Why would your small business need funding?

A Loan is an Investment

Benefit > Cost

Maximum Amount You Should Borrow

Cash Flow

÷

1.5 Debt Payment >

• Purchase inventory (to take advantage of a discount) • Marketing with a known expectation of result

• Equipment that generates revenue

• Cover gap in time before you’re paid by clients • Expand to a new location

•  Paying off another loan of equal or less interest rate

•  Paying yourself a salary

•  Decorative improvements

•  Paying overdue bills •  Buying something you don’t need at a discount

Good Uses Bad Uses

What is Considered a Good Investment?

Pros: Lowest Interest Rates Cons: Difficult to Secure Lengthy Applications Longer Waiting Times

Bank Loan FAQS 1.  How do I know if I am a good candidate for a bank loan? 2.  Where do I find a bank loan? 3.  What is the application process like?

Bank Loans: The Lowest-Priced Option

14m unserved small

businesses

27m small

businesses

12m seek funding

5m need funding but don’t ask

3m got funding from

banks

Sources: SBA Small Business Lending in the United States 2012 July 2013

Federal Reserve Bank of New York Small Business Credit Survey May 2013

Small Businesses Aren’t Getting the Capital They

Need from Banks

Why Are Banks Loans So Hard To Get?

Government Restrictions because loans are made with 0ur money 1

Not Profitable to underwrite and service small loans 2

Pros: Fastest time to funding Shorter applications Diverse products Options for those with bad credit

Cons: Higher fees Difficult to “know where to go”

Alternative Lending is Booming

Different Types of Financial Products Available to Small Businesses

15 – 30%!

SBA Loans Lowest-priced alternative loan Longest term, monthly payments

Term Loans Shorter terms available Daily, weekly and monthly options

Invoice Financing Invoices serve as collateral Paid off when invoice is paid

MCAs Good for bad credit Paid off through daily credit card statements

Equipment Loans Equipment serves as collateral Monthly for determined life of asset

Lines of Credit Lower interest rates than credit cards Only pay interest on what you use

6 – 10%!

7 – 30%!

3% + % / week!

7 – 25%!

1.14 – 1.48!

Fees Loan Products Unique Value Proposition Repayment?

•  If you have a friend or peer who has received a non-bank loan, ask them about their experience

•  Marketplaces like Fundera make the shopping experience

easy •  With one application, you can see all of your available loan

options and apply to your favorite lenders

Where Do I Find Alternative Loans?

Questions? Meredith Wood: meredith@fundera.com

@Fundera @Mere_Wood www.fundera.com