by Bold Growth Solutions | Sep 29, 2021 | Blog
When it comes to taking on debt to advance your business, sometimes it’s best to have a slice of each world, which, in the realm of business finance, means splitting your baskets into debt and equity. This is the function of a mezzanine loan; it helps out businesses that may be unable to secure from a loan the total amount needed to fund a project or company advancement.
Mezzanine Loans: The Details
This type of loan is squarely in the class of creative financing, since there are all types of possibilities and breakdowns – depending on the lending company, and the needs of your business. If you can’t secure a traditional to cover the total cost of something, then this form of creative financing exists to accept some equity in exchange for the money you need. You should expect to pay higher rates of interest for virtually any type of mezzanine loan that you receive – however, this is buttressed a bit by the more flexible terms of repayment.
Main Use of a Mezzanine Loan
The primary utility of this type of loan services companies that have a record of success. By this time, perhaps most of your working capital is already tied up in business-related ventures, but you see an opportunity to make an acquisition that could propel you to the top of your industry. It is for this that the mezzanine loan can swoop in to save the day. As you can expect, the interest rate will be higher than the average loan. You will often also have the option of capitalizing these interest payments so as to keep a higher cash flow for business purposes presently.
You should know that in the event of a default on the mezzanine loan, they are regarded as being lower priority than other types of equity and loan instruments. This means that they are among the last loans to be liquidated in the event of default – which is bad for you if you’re the lender, or if you acquired the business that defaulted.
Contact Bold Growth Solutions today to learn more about mezzanine loans.
by Bold Growth Solutions | Sep 22, 2021 | Blog
Once your business is established, the number one issue that SMBs have is the lack of growth capital; this is the reason for the existence of so many credit unions and community banks – as well as other lending institutions, of course. To help you get that often very necessary infusion of new cash, we’ve compiled a short selection of the best options for securing growth capital.
Invest Your Own Hard Cash
Although this is one of the most difficult ways to obtain growth capital, it’s also one of the best – you don’t have to worry about loans and interest payments, and time isn’t as much of a hindrance as with the latter options. Most businesses have to use this option at least a little bit, since you can rarely obtain loans for everything.
Consider Venture Capital
If cash is hard to come by, and you have a promising idea and proof-of-concept ready-made, then a venture capital firm might be your best bet for acquiring growth capital. The beauty in this arrangement is also the potential downside: you get their investment in exchange for equity. That means no interest payments; but it also means you are now part-owner of your business.
Borrowing Hard Cash as an Option
It is for this that banks, credit unions and lending companies exist: the added benefit is that they have no vested interest in how you use the funds (which means control is totally yours), just in your ability to pay back. If you need a few months to raise your credit score, it’s advisable to take it – you will get better interest rates on loans in the long run. The drawback to loans, of course, is how burdensome they can become if profits decline or are slow to activate.
Help From Above? Angel Investors
Although a bit tongue-in-cheek, the angel investor really is an exceptional option in this spate of options for acquiring growth capital. These are wealthy persons who take a direct interest in your business and provide both capital, as well as contact and suppliers that would be difficult to get with otherwise. Like venture capital firms, they usually want equity, of course.
by Bold Growth Solutions | Sep 15, 2021 | Blog
In most cases, when a homeowner is planning to move, they must rely on the money they are getting from the sale of their current home in order to purchase the new one. However, closing dates don’t always work out right and you find yourself in a difficult balancing act with your finances.
This is where bridge loans come in handy- you can purchase your new home without having to wait for your current home to sell. Unfortunately, there are some drawbacks to this type of loan that “bridges” the gap. In this article, we’ll look at how they work and he advantages versus disadvantages of this type of financing.
What are Bridge Loans?
This is a short-term loan used in real estate transactions when a buyer doesn’t have the money they need to purchase a new property before the first property sells. Typically, you can borrow up to 80% of the combined value of the first and second property. Of course, different lenders have their own standards.
Advantages vs. Disadvantages of Bridge Loans
As with other loan products, these loans have advantages and disadvantages for the borrower. It’s necessary to consider all of these before making your decision.
