Small Business Borrowing Amid Fed Rate Hikes

The Federal Reserve, aka The Fed, is the main governing body over the United States economy. Currently headed by Jerome Powell, the Fed’s main job is to control the supply of money in the economy through various policies, along with accomplishing primary objectives like controlling inflation and maximizing employment. Perhaps its most powerful tool in influencing the economy is its ability to manipulate the Federal Funds Rate, which impacts everything from yields earned on savings accounts to credit card interest and beyond. The FFR also influences the interest charged to both individuals and companies when borrowing funds.

The Fed raises the FFR with the goal of increasing short-term interest rates, and vice versa when lowering the benchmark. During the Covid-19 pandemic, when the economy abruptly came to a halt for several weeks, triggering all sorts of repercussions that are still being felt, the Fed lowered the FFR to 0% in an attempt to soften the blow by increasing the likelihood that lenders would be repaid while borrowing would still be feasible for those seeking funds.

Implications of the Fed Rate Hike

Since that move was made, thanks in part to the fallout from Covid-19 as well as lingering supply chain jams and the war in Ukraine, inflation has picked up at an alarming pace. In an effort to tame inflation, the Fed has made it clear that the next step is to begin raising the FFR rate in a series of hikes over the coming months. The plan the Fed has outlined would represent one of the most aggressive raises on record and has sent shockwaves through the stock market since it was made public. After all, a higher FFR means companies both public and private will face more challenges related to growing their bottom lines, while the other aforementioned issues are still impeding gross sales.

While a higher FFR affects those seeking funds through traditional banks, MobyCap has secured resources that will dramatically lower the cost of capital for all clients funded through our in-house bank. Our commitment to securing the most beneficial funding options for our clients never stops, and in the face of challenging macro-economic conditions, we feel it is even more necessary. What’s more, these enhanced options won’t slow down our streamlined process at all, as we can still present offers within hours of underwriting and offer funding within 24 hours in many cases. Along with these lower rates, MobyCap continues to add innovative, customizable options which enable us to help a wider array of small businesses.

Because there is no hard credit pull or obligation needed to underwrite, you have nothing to lose and much to gain if your business could benefit from an influx of working capital as we head into the summer months. After all, even if you don’t plan on borrowing funds in the immediate future, it never hurts to know what options are available should the need arise. The last few years have shown us just how unpredictable the economy can be, and that significant swings can occur even when the Fed announces correctional measures.

Don’t hesitate to call (737) 577-1180 or submit your information through our Contact Us page to explore your options with one of our experts. You can also simply Apply Now, if you’d like to expedite the process. Thank you, we look forward to the opportunity to work with you as we continue our mission to support as many small business owners as possible!

How to Combat Small Business Seasonality

Most small business owners start out down a similar path: they gain experience in their chosen field, develop their own expertise, formulate a plan for how to improve things, and finally branch off to start their own company. While some are fortunate enough to hit the ground running, with pre-existing clients in tow, many are focused on drumming up new business for the first months – or even years – of their new ventures. This often requires copious amounts of spending on startup costs, marketing and staffing, to name a few. Once a merchant overcomes these large initial challenges, the next one can rear its ugly head… seasonality.

Seasonality describes the increase and/or decline in demand for a product or service, based on the time of year. Several key factors can contribute to seasonality, including weather, consumer behavior patterns, travel, and more. Some examples of seasonal businesses include vacation and travel entities, lawn care, retail (especially those with a sports and recreation focus), tax services and education services, among many others. These seasonal companies experience fluctuations in resources that are two-fold: they often require available capital to keep up with the surge in demand during the busy seasons, and funds to cover operational costs during the slow times. A lack of funding during the former can lead to missed opportunities while lacking resources during the latter can have more dire consequences. Either way, it can be extremely beneficial for small business owners to know what options are available to them if a need for quick funding arises.

Small Business Loans for Seasonal Companies

Many seasonal businesses are not candidates for traditional bank financing if they are light on assets, have low or insufficient credit or simply can’t wait weeks or months to receive the funds they need to take advantage of their opportunities. MobyCap is considered the premier specialty finance option for small business owners seeking funding to make the most of seasonality. We’ve successfully deployed over $1 billion and counting to merchants in similar situations over the last decade and continue to refine our offerings while streamlining our approach to make it easier than ever for small business owners to acquire funding tailored to their exact needs. Unlike other private lenders, we offer a full suite of options including term loans, revenue advances and lines of credit. We typically underwrite for all possible options before presenting the best approvals and moving quickly through the closing process.

