouldn't a regular bank look at the revenue realm and say that we could give you money?
Speaker 1:It's too risky and they have their money thrown at plenty of good other things.
Speaker 2:Because there's no collateral.
Speaker 1:Yeah, they're just. They are not the backbone of the small business owner economy. They're just not. Small business owners don't have a lot of assets. They might have their home, they might have their car, but other than that, they're contractors, medical practitioners, restaurant owners, all the above.
Speaker 2:I'm sure you do a lot of medical practitioners Every type. If their profit margins are slim or at least accountable, and the bank doesn't want to touch it because it's risky? What if he went out of business whatever? What would he or she maybe use for their medical practice? What kind of loan would they need?
Speaker 1:So if you're looking at buying equipment, so a lot of medical practices they need to stay. They need to stay current with the newest tools or the newest softwares and you're able to do that and be able to acquire the newest equipment financing program. So, god forbid, you can't pay your loan, they'll come and seize the equipment. So now it's collateralized by the actual equipment that you're financing. So the lenders are willing to go like five, 10 years on a monthly payment because it's less risky. If you default they can come and get the equipment. So the lenders are willing to go like five, 10 years on a monthly payment because it's less risky. If you default they can come and get the equipment. So it's not as risky of a loan for the lender. There is something backing it. But it's not your business and it's not your home.
Speaker 2:Oh, that's a really good example. So if you're getting a piece of equipment for your medical, private, whatever business that you need a piece of machinery that they could come and collect if you don't pay off the loan in a timely manner, what terms is the range that is normal or that is not scary? I know there's terms for loans, like my mortgage is a percentage range every month over 15, 30 years. What is a sort of normal range you look at?
Speaker 1:Typically within three to five years on any piece of equipment. It can be new or used as well. So if it is titled piece of equipment, like you're buying a tractor or a trailer, you can typically get a long term on something like that because it has a title and is verified that way. The ownership's verified that way. The ownership's verified that way. Any kind of equipment can qualify for equipment financing as long as it makes sense for your business. So a restaurant can't go and finance a bulldozer.
Speaker 2:What if they're building a new restaurant?
Speaker 1:There have been some exceptions.
Speaker 2:So maybe a higher loan.
Speaker 1:I've heard of crazier loans, but if you can make it work, We'll ask about those later. They want to lend it out. They just want to make sure that you're going to be using it for the business and there's going to be a return on the investment. That's what they're interested in. They're interested in getting paid back, but also giving the opportunity too.
Speaker 2:So I guess, what are the advantages of a small business owner coming to someone like you for a loan versus going to like big bank?
Speaker 1:It's a quick and easy process. So about a day or two and you could get something financed if you're purchasing equipment, or you could get capital infused into your bank account. Banks are going to take a couple of weeks. They're going to ask for collateral, they're going to ask for a lot of paperwork and at the end of the day, they're probably going to decline you unless you're putting up some collateral. So you know it is a loan, but it is kind of apples and oranges, because we are built to lend to small businesses. Banks are built to lend to everybody.
Speaker 2:How do you define if somebody, what benefit does it give if there's collateral and someone wants a piece of machinery for their medical practice or whatever, and then someone just needs cash to put where they need to in their company? How do you differential your sales calls on where to hone in, Like what is? What is the big differences?
Speaker 1:so one of the first questions that our live agents will ask you as a business owner is what are you doing with the money? And then we'll explain to them that we'll come back to them with the maximum funding size available and then they can take what they need for their business out of that amount. So say, I approve you for two hundred thousand dollars because you make two million dollars a year. Two hundred thousand dollars. And I say only take what you need because you want to put the capital to work as soon as you get it. If it sits in your account. If I give you a full 200, you only need 50 grand right now. The 150 is going to sit in your account and accrue interest for no reason. It's just sitting in your account doing nothing. You need to put it to work and you can always call me later and get the rest of that money. That's the thing.
Speaker 2:So you offer options and opportunities. Yeah, different levels.
Speaker 1:And every entrepreneur thinks it's going to work. That's why I love lending to small business owners is because they all think that their idea is going to work and, to some circumstance, it already has. They've created their reality and I like to feed that. I like to see it come to reality for them.
Speaker 2:You'd like to up their game? Yeah, okay, what kind of terms like long-term, short-term and then percentages ranges are you used to seeing?
