1. Learn about the small business credit landscape 2. Hear a lending expert's tips on ways to access capital 3. Get your questions answered

1. Credit Crunch: Small Business
Lending
June 28, 2012

2. Today’s Speakers
• Ami Kassar
– CEO and Founder, Multifunding LLC
• Ben Geyerhahn
– Special Projects Director, Small Business Majority

3. About Small Business Majority
• Small business advocacy organization – founded
and run by small business owners
• National – offices in California, Washington, DC,
New York, Ohio, Colorado, and Missouri
• Research and advocacy on issues of top
importance to small businesses (<100
employees) and the self-employed
• Very focused on healthcare over the past 6 years
– becoming more involved in energy and access
to credit

4. MULTIFUNDING
Understanding Debt Alternatives in
Today’s Economy
June 29, 2012

5. WHO IS MULTIFUNDING ?
• Helping Small Business Owners Figure Out The Best
Possible Loans For Their Unique Situations
• Reuters calls us
– “Loan Doctors for Business”
• Twi%er
calls
us
– “The People’s Loan Broker”

6. EXAMPLE CLIENTS (funding completed)

7. MULTIFUNDING IN THE PRESS

8. GEOGRAPHICALLY DIVERSE

9. WHAT’S OUT THERE?
• Regular
Bank
Loans
• Asset
Based
Lenders
• SBA
/
USDA
Loans
• Equipment
Leasing
• A/R
Financing
• Sale
Lease
Back
Loans
• Purchase
Order
Financing
• Merchant
Cash
Advance
• Inventory
Financing
Loans

10. TYPES OF LOAN PROGRAMS
Source : MultiFunding Quarterly Lending Survey

11. ANNUAL INTEREST RATES BEING CHARGED
Source : MultiFunding Quarterly Lending Survey

12. LENDER’S VALUATIONS
Discounted
(%)
LTV
(%)
Business
Assets
Real
Estate
25
75
Equipment
50
50
Receivables
20
80
Inventory
50
50
Personal
Assets
Real
Estate
20
80
Stock
30
70
Cash
5
95

13. THE FOUR QUESTIONS
• Collateral
– Do
you
have
something
a
bank
can
liquidate?
The
easier
to
liquidate,
the
cheaper
your
rate.
• Cash
Flow
– How
was
business
last
year;
this
year?
• Credit
Score
– 680
or
above
(for
best
terms)
• Cost
of
Funds
– What
interest
rate
you
can
get?
– What
can
you
afford?

14. GOOD OLD FASHIONED BANK LOANS
• Bank
loans
today
require
profitability,
cash
flow,
good
credit,
and
good
collateral.
• If
you
think
you
have
all
of
these
ingredients,
try
a
local
community
bank
first.
• Visit
www.bankinggrades.com
to
find
a
bank
in
your
neighborhood
that
is
ac^vely
lending
to
small
business.

15. SBA and USDA LOANS
• Many
banks
will
be
a
bit
more
lenient
when
lending
through
the
SBA
and
USDA
programs.
The
government
offers
them
insurance
to
be
more
aggressive
when
lending
to
small
business.
• The
USDA
program
works
well
in
rural
communi^es
and
the
SBA
program
is
na^onwide.
• When
considering
these
programs,
always
look
for
a
lender
who
is
aggressive
and
has
a
lot
of
experience.
• If
one
lender
says
no,
always
try
another
one.

16. SBA EXAMPLE ONE
• Glass
contractor
in
Oregon
approached
us
to
consolidate
debts,
term
out
payables,
and
gain
access
to
working
capital.
• We
managed
to
refinance
their
debts
into
an
18
year
term
SBA
loan,
secured
by
real
estate.
• Interest
rates
went
down
from
18
%
to
6
%
and
client
will
save
$100,000
of
finance
charges
per
year.

17. SBA EXAMPLE TWO
• Fire
Restora^on
company
in
Tennessee
approached
us
to
gain
access
to
working
capital.
• Through
an
SBA
loan
(secured
by
her
home)
we
achieved
her
goal
and
refinanced
several
equipment
leases
and
credit
cards.
• Clients
monthly
finance
fees
reduced
by
$3,000
a
month.

18. IF THE BANKS AND SBA LENDERS SAY NO
• Don’t
despair,
there
are
plenty
of
alterna^ves
to
consider.
• The
key
issue
is
what
collateral
you
have
to
offer
the
lender.

19. ACCOUNTS RECEIVABLE FINANCING
• If
you
have
completed
work
for
other
businesses,
have
invoiced
them
and
are
wai^ng
to
be
paid
for
it,
these
invoices
are
collateral.
• Many
lenders
will
advance
you
money
against
the
invoices
so
that
you
can
get
paid
faster
and
improve
your
cash
flow.
• Key
issues
that
they
will
consider
are
the
quality
of
your
contract
with
your
client,
and
the
quality
of
the
client.
• They
are
underwri^ng
your
client
first,
and
your
business
second.