This streamlined approach requires minimal documentation to start underwriting and can yield approvals within hours of receiving the items we need to start. Moreover, we assign a team of specialists to every deal in order to gain a deeper understanding of our clients’ current needs and future aspirations, which allows us to truly customize offers suited to their exact needs. This also inspires us to focus on speed and ease, as we know business owners would rather focus on running their operations, rather than tracking down the resources needed to do so.

There is no hard credit pull or personal guarantee necessary to underwrite, so you have nothing to lose and much to gain by calling in to discuss your options with our funding experts. Don’t hesitate to submit your information through our Contact Us page, or call (737) 577-1180 to get started. Thank you, we look forward to working with you and are confident we can be a valuable asset to your business.

How Small Businesses Can Weather the Inflation Storm

Inflation is defined as the general increase in prices and the fall in the purchasing value of money. As you can imagine, this cause-effect relationship can have a wide-ranging impact on small business owners. This can include rising costs for inventory/materials, the subsequent raising of one’s own prices to keep up, and a potential loss of business to competitors as a result. This is just a simple example, as there are countless other ripple effects involved for business in different industries. Moreover, in times of high inflation, small business owners sometimes scramble for new sources of materials and/or overhaul their systems, which can incur large up-front costs. Any combination of these events can severely impact small business owners’ bottom lines in the short and long term.

For the 12 months that ended in February 2022, the inflation calculator reflected a four-decade high of 7.9%. There are many contributing factors to this dramatic rise, including repercussions of the Covid-19 pandemic, global supply chain issues, and the Russia-Ukraine conflict, which is exacerbating things by impacting energy prices. For many small business owners who were looking forward to a big summer after emerging from the shadows of the pandemic, this has thrown a wrench into their plans. The government is actively taking measures to combat inflation, so hopefully, this is more of a temporary setback, but small business owners still must navigate through this challenging landscape. The looming threat of a recession adds more fuel to the fire but is something that can be overcome on an individual level through proper planning and opportunistic decision-making.

Combat Inflation With Flexible Funding

In the past, bank financing was the only viable option for small business owners in need of capital to take advantage of growth opportunities, cope with changes in the business environment and/or bridge the gap when receivables lag for any reason. However, big banks are often quite rigid with their underwriting processes and often turn away merchants who are light on assets, have thin or subpar credit, or simply haven’t been in business long enough. Traditional financing also takes weeks or months to complete, which can feel like an eternity for small businesses. After all, a key advantage of smaller organizations is their ability to quickly adapt to a changing environment. If one is unable to secure the resources necessary to do so, dire consequences can ensue.

It is for all these reasons and more that MobyCap has carved out a niche in the alternative finance space while funding over $1 billion and counting to small business owners over the last decade. We specialize in granting our clients quick access to the capital they need to accelerate their business goals. We’re constantly streamlining our process and can complete deals within one business day because we know the impact a quick influx of working capital can have on a business’ growth trajectory. We strive to exceed expectations at every step of the process and truly feel we can help anyone who walks through our doors, with our full suite of funding options ranging from $50k to $5M. Unlike most others in the unsecured funding space, we strive to gain a deep understanding of all our clients so we can create fruitful, long-lasting partnerships.

If you’re interested in exploring your options, don’t hesitate to call (737) 577-1180 or simply click HERE to fill out our secure one-page application. We look forward to working with you and are confident we can be an asset to you and your business!

How The Fallout of the Ukraine Conflict Will Impact Small Businesses

For weeks now, Russia has waged a war in Ukraine that has resulted in harsh economic sanctions handed down from many of the most powerful countries in the world. While these sanctions could significantly impact on Russia’s ability to prolong the conflict, they will also have global repercussions given its status as one of the largest players in the energy sector. The timing of all this is especially unfortunate considering the world economy was showing signs of emerging from a two-year period marred by the Covid-19 pandemic and supply chain jams. Now that the United States has pledged to stop importing Russian energy, gas prices have quickly risen, throwing another wrench into the plans of small and medium-sized business owners.

Given the multitude of obstacles impeding the recovery, virtually every industry could be impacted either directly or indirectly. Some unforeseen opportunities could arise for businesses in industries like logistics, manufacturing, and even oil & gas. While such businesses will surely be pleasantly surprised by the influx of additional opportunities, they will also need the resources with which to take them on. In this case, a customized funding solution from a private lender can be extremely valuable. Whether these projects require a quick influx of capital that can be paid back over a short period of time, stretched out over a longer term, or via a personalized payment schedule, all are things MobyCap can accommodate. Because we can provide up to $5M in small business funding, complete deals within one business day of receiving documents and offer a wide array of options, we’re confident we can help virtually any business that meets our minimal requirements.