Speaker 1:On the cash that's uncollateralized, that there's not a piece of equipment sitting in your yard that they can come seize if you default, god forbid, you default them alone, which doesn't happen a lot. But I'm just trying to really reinforce the idea of risk and how, if something has collateral behind it, they can go out longer terms On the stuff. That's just cash. We're seeing about 2.5% to 3% periodic rates per month. So say you borrow like $10,000, you pay back $10,300 if you pay it off at the so like per month. So say you borrow like 10 grand, you pay back 10,300 if you pay it off at the end of the month.
Speaker 2:But if you wait till the term is over.
Speaker 1:Yeah, if you go throughout the entire term, say like line of credit, that's like a 24 month loan or a 36 month line of credit you could end up paying 30, 40 cents on the dollar. But that comes out to about 2 cents per month and you can always pay it off early whenever you want. So the cost of money these days, with no collateral, it's a really good opportunity for small business owners.
Speaker 2:Of your clientele. I'm sure you've hit other clientele that have looked for lending elsewhere. How do you caution them or reward them for not taking predatory lender terms?
Speaker 1:them for not taking predatory lender terms.
Speaker 2:Yeah, yeah, so you want to work with an accredited business what's accredited.
Speaker 1:You want to look them up online. So you want to see if they're accredited through the BBB. You want to maybe get a referral, see if they have any kind of testimonials, things like that.
Speaker 2:Interesting A social aspect.
Speaker 1:Yeah, a trust pilot. Any of those kind of rating services are great to look at before you do anything.
Speaker 2:Okay, that's so awesome. We had a couple of companies looking to offer us investment money or something and we're like, well, you don't even have a LinkedIn. And we're like, okay, but I guess it does show something to someone that's putting up risk for you. You gotta check those boxes. Okay, if you're going for a capital funding loan, that's just the cash, right. Yeah, that's the money you're going to put towards building your business or growing ad spend working capital, and then the one that's with collateral. What's that called?
Speaker 1:Collateral, so maybe like an equipment financing deal.
Speaker 2:Oh so equipment financing.
Speaker 1:Yeah.
Speaker 2:Okay, equipment financing is your most I mean fun to talk about. But no-transcript.
Speaker 1:But after you talk to the same kind of industries over and over and over, like our reps, do you start to get a pretty keen eye on where you can buy equipment, the reasons why people are taking money out for equipment and we're able to custom tailor a financing solution better for them once we do understand that. So that's why our seasoned veterans, our seasoned veteran sales reps that work for us, really hone in on again, like you said, on the need of the business owner and make sure that we are delivering a product that is in line with their needs.
Speaker 2:What is a really fun example of what an equipment funding loan might look like, even if it's made up, could be fictitious, could be factual.
Speaker 1:Yeah, I have a couple in mind, but I'm yeah, so say you have a trucker and he's looking to get a reefer trailer so he can transport frozen goods. A reefer trailer would be a refrigerated trailer.
Speaker 2:You needed to clarify that one.
Speaker 1:Construction. You can say hey, are you guys looking at buying a yellow iron this quarter? And yellow iron would be a bulldozer or like a caterpillar, Not a golf club. That's weird. No, not a golf club, but say you wanted to buy a golf cart or golf cart the fleet of them for your golf club.
Speaker 2:we can do that. I see so when you're actually but okay. So if you're buying a fleet of golf carts, is it because you need new ones or you're just starting?
Speaker 1:Either way.
Speaker 2:Really.
Speaker 1:As long as it makes sense for your business, the actual what you're buying, the product, we'll do it.
Speaker 2:So if you're doing an application for a loan, what are some red flags that you look for as a lender?
Speaker 1:So we're looking at time in business. The longer time in business that you have, the better. We're also looking for you know we take a really deep dive into the cash flow of the business. So we ask you to send in three months of bank statements and we're going to look at that and we're going to scour through it and see if you have any negative days, any insufficient funds charges, any red flags that show that your cashflow might not be as strong as you think.
Speaker 2:But if you're just really irresponsible.
Speaker 1:They'll see that. They'll see that in your credit profile. They're going to look at your personal credit. They're not going to hold it against you. We do start at 500 FICO for the cash loans, for the working capital loans. But when you start to look at equipment financing because they are going to be in bed with you for three to five years, maybe 10 years, on these equipment loans, they're going to be a little more stingy about your credit being above 650.
