Coastal Payment Systems Small Business Lending
Stating the obvious, we are in historic times. Quite challenging. The country (the world for that matter) is still a relative mess. While things are coming back and I am quite bullish about the future, there has undoubtedly been a lot of economic carnage.
Our partnerships enable us, in addition to offering unsecured business loans, to expand our secured lending. This includes those that lend specifically against accounts receivable, real estate, purchase orders, inventory, contract rights, etc... We are also placing PPE and cannabis deals (not easy in this environment).
While we all wait to see what the next “federal stimulus bill” will (and will not) include, there is little doubt that many business owners continue to struggle. Some need more money to rebuild their businesses; others need a way to cut expenses; and others need to find new sources of capital to help them pay their mortgages and put food on their tables. Although we are making progress, there is little doubt that the small business community is still in a somewhat precarious and fragile state. Many are dealing with cash flow issues. The economic and emotional pain/damage from this pandemic has run far and deep and adds more financial challenges to many small businesses. Towards this end, I want to highlight examples of different programs we have been using to help businesses address their needs/issues. Product A: True Consolidation Loan This product is designed for those businesses with “short term” loans that eat up too much of their daily/weekly cash flow. Unlike most, this lender will PAY OFF existing lenders and there is no minimum amount of money the business needs to “net.” Importantly, the ability to get future financing will NOT BE HURT. The lender(s) will refinance the current balances into a single ten (10) year term loan with one monthly payment. Many of our customers are reducing their current payments by almost 80% per month as evidenced by the chart below. Loan Balance Estimated Monthly Payments New Monthly Payments Savings $10,000 $1,666 $332 80% $25,000 $4,166 $830 80% $50,000 $8,333 $1,660 80% $75,000 $12,499 $2,491 80% $100,000 $16,666 $3,321 80%
Product B: Five Year/Low Cost Term Loan/AR Facility
Industry: Food distribution
Monthly Revenues: $700,000
Amount Offered: $1.4 million
14% per annum
Below are examples of a few offers obtained for clients recently. Loan A Industry: PPE goods Monthly revenues: $10 million Product: Medical grade gloves Amount offered: Up to $20 million Term: Two-year revolving line of credit Collateral: Inventory/AR Details: Finance company will provide both purchase order and accounts receivable financing. A great one stop shop for the customer. Loan B Industry: Food distribution Monthly revenues: $500,000 Amount offered: $5 million Product: Term loan type product (payments based on % of revenues) Term: 2 years Price: 2.5% per month Collateral: Blanket first position lien Details: Money will allow the company to defer raising more equity and defer dilution. Loan C Industry: Trucking Monthly revenues: $600,000 Product: Term loan Term: 5-year amortization with a balloon payment due at month 36 Collateral: Blanket first position lien Details: Company is using proceeds to refinance one-year convertible notes from hedge funds. Our lenders are expansive and sensible deals will be funded. If any of your clients or associates need capital, our lenders are funding.