Conversely, many others could be hindered in the short term, including those that rely heavily on inventory and uninterrupted cash flow. In these instances, MobyCap offers multiple funding options designed to help our clients bridge the gap when business is slow or accounts receivable lag. Like the other solutions we offer, these “bridge funding” options are rather customizable based on the unique needs of each of our clients. As a hedge against uncertainty, we often approve deals for a longer-term while also including discounts for an early payoff, in case business picks up, receivables arrive, or new opportunities present themselves in the near term. Such options are unheard of at traditional banks and are just one of the reasons we’ve won over thousands of clients who see the value in working with a private lender who will go to great lengths to help their businesses thrive in the good times and protect themselves against unforeseen setbacks.

Because we don’t need many documents to underwrite and don’t require any sort of personal guarantee or hard credit pull, you have nothing to lose and everything to gain if your business could benefit from exploring their working capital options. Don’t hesitate to call (737) 577-1180 or submit your information through the Contact Us page to connect with a funding specialist. You can also simply Apply Now if you’re ready to get started.

Grow Your Business the Same Way ESPN Did

If you asked 100 small business owners what the number one thing was they wish they had more of, the answer the vast majority of the time would be working capital. Defined as Current Assets – Current Liabilities, a robust supply working capital can be an indication of a healthy business poised for growth opportunities. Conversely, small businesses lacking these assets often spin their wheels to stay afloat and miss out on potentially lucrative opportunities to thrive. This can further jeopardize the blood, sweat and tears required to build a business from the ground up. After all, expansion – and the inability to acquire the resources with which to expand – is the top obstacle small businesses face.

For small businesses that lack the assets, time in existence or credit score to qualify for bank financing, there are other options available. Most notably, private specialty lenders exist for the exact reason of helping hard-working small business owners get over the hump and get to the next level. While specialty lending is sometimes scrutinized for higher interest rates and shorter terms than traditional bank funding, this short-term inconvenience pales in comparison to the opportunity to create a profitable business in the long term.

One astounding example of how revenue advances – a core offering of many specialty lenders – can propel a business to immeasurable success, is sports media giant ESPN. In 1979, ESPN Co-Founder Bill Rasmussen and his partners were in the midst of negotiations with the NCAA, cable networks and satellite providers. Once they reached agreements for broadcast rights and the associated logistics, there was a glaring immediate need for capital. Mr. Rasmussen took out a $9,000 revenue advance to facilitate these partnerships and the rest is history. Now, fast forward four decades and ESPN has grown into one of the most recognizable brands in the world.

All this is not to say that everyone who utilizes specialty funding will achieve this type of success, but it goes to show that the sky is the limit if entrepreneurs have a great plan and the resources necessary to execute it. As the premier private lender in the specialty funding space, MobyCap has helped small business owners – and even publicly traded companies – in virtually every industry acquire the funds they need to expand. We’ve already deployed over $1 billion in working capital over the last decade-plus and continue to innovate in the space so we can create even more long-term partnerships.

We can complete our fast, easy funding process in a matter of hours or days, rather than the weeks or months required to complete a bank loan. Since we don’t require any collateral or personal guarantee and require minimal documentation to underwrite, there is much to gain with virtually no downside to exploring your options. Don’t hesitate to call (737) 577-1180 or Contact Us at your earliest convenience if interested in doing so. Moreover, you can simply Apply Now if you’re ready to move forward ASAP.

How Small Businesses Can Thrive During the Pandemic

It’s no secret that Covid-19 has presented small business owners with perhaps the toughest challenge imaginable. Just when it seemed we were in the clear, the Omicron variant began to spread like wildfire, causing a new wave of shutdowns in some states. While growing a healthy business is tough enough, months of economic shutdown followed by inconsistent sales forced many small business owners to close their doors… some for good. On the other hand, small businesses in some industries found themselves much busier than before, with an influx in opportunities related to the pandemic. While this sounds like a blessing, sudden, rapid growth is actually one of the main challenges small business owners face and can cause havoc if they aren’t armed with the resources to take proper advantage.