Speaker 2:Oof 550. Okay, yeah, Cool. Why do you think banks don't look at equipment financing for $550?
Speaker 1:Well, your credit says something about you. It seems pretty much the same. All your revolving loans that you have, you're going to have a payment history on your credit report. So if you do ever look at your own credit report like ones that say a finance company like us would pull you'll see that it shows about 20 of your last payments that you've made for that revolving line on each revolving line that you have. And a revolving line would be a car payment, a mortgage, a credit card, all that stuff is all outlined there and they can see the history of you making your payments and on time. So somebody historically who acts this way has credit to suggest that they're going to act the same way in the future. So that's the point of credit and I think that it just again assesses the risk that is involved with these loans. It's not like the lenders aren't going to do business with you. You might just pay a little bit more if you're not as qualified. You might pay less if you are.
Speaker 2:How often do you have someone that gets financing from you and then doesn't pay it back?
Speaker 1:It doesn't happen very often because we really push that you should be taking the money if you have a need and we dive into that and make sure that the owner is very well versed on how the working capital works.
Speaker 1:And look, the lender is not going to lend more money than they think that a business owner can pay back in a low impact and manageable way. They want to be paid back. So they look at the cash flow. They say if I inserted our money into here and had you pay it back on a weekly payment or a monthly payment from here on out, would that help you or would that even put you under, even if you couldn't make that payment altogether? So even with the opportunity, you should feel more money coming into your business. But they look at it and go they can handle this loan in a way they will pay it back. Historically, their credit says or the cash flow says they can pay it back or they will. So it's all about risk and the lenders assess risk through their underwriting guidelines and we adhere to those and make sure that you know we're matching with the best lender possible.
Speaker 2:So I'll then give you the opposite question.
Speaker 1:Yeah.
Speaker 2:What are things when somebody fill out SNAP with you to get some funding for either equipment or capital funding, for cash that they need right away? What are things that are major green lights that you're excited about?
Speaker 1:Annual revenue. So the more annual revenue that you make, the more revenue that you make, the more you qualify for. So a lot of times people want to qualify for 200 grand and they only make $300,000. You couldn't pay back $200,000 within a year or two years or even three years. If you're making 200 grand a year, you can't In profit or revenue.
Speaker 1:In gross revenue. So you know there is something called the 10% rule. That is a general rule that we like to work off of. So say, your company is making 2.2 million. Typically we can get you about 220,000 as a loan that you could probably pay back in a year to three years on the capital side.
Speaker 2:What if someone took a great terms loan and that's, I know, very standard for you would they do it again?
Speaker 1:Yeah, we have repeat customers that we've been working with since 2014. They keep coming back. We're able to get them more money on top of the money that they have, or restructure their deal and give them longer terms, better costs. And the thing is that this is all in the name of building your business credit. So, just like your personal credit that you've been building since you're 16 and bought a car or your first credit card for 200 bucks, that was building your personal credit. A lot of business owners don't have their business credit built up, so when they want to take out a big, big loan or they don't want to put up their home or everything, they have to get the next opportunity. It's good to start with $20,000 loan payback, $45,000 loan payback, get $100,000 loan payback and a lot of our lenders will go from like 5% origination fee or it usually starts like three down to two, down to one, and it'll get like free for life origination fees on their loans too.
Speaker 2:so it is building towards something there is light at the end of the tunnel. So I would tell you, for internet marketers who do sales and consulting and other products, usually looking for investment money, and they end up giving away assets you know, shares of their company to get the investment money because they're just trying to grow it, and I would then suggest that they look for outside financing and not go to the big banks, who will reject them if they don't have the scenario that big banks are looking for. I understand that they're much more difficult with risk and I know you have a lot of repeat clients. If someone is brand brand new to trying to figure out do I need a loan? Do I need you know? Can I get funding? What's it for? Where would they send their questions and answers? Could they still maybe just call and ask?
Speaker 1:Absolutely. Our agents are live 24 seven. They're stationed in New York, texas, california, and you know they'll always pick up and they're always willing to talk to you and build a relationship. That we know because we know what it takes. We have to talk to the business owner about their need, about their dreams, about their next move.
