It is absolutely still possible for businesses to raise additional capital in today’s economic environment, just as long as they are working with a skilled mortgage broker who knows what he is doing, explains Centerpointe Capital Corp. President Scott Polimeni. In Palm Desert, Calif., Polimeni regularly helps raise business capital for all types of companies in the surrounding areas.
He explains that his company hosts a very powerful inventory of mission-specific loan products that are designed to help business owners with cash flow needs. Among the most popular of these loan products are unsecured or stated income business lines of credit, equipment financing, factoring loans, SBA products, and merchant service advances. Each of these types of loans serves a very distinct purpose within the business community.
Without financing, America’s businesses cannot continue to grow and the economy as a whole will continue to suffer, Polimeni explains. That is why being able to raise business capital, in Palm Desert and elsewhere, is so vital to the nation’s economic growth. Equally important is that business owners are able to find a large pool of wholesale lenders to borrow from, and it is a mortgage company’s job to help clients find those lenders who are willing to lend money in particular.
Polimeni goes on to explain that there are numerous reasons why Palm Desert business owners need to raise capital. Although most people think that only the owners of start-ups need things like lines of credit, that is not the case at all. With that being said, traditionally it is more difficult to obtain a business line of credit for a start-up company that has been in business for less than two years than it is for a company with a longer track record. Although most people think that SBA loans are for beginning companies only, that is not the case, according to Polimeni.
At Centerpointe Capital, there is no one-size-fits all commercial loan. In fact, it is quite the contrary according to Polimeni. “We customize, and there are some very mission-specific loan products out there,” he says. Some of the most mission-specific loan products available are factoring loans. If that is not the best source of money, than a company may find more success with a line of credit.
Lines of credit are by and large the most practical tool for business owners because the money they have taken out will sit in an account ready to be spent, but the business owners do not have to pay a balance on it until the money is actually used. A great example of when this would be beneficial to a business owner is if a manufacturer were to find an excellent deal for a bulk amount of product but could not afford to pay for it right away. Rather than let that great deal pass him by, a line of credit would allow the manufacturer to purchase the bulk product while it’s on sale. He would then need to pay back the money that he spent on the bulk product to the lender over time, instead of in one immediate payment. “You don’t have to pay anything towards it while it sits there, but you have these monies that are on standby at the scratch of a check; so you have liquid capital on standby,” Polimeni says.
Executives in Palm Desert may also need business capital to make ends meet while awaiting payment from a vendor or a major client as well. Polimeni uses the example of a business that sells pens and papers to a major client that does not pay for the product as quickly as it was supposed to. Rather than going belly up while he waits to receive a $100,000 payment for the recent transaction, a business owner could instead simply dip into his business line of credit immediately.
Using a line of credit in these instances would require the executive to concede to giving the lender a cut of the money, since he will owe the lender an amount higher than what he borrowed. However, that small amount of extra payment is usually worth it to receive real money in real time without going bankrupt while waiting for a client to pay up.