The scenarios mentioned above outline how important it is for virtually every merchant to explore all options available to them, including specialty finance. Also known as alternative finance, specialty finance refers to private lenders who can supply small businesses with quick, robust sums of working capital they can use to navigate through difficult times or excel during busy periods. MobyCap has established itself as the premier private lender in the space, with numerous customer service awards from Lending Tree and an average deal size roughly four times the industry average. We’ve managed to achieve this status by offering several key advantages that traditional lending institutions like big banks cannot offer. These include:

  • Speed – We have closed thousands of deals within mere hours or days, while traditional banks often take weeks or even months to generate approvals. We understand the urgency many of our clients feel when searching for funding and strive to move extremely quickly while exceeding expectations every step of the way.
  • Amounts up to $5M – Thanks to our superior resources (we are backed by a $100M line with Silicon Valley Bank), experience, and industry connections, we stand head and shoulders above other private lenders in terms of our ability to fund large sums. While we can help businesses of all sizes secure funding, we’ve become the premier option for transactions of $100k and above and fund multi-million-dollar deals with regularity.
  • Customer service – While many traditional banks plug numbers into an algorithm, provide a loan estimate and move on, we dedicate an entire team to each customer from the time we first make contact until funding and even afterward when our clients are ready to take on more working capital.
  • Uncollateralized funding – While no two banks use the exact same underwriting parameters, they have one thing in common: they virtually all require assets as collateralization to offer approvals. Many small businesses, especially those with asset-light business models, are simply unable to meet these requirements and are thus turned away by their bank.
  • Customized Options – Perhaps the greatest advantage we offer is the ability to create truly customized deals around our clients’ needs. Because we are a direct funder and strive to create long-lasting relationships with each of our customers, we often design payment schedules that maximize the customer’s chances of using our money to enhance their business without putting it in any sort of financial jeopardy. Moreover, unlike many of our competitors, we also regularly urge customers not to move forward with deals if it isn’t in the best interest of their short and long-term success — even if they’ve already been approved.

The ongoing pandemic continues to present new challenges, making it paramount for merchants to understand all their options if a need for working capital arises. When you factor in the current global supply-chain issues, small businesses are arguably facing more challenges now than they did throughout much of 2020. Whether merchants want or need to utilize bridge funding to secure inventory, expansion, payroll, staffing or any other reason, cultivating a relationship with a premier private lender offers no downside.

We don’t run hard credit pulls or require any sort of personal guarantee to underwrite, so there’s nothing to lose and much to gain if your business could benefit from an influx of working capital. If you’re interested in speaking to a funding specialist about your options, don’t hesitate to Apply Now or call (737) 577-1180. Thank you, we look forward to working with you and are confident we can be an asset to your business.

When Will Small Business Crypto Loans Become Mainstream?

One of the most talked-about topics in the world of finance at the moment is cryptocurrency. While major players like Bitcoin and Ethereum remain the most popular tokens, virtually every day another coin is gaining in popularity, receiving backing from a major institution, or being posted about by a celebrity with millions of online followers. This constant limelight is exacerbated by a 24/7 trading cycle and has led to wild swings in the market, creating overnight millionaires in some cases and destroying vast amounts of wealth in others. So many aspects of the cryptocurrency revolution are different from the norms we’ve come to expect from the stock market and have delayed adoption by large factions of “old school” investors. For many who are interested in cryptocurrency there is still a great deal of unknown, but one thing that has become clear is that blockchain technology could become a mainstay in many essential industries and even revolutionize them.

Evolution of Small Business Crypto Loans

As more retail investors and business owners have accumulated sizable amounts of cryptocurrency, lenders have started offering crypto loans using tokens as collateral for fiat currency. Binance, the largest current crypto exchange, offers its users loans in which one crypto can act as collateral for another. However, an obvious obstacle in both instances is the aforementioned volatility in the market, which can change the value of said collateral dramatically in a short period of time. This will undoubtedly lead to changes in the parameters crypto loan lenders use to generate approvals over time.

Logically, the next step in this emerging market would be the actual lending of cryptocurrency assets for business purposes. After all, many tokens are already backed by some of the most cutting-edge companies in the world, like Tesla, as well as some of the oldest banks in the United States, including BNY Mellon. The largest obstacle in this instance is the current ecosystem, which is quite limited in terms of how merchants could actually exchange cryptocurrency for goods and services. And again, the volatility in the marketplace would also require some creativity on the lender’s part when creating stipulations for the contracts. Despite these challenges, the space is gaining adoption quickly and will soon infiltrate virtually many areas of finance in some form or fashion. When this happens, those with an eye on the future – especially in the private lending industry – will stay abreast of the ongoing changes and embrace any new viable options.