Speaker 1:Business owners can't confide in too many people but we do make some pretty good relationships with these business owners because we do understand about opportunity and how it's kind of lonely at the top. So when you're able to talk about taking money out, it might be private. We don't want to take out money. It might be personal. You might want to just, you know, as a business owner, take it out and get that opportunity and move your business forward and not have anybody know about it. We keep it discreet, we keep it easy and you don't even have to be a full owner of your business to take these loans out. You can be like a 25% owner and still take a loan out and it just gives a lot of freedom to business owners. It gives a lot of freedom to anybody who's looking to really grab life by the horns.
Speaker 2:How many people do you think start businesses and end up taking some sort of loan or investment or giving away equity to get some extra funding? That don't take working capital loans no, I'm saying how many do you think need to? Whether they get. So they either go for investment funding, where then they give somebody a small percentage of their business, or they end up getting there.
Speaker 2:You're getting there, aren't you? Well, yes, honestly, the giving equity is a very powerful cash-free incentive for you to get funds for your company to grow it. However, if you do grow it, then it's worth more. Then you're going to owe more back than taking a loan that they can afford.
Speaker 1:Yeah, taking the cash out on the business is something that you need to do. You, taking the cash out on the business is something that you need to do. You need to build your business credit and I think it's a great option, before you start giving away equity, to bet on yourself and put it on the business. If you have the revenue to prove that you can qualify for the money, you should go ahead and take it out and start that journey.
Speaker 2:What do you mean? Betting on yourself?
Speaker 1:You're not reaching out for someone else's help. You're betting on your business. You're betting on your hard work, on yourself, and that will come back and pay you tenfold.
Speaker 2:Damn, what a great answer. I actually agree, like if you're going for a loan, you're going to maybe give equity away to investors, or you're going to get a loan with decent funding margins or better payback options, the big bank won't talk to you anyway. Why not go that route and bet on yourself as the entrepreneur versus getting into debt you can't handle. A lot of businesses are built on debt, and if this is a debt that most people have to pay back pretty good and you know they can qualify and you've done your research, then well done.
Speaker 1:Agreed.
Speaker 2:What else? What else do you have to suggest? Obviously, this podcast is for business owners. Entrepreneurs and a lot of us, at the end of the day, seek funding in some realm to start, continue, build or, you know, cover, you know the lights in the studio or whatever we need yeah, I think it starts with trust.
Speaker 1:You want to be able to talk to somebody who knows what they're talking about. Um, we've been doing it for 10 years at Business Funds Marketplace and then longer than that with all of our our sales reps and our consultants. But I just really want to stress that taking money is very common. It's not like it's not like you know. You're doing something that nobody's ever done before. I'd say like 90% of businesses have taken money from somebody or started it that way, maybe even more.
Speaker 1:I mean, if you think that everybody's just making it on their own cash flow and they're not, they're not using credits or get the credit system You're wrong.
Speaker 1:Me, everybody's on the credit card, everybody's on a mortgage, everybody's on the car loan, and playing the credit game is really important, and do not let the business credit game pass you by because you are not educated on it or you think that that's too expensive to borrow money. What is the cost of money to you? Would lend out a hundred thousand dollars, get paid back 105 in five years? You wouldn't. So the cost of money is something that you need to understand that sometimes it costs money to make money and you're you're never going to be able to just make enough cash flow without using somebody else or you delegating responsibilities or using cashflow to as like a multiplier for your, your progress. So you know you don't want to thwart that from your own capacity and your own ability to raise funds for yourself. You want to be able to tap into more money, tapped into your credit, and use that to propel forward.
Speaker 2:Well, honestly, I've been raised on the cash flow positive. You can't borrow money on something you don't have, so might as well not. But then as I got older and a little more experienced in business, I'm like, hey, if you can borrow money, let's say you're going to make 20 a month in returns and you want to just go that next step up. What if you just took 10 returns and then that extra 10 went towards paying that extra money you just got, because you've got a company that's worth growing, or you believe in yourself or you're growing something. Amazing, weird question. There are a lot of lending companies. How do you know what to look for? What to look for won't make them come back for another loan. You want the reoccurring client and you want them to reoccurringly pay it off and be happy and keep on building step by step. So what are other practices that lenders do that are maybe not beneficial or maybe something that another client should be aware of when they're looking for a loan?
Speaker 1:I would encourage you to make sure that you're getting the product that best aligns with your need.
Speaker 2:What do you mean? The product?