20. A/R FINANCING EXAMPLS
• We
were
approached
by
a
logis^cs
company
in
Pennsylvania
who
was
struggling
with
cash
flow
issues.
• This
company
had
an
exis^ng
line
of
credit
with
their
local
bank.
• We
put
them
on
the
Receivables
Exchange
and
they
were
able
to
keep
their
line
of
credit
and
trade
their
receivables.

21. PURCHASE ORDER FINANCING
• Some^mes
a
company
doesn’t
have
receivables
yet,
but
has
a
purchase
order
from
a
credible
business.
• A
loan
is
needed
to
advance
money
to
their
suppliers
to
they
can
fulfill
the
order.
• Purchase
order
financing
op^ons
are
available
where
the
lender
will
advance
money
to
the
supplier.
• These
loans
are
not
cheap
but
can
make
sense
in
high
margin
situa^ons.

22. INVENTORY FINANCING
• There
are
lenders
who
will
finance
your
inventory.
• Some
will
finance
your
inventory
purchases.
• Others
will
provide
an
ongoing
line
of
credit
against
your
inventory.

23. INVENTORY PURCHASE LOAN
• A
ligh^ng
distributor
in
Colorado
approached
us
and
needed
to
buy
inventory
quickly
to
meet
an
order.
• Their
supplier
was
not
willing
to
extend
terms.
• Our
lender
cuts
the
check
to
the
supplier,
adds
a
fifeen
percent
fees,
and
then
debited
the
money
from
the
client
over
90
days
in
equal
payments.
• It’s
expensive
money
but
can
be
done
in
a
week
and
makes
sense
if
no
other
alterna^ves
and
there
is
good
profit
in
a
job.

24. ASSET BASED LENDERS
• Some^mes
companies
have
accounts
receivable,
inventory,
and
equipment
on
their
balance
sheets.
• There
are
Asset
Based
Lenders
who
will
lend
against
all
of
these
categories.
• They
can
make
sense
vs.
going
to
an
individual
A/R
,
Inventory,
or
Equipment
Lender.

25. EQUIPMENT LEASING
• If
you’re
in
the
market
for
a
new
piece
of
equipment
or
sofware,
leasing
is
an
ac^ve
and
viable
op^on.
• There
are
many
tax
advantages
to
leasing.
• Always
consider
a
$1
buy
back
at
the
end
of
the
term
vs.
a
residual
equipment
value.

26. EQUIPMENT SALES LEASE BACK
• Some^mes
the
only
collateral
a
company
has
is
equipment
that
they
own
that
is
free
and
clear.
• In
some
cases
it
is
possible
to
sell
this
equipment
to
the
leasing
company,
who
will
then
lease
it
back
to
you.
• The
lender
will
want
to
see
and
understand
what
you
intend
to
use
the
funds
for.

27. EQUIPMENT SALES LEASE BACK EXAMPLE
• A
car
wash
in
Dallas
reached
out
to
us
and
needed
cash
quickly
to
pay
off
a
creditor.
• His
only
collateral
available
was
his
equipment.
• We
managed
to
find
a
lender
to
buy
his
equipment
from
him
at
50%
of
liquida^on
value,
and
sell
it
back
to
him
for
$1
at
end
of
term.
• Interest
rate
was
14
%
per
annum.

28. MERCHANT CASH ADVANCE LOANS
• Unfortunately,
many
companies
today
have
no
collateral
that
a
lender
is
interested
in.
• If
the
company
takes
credit
cards,
there
are
lenders
who
will
advance
them
money
today
and
take
a
future
daily
percentage
of
their
credit
card
receipts
un^l
their
principle
and
fees
are
paid
back.
• Other
lenders
will
do
the
same
in
the
form
of
a
term
loan
from
a
checking
account.
• Pay
a%en^on
to
the
term
of
the
loan
when
considering
these
op^ons.

29. WHAT IS AN ANNUAL DEBT REVIEW ?
• An
opportunity
to
sit
down
with
a
client
on
an
annual
review
and
determine
if
their
current
loans
s^ll
make
sense.
• Look
for
savings
opportuni^es
– Loan
Markets
Change
– Business
Condi^ons
Change

30. MANY OPPORTUNITES TO WORK TOGETHER
Ami
Kassar
Chief
Execu^ve
Officer
www.mul^funding.com
akassar@mul^funding.com
1-­‐800-­‐276-­‐0690
x
11

31. Join Our Network
Contact
• Erica Dowell, Network Coordinator
• Email: edowell@smallbusinessmajority.org
• Direct: (202) 535-3244
Ways to Get Involved:
Connect with us! • Receive a monthly newsletter
• Share your story for media requests
@SmlBizMajority
• Letters to the editor/Op-eds
Small Business Majority • State events/Roundtables
• Fly-ins
• Webinars for business organizations