As a leader in the alternative finance space, the MobyCap team prides itself on its ability to truly customize funding solutions to fit each of our clients’ unique needs. A large component of our approach centers around our comprehensive suite of funding options, which we are constantly evaluating. While we plan to continue on with our core products for the foreseeable future, we are constantly reviewing all possible options that could allow us to help small business owners get to the next level.

Don’t hesitate to visit our Solutions page for information on our funding options or email info@mobycap.com to discuss your working capital options.

5 Ways to Make the Most of the Holiday Season With Private Lending

The holiday season is typically the busiest time of year for many industries, including e-commerce, logistics, and staffing, to name a few.  2021 is looking up, as the year winds down despite businesses facing temporary closure of operations that led to significant losses during the pandemic in 2020. According to PR Newswire, Deloitte forecasts that holiday retail sales will reach between $1.28 trillion and $1.3 trillion from November 2021 through to January 2022. This trend will continue through the first quarter of 2022 and beyond.

With so many opportunities to generate significant additional revenue, many small and medium-sized business owners have turned to private lending for an immediate boost of capital to propel them through the end of the year and into 2022.

This is due to several factors, including the speed with which private lenders can move, the minimal amount of documentation required, and the ability to truly customize deals, including early payoff incentives that can cut the cost of capital down dramatically for businesses that only need the capital through the holiday season and can pay off the debt shortly thereafter. Some of the best use cases for these merchants include:

Inventory

With an all but guaranteed surge in sales upcoming and supply chain issues looming, it is imperative to take advantage of any opportunity to purchase materials in bulk and/or at a discount. When such opportunities arise quickly, it is crucial to have a relationship with a private lender that can quickly supply you with a truly customized deal designed to maximize your ROI by saving you money on the cost of funds.

Every business varies in operational needs such as inventory reorder levels, shipping processes and costs, and vendor pricing. All these can be factored in when determining the type of funding and the required amount to meet market demand. Inventory financing, among other alternative funding sources, is a great option to ensure a business stays afloat during this holiday. This type of financing ensures the business owner never runs out of inventory and avoids seasonal bottlenecks.

MobyCap not only routinely funds customers within 24 hours but can also include early payoff incentives that dramatically lower the cost of capital if customers can pay off the balance early. The ideal use case in this scenario would be taking the money, purchasing inventory at a discount, selling it quickly, and immediately paying off the remaining balance for the lowest possible rate.

Marketing

Assuming business owners already have what they need to provide goods and services to customers, another crucial component of the sales cycle — especially during times when you know consumers are shopping — is the ability to market to the ideal audiences. Whether online or via social media, print, radio, or snail mail, the holiday period is far and away the best time to generate marketing ROI for many businesses.

It’s safe to assume that, with the economy slowly gaining traction, other businesses are looking forward to this holiday season to achieve high sales. In addition, retailers can take advantage of events such as Black Friday where shoppers are looking for great deals. In anticipation of making profits, businesses may need funds to stock up and cover logistical costs. This period being a largely digital era means a business has to invest heavily in a digital marketing plan that promotes satisfactory customer service and brand positioning. This is the time to work on increasing customer acquisition and creating targeted ads which can be costly for small businesses. The global annual spending on digital ads in 2021 is expected to reach $389 billion.

Capital, among other factors, plays a big role in a business positioning itself in anticipation of the influx of shoppers this holiday. Quickly acquiring the funds, deploying them as marketing spend, generating an influx of business, and paying off the remaining debt would be an ideal way to utilize private funding in this scenario.

Bridge Funding

Because the holidays are typically hectic from a day-to-day perspective, cash flow shortages can be extremely detrimental to normal operations. For merchants dealing with lapses in cash flow due to slow-paying customers, temporary drops in revenue, or other common reasons, short-term funding can sometimes be the difference between shutting the doors for good and continuing business as usual.

While rates can vary depending on the circumstances, this is often a small price to pay for a rentable partner who can help you navigate through good times and bad. Moreover, the early payoff incentives would minimize the cost of capital if things returned to normal sooner rather than later.

In this case, having a relationship with a lender like MobyCap implies that emergency funds are only a phone call away. The business owner also does not have to worry about rigid rates as we offer flexible terms so they can borrow comfortably without stalling cash flow. If anything, the holiday season should be a period for a business to rebound from any slow periods it may have experienced previously throughout the year.