Speaker 1:So working capital, just straight cash, non-collateralized loans. It's going to be more aggressive on the payback. Get the payback faster. On the term length it might cost you more money because it's just straight cash when you tie it to a piece of equipment, so you're doing equipment financing. You can stretch it out for three to five years, the payments, that is so, and they're monthly payments, so it's easier on your cashflow. But really, if you're looking for something in between getting a line of credit which are available in today's market now too to just get cash and take the money truly when you only need it. So now, instead of taking a bunch of money up front and having to commit that money right away to your entire project, you can take out little spurts of it as the project moves forward and some industries they work better with something like that.
Speaker 2:Oh, you offer a line of credit.
Speaker 1:Yeah, so you can buy inventory, flip it, pay it off early. You don't only end up paying like five, six cents on the dollar, nine cents on the dollar. So you know, if you only borrow for three months and you flip the inventory and you're able to put that profit into your next buy, then you're really getting somewhere. And that's what I mean about multiplying your cash flow and having it work for you that way.
Speaker 2:So what if they go to another lender? That are different types of maybe predatory loans. What do they look for on the app process or the conversation that is concerning yeah, they're going to be limited.
Speaker 1:They're probably going to try to push you into a loan that seems very aggressive under nine months, under 12 months that's always a red flag. Look out for something like that that's being paid back aggressively. Read the contract when it's sent to you. They can't give you money if you don't sign the contract. High five, fred. There's a lot of addendums. There's a lot of things that you can be looking for, and one of those things is an early prepay payment schedule.
Speaker 2:Really, I thought it was the opposite.
Speaker 1:Yeah, you want to have that in there, sounds good. Yeah, you want to have that in there, sounds good. Yeah, you want to have that in there. They can just say, hey, we have no prepayment penalties, we'll show it. Where is it stated on the contract? This is in the handshake agreement. So you're going to want to see an actual schedule and a lot of times, if they don't have them in there, it's going to in there as like an exhibit A, an addendum.
Speaker 2:So what do you do if your reps are selling a loan, If there's those kinds of arrangements like pre-early payoff? Do you instruct them to make sure to note in the calls all those details?
Speaker 1:Yes, we notate all that kind of stuff and we really look for lenders. Look, we have a whole marketplace of lenders that can provide funding to you. We might get 15, 20 approvals when it comes our way, but we're going to present to you the best terms, the best cost, and a lot of times it's the terms of the deal, not just the term length and the cost of the note. A lot of times it's going to be can you pay it off early? Is there a prepay schedule? Is there a portal where you can log in by yourself and just take out money from line of credit and not have to call my agent to get out money? That all exists. So you know good, always advise to make it an easy process for you, but also an educated process for you that's so interesting for me.
Speaker 2:I know in business it's always been um, you know, don't go get funding, don't go into debt, like silicon valley companies always do, because then you're growing company that's just got debt, you're paying back the debt forever, kind of like the US economy buy our trillions to fix the roads but you don't take tax dollars to fix the roads, that kind of thing. I think it's interesting that you run an actual ethical company to loan where it's responsible and giving back to the person that's taking the loan and making sure that they are accepting the loan responsibly. Is there anything that your reps look for that it's like absolutely no veto black, we're not touching that client.
Speaker 1:Oh, yeah, sure. So if someone one thing to look out for is someone is, of course we pull a credit and we do like a small background check we make sure there's nothing big red flags like that, like criminal history or anything like that. But you know we're looking for any kind of like you know, misrepresented bank statements or application, any marks like that that come back to us and then if they're, like you know, leaving the country soon or they're mentioning that they're going to be selling their business soon, Vegas is a red flag.
Speaker 1:Yeah, yeah, we're gonna take this all and put it on red. That's the need. Um, we're probably gonna try to skip on that person all right.
Speaker 2:What are some major green flags? Like this person would benefit amazingly, get great terms, and we're happy to help them. What are good green flags?
Speaker 1:they understand it takes money to make money always and they're down Like they have a big opportunity and they're ready to go and we can really we can deliver what we promised quickly. Those are the best deals.
Speaker 2:That was very vague. What do you mean? Ready to go?
Speaker 1:I'm going to buy some inventory $200,000. I'm going to sell it for a million dollars. It's going to take me two months. Oh, you cost 50 grand and borrow that money. I just made $850,000 from that opportunity. I want to do it.
