Brian Ofsie discusses how businesses can get extra working capital
Brian Ofsie, senior vice president at Delancey Street, discusses strategies on how business owners can get working capital when they need it. Brian has funded 10’s of millions, and has been lending for over 20 years.
My name is Brian Ofsie, and i’m a Senior Vice President at Delancey Street. In my role as Senior Vice President, I problem solve and find solutions. Clients turn to me with scenarios, and I find them the the best solution based on their assets and scenario.
At Delancey Street, we understand that every business has unique needs, and no two businesses are alike. Whether it’s surviving a bad month, or being nimble and jumping on an opportunity – you need access to working capital.
Below are some common scenarios at Delancey Street we often see.
Winter is slow, and you need access to working capital in order to make payroll, and keep the business float.
This is a very common scenario, especially due to the fact this winter was slow. In situations like this, business owners have multiple methods of getting extra funds.
- Invoice Factoring: Get an advance on your existing invoices, and get the full amount funded.
- Business Cash Advance: Get an advance on your future receivables as one lump sum. This is expensive, unsecured money, but can be used to to get money in literally 24 hours. Use this funding situationally.
- Get a Line of Credit: Depending on your credit score, or if you have collateral, this is relatively cheap. If you have good credit, and solid financials, you can get a personally guaranteed line of credit. This is something you can get through your local bank.
- Get a real estate collateralized line of credit: If you have bad credit, but real estate you own – then it’s possible to get a line of credit at 12-18% APR secured by the real estate. This process can take 2-3 weeks on average to complete.
You have an urgent need, and need funding in 24-48 hours. For example, you need to make payroll, and cannot wait 1-2 weeks to go through a formal qualification process and for the funds to arrive
- Business Cash Advance: In situations like this, you’ll need a merchant cash advance/business cash advance. This type of money is “expensive,” because it’s unsecured and comes with far fewer qualifications than other secured forms of working capital. Typically, all you need to do is fill out an application and submit 3 months of bank statements.
You need to purchase equipment and need financing.
- Business Cash Advance: If you have poor credit, and can’t turn to other forms of funding, you can use a business cash advance to purchase the equipment. This is “expensive,” money but it can be used to purchase the equipment.
- Term Loan: If you have good credit, no derogatory remarks on your credit history, and have good finances – then you can use a term loan. Most term loans can be anywhere from 1-3 years. Typically, they will have an APR of 15-20% per year, which is much lower than the APR cash advances charge.
- Line of credit: If you have “time,” on your side – and good credit, it’s possible to get a line of credit which can then be used to purchase the equipment. Typically, the line of credit will need to be repaid fast.