Augmenting Staff

As business picks up and growth accelerates, many businesses find themselves making temporary or permanent additions to their staff during the holiday season. Private lending will provide much-needed funds to offset any labor issues and shipping delays that have disrupted the supply chain since the onset of the pandemic. According to Aaron Cheris, head of Bain’s America Practice, the key challenge retailers will face this holiday season is the tight labor market. This means that firms operating in the supply chain industry will struggle to ensure speedy and efficient delivery of goods to shoppers while ensuring they do not run out of stock fast.

With private lending at hand, it gives the business owner more leverage to meet the customer demands for goods as their warehouse will be replenished with materials sooner rather than later. They will also have competent and enough staff to meet customer orders on time and anticipate any delivery mishaps. With many vacancies to fill, having funds available will enable businesses to offer monetary incentives to attract employees. Take, for example, Amazon is planning to hire 150,000 seasonal employees to cover the holiday shopping activities. The large retailer is also intending to offer a $3,000 sign-on bonus and an additional $3 per hour for specific shifts. If doing so can help generate immediate returns while keeping up with demand and keeping customers happy during the end-of-year rush, the interest paid on the funding necessary to acquire labor is well worth it.

In all this, the business will effectively tackle labor shortages which will ease supply chain operations in the next financial year. In addition, since the business would have the flexibility to hire temporary staff, it could save significantly on staff costs such as insurance and retirement plans. Moreover, we can offer multiple customizable options that allow us to structure the most beneficial deal for merchants under these circumstances.

Adding New Equipment

As the holiday season gears up, small and medium-sized businesses should take advantage of private lending to increase their operational capacities. To capture a portion of the sales revenue anticipated from November, a business owner may need to add more equipment to increase production. Private lending offers the option of accessing equipment leasing, which allows business owners to avoid the huge upfront costs of acquiring equipment.

This can be a great benefit for a small business that needs to be able to produce and supply constant orders.

We have helped businesses secure equipment to optimize their production capacity. Regardless of the industry a business operates in, we can help the founder acquire equipment to ensure they don’t miss out on the much-awaited sales boom this holiday.

Conclusion

As businesses approach the holiday season, it’s important to prepare to meet the expected customers’ demands and take advantage of the litany of sales opportunities. For an increasing number of small business owners, this means starting a relationship with a private lender that is willing to take the extra step to ensure they have a truly customized funding solution. The top pain points that businesses in the supply chain have faced are labor and inventory shortages, which have been devastating. In addition, it avoids making rash decisions such as reducing manufacturing costs or increasing prices as funds are available to fill any gaps. Private lending provides a level playing ground for small and medium-sized businesses to organize themselves to effectively capture additional market share. Even when the holiday season passes, having a trusted private lender close allows for stable running of the operations throughout the life of the business.

MobyCap has consistently proven itself to be capable of helping businesses achieve their potential. This holiday season is no different as markets are expected to be busy with customer purchases both online and in physical stores. We have the funding solutions for whatever needs a business has, such as inventory and staff shortages. You do not have to deal with a lengthy application and approval process when you require immediate cash to refill your shelves. Get in touch with us today.

Advantages of a Virtual Line of Credit vs. Revolving Line of Credit

It’s normal for every business to constantly face a shortfall in capital. To avoid any capital crisis that could threaten the survival of the business, it’s necessary to have access to cash on hand. A revolving line of credit and a virtual line both serve the purpose of acting as flexible sources of financing. However, the virtual line of credit takes the cake in terms of more flexibility, affordability, and reliability. 

Read on to find out more about the pros and cons of a revolving line and how it compares against the virtual line. 

Pros of a Revolving Line 

  1.  Ready Funds: A revolving line of credit avails an approved or a specified amount of funds available if and when the need arises for any reasons. The business can easily pay for bills, replenish inventory, and add to its working capital. 
  2.  Predictable Rates and Payback Terms: After the customer has been approved for a revolving line of credit, they will usually pay interest monthly on the credit balance owed. The rates applied are generally variable and depend on the client’s credit history and the lender. 
  3.  Repeated Use: Since it’s revolving debt, funds replenish as you pay off your balances. Borrowing after the first time doesn’t require being approved again. 