Speaker 2:What would be a good example of that?
Speaker 1:I'd say like an inventory purchase during the holidays or something like that. Say, you have like a flower company that wants to buy a bunch of inventory and they know they're going to make 50% of their money that month for the whole year. Black Friday, yeah, exactly. So they want to do like a big inventory purchase and flip it and they want to do a quick prepay once they get all that payment in so they can pay all their vendors, take the profit and leave.
Speaker 2:I know that's been some of your best clients. They're pretty funny to hear about.
Speaker 1:Yeah, it's really fun to see like them, you know, turn money into more money using our fuel. I like it.
Speaker 2:Do you have any really interesting stories about someone that needed equipment financing? That was very unique and kind of fun to do.
Speaker 1:Oh, shoot yeah off the top of my head.
Speaker 2:Okay, let me think For Kartra. We always use the pony dressage, teaching how to run the horse in a circle and how to train the pony, and it's our biggest example of how you can use Kartra to film your videos and then teach dressage if you're a dressage teacher and I actually saw can use Kartra to film your videos and then teach dressage if you're a dressage teacher, and I actually saw one on Kartra and I was like wow, our example came true. But I know some of your examples are pretty funny.
Speaker 1:Yeah, I've done anything from car washes the whole unit, the whole car washing unit, to doing like carnival rides and things like that, because it was a traveling carnival company. I mean, as long as the equipment makes sense for the business, we can do it. So you do run into a lot of fun stuff.
Speaker 2:I mean we run into software for restaurants, POS systems, lasers for medical Most of it I thought would be POS systems for somebody taking their business from the brick and mortar to online. Now you need to take credit cards without typing it in, or cash.
Speaker 1:Right, you're going to find the 30 grand.
Speaker 2:That's where I thought most of the business loans would come from. Is somebody trying to update their system from the brick and mortar to more standard?
Speaker 1:Yeah, and doing that through a POS system or software is the same as a trucker upgrading their trailer system or adding to their fleet.
Speaker 2:How do you feel about donuts?
Speaker 1:Love them. Yeah, I like the custard filled ones.
Speaker 2:Because no one needs a donut machine.
Speaker 1:They do actually. Oh do they, they do Restaurant equipment all day.
Speaker 2:Who needs?
Speaker 1:a donut machine. The cops Donut maker.
Speaker 2:That's my favorite lending story of yours Is actually lend it to someone that is owns a donut shop that's open at three in the morning and they're busting their butts making donuts for everybody under the sun probably mostly cops yeah, long beach.
Speaker 1:Wow, you know you can get a donut and a purple optimo really late at night but you've done the funding for that yes, everybody across the nation, any kind of industry. As long as it makes sense for the business and you have revenue and you've been in business for over about a year or two, you can get funding.
Speaker 2:So let's make that our favorite new little example Like I say, pony dressage, like I don't even know what that means, necessarily. But let's say someone that owns a four in the morning open donut shop and their donut machine breaks. Yeah, walk me through it.
Speaker 1:Go to the vendor of your choice. What's a vendor of your choice? A vendor, so say the donut machine maker. So whoever's actually making that donut machine? Like the vendor, say they live in New York and you're in Cali.
Speaker 2:How many vendor donut machines are there?
Speaker 1:There's probably a lot of vendors that make donut machines, a lot of manufacturers out there, so you buy it straight from the manufacturer, new, or it can be used and you can buy from a private party, like the donut say that you put the donuts out of business that were down the street because your donuts were so good, you could buy their Based on the machine, they own that equipment. Based on the machine, they own that equipment. You could buy from them through a private party purchase and equipment finance.
Speaker 2:There's a whole nother level to lending. I didn't even know about takeout the competition. Yeah, they have one donut machine, let's get two.
Speaker 1:You can buy theirs, you can buy new or used. So pretty much what you do is you get an invoice from your vendor.
Speaker 2:Don't tell me that I have five kids. We're going to get a donut machine in the house.
Speaker 1:You can go online and just do a screenshot of the machine that you want with the price of it and you just send that in for your quote. It's a digital application we send out to you on your phone. You just fill out your digital application, you send us a quote and we get you approved by the next day and pay the vendor. You can go get your donut machine.
Speaker 2:Yeah, okay, great, I would love a donut machine.
