An entrepreneur operates a wireless pre-paid card distribution business in New York and New Jersey. The telecom carriers demand money for minutes upfront and offer discounts with bulk purchases. Therefore, the distributor generally needs a credit of 14 to 21 days to sell the cards. The entrepreneur funded the supply purchases and other expansion needs through a home equity line and private loans. Also, the small business owner's accountant advised taking write-offs on the business to offset the high cost loans. This lowered the debt servicing ratio (DSR).
The business owner needed an unsecured line of credit for $400,000 to take advantage of the bulk discounts on minutes from carriers and launch a private label card for the Hispanic market.
Biz2Credit suggested the entrepreneur to show higher earnings before interest, depreciation, taxation and amortization (EBIDTA) in the current financial year. This set the stage for lower cost of funds in the future by improving the business's DSR. In the interim period, Biz2Credit analyzed the business, personal tax returns and personal financial statements. Using accounts receivables as assets, Biz2Credit procured an unsecured line of credit for the entrepreneur from two different lending institutions.
The Biz2Credit case manager suggested taking a business acquisition loan which would fund 80 percent of the acquisition price and also provide another $50,000 (through the SBA loan program) for working capital against the gas station.
"Biz2Credit was the biggest, biggest part of my success here. Biz2Credit came in like a lifesaver," she said
"I'd give Biz2Credit a 15 out of 10. Joe, my funding specialist, does a great job. He's always on point and really understands my business. Every time I've worked with him he's come through for me in a big way
"The turnaround time for funding was quick with Biz2Credit," Raza told us. "As soon as they got our information we had a decision - there was no waiting period like I experienced with other lenders."
Raza and David Bolos