Cons of a Revolving Line 

  1.  Inflexible Capital Amounts: A business is limited to the same approval amount for the long term after signing contracts. This can lead to trouble in case the business’ capital needs exceed the credit limit. In addition, a revolving credit limit significantly impacts the user’s credit utilization rate which in turn affects the credit score
  2.  Inflexible Rates: A lender also limits a business to the same rates for the long term after signing contracts. These rates also tend to be higher than traditional loans due to the convenience and flexibility of the credit line. 
  3.  Slow Approval Process: It can take weeks or months to be approved for credit as lenders want to be sure a customer isn’t a credit risk. With bad credit, it gets tougher to receive approval. 
  4.  Detailed Documentation: A lender often requires dozens of documents for approval. This is to confirm the credit history of the customer to check if they can reliably pay the balance before being advanced to another credit amount. There are also additional steps to take before applying for a credit line. 

What a Virtual Line of Credit Offers 

A virtual line of credit is similar to a revolving line in some key areas and quite different in others. Similar to a true revolver, a virtual line affords merchants a specified pool of funds that are available to them if and when the need arises. The recipient simply specifies how much they are interested in withdrawing, meeting an agreed-upon minimum withdrawal, and usually receives the funds within 24 hours of signing off on the transaction. 

Unlike a revolving line, however, the virtual line product allows customers to negotiate more favorable funding amounts, rates, and terms once they’ve exhausted the initial amount and have a satisfactory payment history. This allows customers to build internal credit with the lender while also helping their overall business credit and lowering their cost of capital to boot. 

Another attractive feature of the virtual line is the ease with which merchants can apply and receive approvals. While traditional banks and other lending institutions sometimes take weeks or months to approve businesses for revolving lines of credit while requiring dozens of documents, a virtual line can be secured within 48 hours and often requires nothing more than an application, a few months of business bank statements and some basic business financial statements. For business owners who value speed, efficiency, and convenience, a virtual line of credit can be the optimal working capital solution. 

Get a Virtual Line of Credit to Meet Your Business’ Financing Needs 

A virtual line of credit compared to a revolving credit line offers more value for a business that often faces urgent cash flow issues. Within a business day of signing contracts, funds are deposited in the  business bank account, enabling the decision-makers to cover routine costs and focus on running the business, rather than securing resources. A virtual line is everything that a revolving line of credit is not; it does not charge an arm and leg for convenience and flexibility. 

If your business could benefit from a line of credit or any other alternative financing solutions — or you would simply like to explore your options — don’t hesitate to submit your info through the Contact Us page or email info@mobycap.com. Our team of funding specialists will be more than happy to help you go over all your options.

Private Lending: An Effective Solution for Dealing With Supply Chain Jams

The repercussions of Covid-19 have had a huge impact on the availability of materials, transportation, and labor spanning across virtually every industry. According to a survey by Ernst & Young LLP (EY US), 97% of participants who included industrial products companies and automotive industries admitted that the pandemic brought negative impacts with 47% of all firms having their labor force disrupted. 

This has also had a profound slowdown in business opportunities and receivables for many different types of businesses. It is no secret that the pandemic has had a sweeping effect across all industries and countries with closed borders and airspace and national lockdowns. 

In 2020, the world experienced one of the largest declines in global trade by 8.9% since the global financial crisis. This means countries could also not access essential goods such as pharmaceuticals from China, which is the major global source of pharmaceutical ingredients, which in turn limited India’s access to raw materials for generic drugs.

The majority of companies, including small and medium-sized companies, have had to face the negative effects of supply and demand. Construction companies can’t complete work due to lack of materials, logistics companies have slowed down until materials become available, and staffing companies are dealing with a slow return of workers to jobs. As a whole, the pandemic placed major constraints on regional and international supply chain businesses. 

As a result, these companies are struggling and often need a financial bridge to keep up with payroll, inventory, bills, and production, to name but a few. Admittedly, small and medium-sized businesses are much more likely to be impacted by the negative effects of the pandemic than larger companies. 

As companies are working to get back to the norm, they are facing a challenge in accessing funds to restock their materials, rehire and retrain their staff, and revamp their business strategies. However, this gives space for private lending, which offers a great opportunity and hope for businesses that can’t access bank loans. This has led to an influx of private lenders which allows business owners access to multiple funding options depending on their needs.

This would be an opportune time to work with MobyCap as we have assisted many businesses in different industries to access much-needed capital to smoothly run their supply chain operations. 

Why Seek Private Lending With MobyCap 

1. We Give Priority to Our Customers’ Needs and Goals

Private lenders like MobyCap look at the historical performance of the business and understand short-term slowdowns related to these types of issues. This acts as a guide to identifying the right type of funding with favorable rates and terms. We understand any downturn in business can seriously affect credit scores. Our business funding options are popular among customers because they can still have access even with bad credit. In addition, consistent payments will help rebuild a bad credit score. 