Advantages
Faster financing
Flexibility in purchasing
No contingencies in your offer
Less hassle
Disadvantages
More expensive
Higher interest rates
High 0rigination fees
Equity required
Sound finances
Responsibility for the loan even if first property doesn’t sell
While bridge loans may seem like an attractive option when you’ve found a home that you want to purchase but your current home hasn’t sold, you must consider the advantages and disadvantages very carefully. There are some other options that you might want to consider instead. Call Bold Growth Solutions for help in deciding if a bridge loan is the best route for you to take or if another option is right for you.
by Bold Growth Solutions | Sep 9, 2021 | Blog
Running a business in the modern age means knowing how to take your advertising efforts to digital fronts. If you’re not taking advantage of what online advertising has to offer, you’re missing out on a huge area of possibility for your business. Thankfully, it is never too late to get started. If you’re looking to put together a marketing strategy that incorporates a variety of modern ad techniques, you can easily accomplish this with a few moves. Take a moment to consider these ideas and get your own wheels turning for what you can do.
Start Small
Jumping into the fray without any preliminary work is an easy way to waste your budget and make some decisions in haste. The best way to get yourself going is by starting small. Instead of planning a huge launch for a new marketing campaign online, play around with a few safe ideas. If your website is in need of some major updates, put in the work to have it designed to meet current trends. By focusing on what is possible to achieve right away, it makes it easier for you to get a feel for all your future options.
Control Your Budget
There are many ways to sell your services on the internet. For some, online advertising is all about location. Putting an ad on the right site can attract a ton of potential customers to your landing pages. Since you don’t always know which sites will yield the best results, PPC advertising can be a lifesaver. With pay-per-click ads, you pay only when a visitor clicks your ad. This means you don’t need to worry about renting space on a site where you never see any results. Save money and see bigger returns on your investment.
Use Social Options
Social media channels can also prove useful when you’re putting together a strategy for marketing on the internet. These days, sites like Facebook and Instagram are shifting to offer businesses more options for interacting with consumers. In fact, you can now sell your goods and services through these social sites in a way that was unheard of just a few years back. While it shouldn’t be your primary mode of selling, incorporating the right ads into your social experience can definitely start to get people curious about your brand.
When it comes to online advertising, there are a ton of options to consider. Give yourself a chance to learn more about all of the different ways to promote your brand and find what fits your goals.
by Bold Growth Solutions | Sep 8, 2021 | Blog
Even when you have the skills necessary to complete a project, not having the money to do so can ruin your chances of winning the contract. In most cases, you’ll be paid after all work is completed or at preset milestones throughout the project. Therefore, you’ll need to front some of your own money to get started. If you don’t have the money, you might want to consider looking into contract financing.
How Does it Work?
While a portion of the process starts before you start the project, such as proving to the customer that you will be able to complete the project, the funding doesn’t occur until after the contract is awarded. Of course, the lender will need to see financial statements, reference letters, a company profile, and bank statements in order to determine if you have the credibility to handle the contract.
How is Contract Financing Dispensed?
Once your company has the contract, it’s time to receive the funds and get started. In order to determine how much to provide, the lender will need to analyze the contract. The way the funds are dispensed depend upon your company profile and will be one of the following three ways:
Purchase order financing
Your company controls the money
You watch over the money
Terms of Contract Financing
Once the structure is determined, you’ll need to think about the fees that will be charged by the lender. There are four terms of contract lending you should know:
Advance amount is the total amount
Factor fee similar to interest rate
Advance percentage is the amount requested from the customer to pay the invoice
Advance term is the amount of time payment is withheld after invoice received
Where to Get Contract Financing
Typically, banks do not get involved with contract financing because it’s not really a loan. The funding is often provided by private companies that deal with factoring and can be found online. You’ll just need to complete your application and wait for them to call you. If you do receive contract financing, you’ll want to carefully review the terms to know what you’re getting yourself into. Call Bold Growth Solutions today to help you with your contract financing needs.