If a merchant needs to raise funds within a couple of days to scale up production or add to their staff, we make it a priority to secure the funds they need on their timeline. This would be an impossibility for a bank as it would demand security. We aim to ensure there is no shortfall in capital as our customers carry out day-to-day business operations. 

2. We Care About Building a Relationship With Our Customers 

We also work closely with each of our customers to gain a deep understanding of their businesses and aspirations for the future as well as how they are coping with current challenges, rather than simply plugging numbers into an algorithm and spitting out an offer or a decline. 

It is important to have a relationship with a lender from the get-go, which is what we aim for. Qualities such as transparency, flexibility, competitive rates, and a good reputation are what to look for in a good private lender. 

We will not just offer to fund the business, but we will examine any gap in our client’s supply chain operations. If, for instance, they are facing a production shortage, we will help them devise a plan on how to improve, such as purchasing equipment, so they can ultimately meet customer demands. We value keeping trust given the unpredictability of the current economy. 

3. We Provide Quick and Easy Access to Funding 

We require minimal documents and can have tangible offers for our customers within a couple of hours of receiving the necessary paperwork. We understand that time is of the essence. That is why we have an easy application process so that more businesses can access loans. This is unlike traditional bank loans, which tend to have a complicated application and approval process which easily locks out small businesses. 

With our funding options, such as merchant cash advance and invoice factoring, clients do not need to submit collateral. We also offer a business line of credit where once the customer is qualified they can apply in the future without going through another approval process. This can be useful in case an unexpected business emergency arises. 

4. We Provide an Adequate Lending Limit 

We can also fund same-day loans up to $250k and amounts up to $5 million within 72 hours because we know our customers need to focus on navigating through these supply chain challenges. We want our customers to keep working on their short-term and long-term recovery plans. The current pandemic caused significant supply and demand shocks, leading to many businesses closing shop. 

With our generous same-day funding offer, our clients can access a sufficient amount to cover needs such as logistics, cash flow, hire of extra labor, and inventory.  Even better, it does not give too much priority to credit scores and does not place limiting restrictions. Our customers also do not have to worry about unexpected fees and hidden charges, allowing them to focus on building their businesses. 

5. We Offer Tailor-Made Business Funding 

We customize solutions to our customers’ unique needs and can even modify their payments until business ramps up, which most of our competitors cannot do. Customized business funding offers great benefits for any business seeking funding. This is especially valuable to small and medium-sized companies as they operate on a different blueprint from larger organizations. In addition, many of these businesses might overlook the risks of some business funding further adding to their operational risks.

Our funding experts are qualified and experienced to sit down and help customers figure out which specific funding will solve their problems. In case a customer settles on merchant cash advance, they will benefit from the flexible repayment schedule, which is especially beneficial for seasonal businesses. In addition, our customers will not be tied down to fixed high interest rates which could affect their cash flow. 

6. We Reward Our Customers With Attractive Offers 

We can also offer aggressive early payoff incentives that reward our customers for paying off their balances early, rather than penalizing them as some traditional lenders would do. This can be a great boost to any business working on recovering or improving its supply chain operations. It eliminates worrying about any default in payments that could put great risk on the assets and interrupt the cash flow. 

Bottom Line 

It may take some time before companies and industries all over the world overcome the disruptions in the supply chain. While some companies will likely recover quickly, not all businesses are equal. It would pay for governments and industries to always prepare by coming up with a solid recovery plan as the economy can be uncertain. 

However, this is expected to be capital intensive in terms of strengthening the production and distribution channels, investing in technology, and better logistics. One of the recommendations is that governments need to perform stress testing supply chains to help easily rise from any unexpected changes.

Even as the global supply chain continues to find its way back, funding is also a critical concern. With funding, businesses can rebuild their operations to their original or improved capacity. Private lending offers a beneficial alternative, especially for small and medium-sized businesses.

With the current economy, all kinds of lenders are clamoring for the attention of businesses, more so small and medium-sized entities. Banks are no longer the next stop as they tend to shy away from small businesses. It is best to conduct due diligence to ensure the business chooses the right lender. At the end of the day, every business wants to be able to refinance their loans and protect their autonomy.

MobyCap has a proven track record of success as revealed by our satisfied customers. We have worked with many businesses operating in different industries, each one with unique challenges and needs. We want our customers to always view us as a reliable and trustworthy partner when they face any challenges in their businesses. We offer straightforward terms and rates with our varied funding options. Please feel free to contact us today to get started.

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