Now that the CDC has announced that fully vaccinated people no longer have to wear masks, businesses are re-opening in many states and taking down their “mask-up” signs. Many businesses, especially restaurants, have suffered during the pandemic crisis. According to Yelp, 150,000 business declared temporary shutdowns and 100,000 of those businesses later announced permanent shutdowns.
Douglas Muir, professor and CEO of the Family Business Fund, was a successful restaurant chain owner and now a small business alternative funder. Muir knows first-hand how small businesses were affected across the U.S. It was a truly tough time that tested all entrepreneurs.
Muir helped many businesses get through the pandemic by extending funding terms and explaining the different government programs like PPP loan or Economic Injury Disaster Loans (EIDL). Many small businesses do not qualify for traditional bank loans.
Why Are Small Businesses Denied Traditional Business Loans?
Approval – If you meet the stringent requirements for approval, you will be expected to pay an interest rate that falls within the federal guidelines at the time the loan is issued. Traditional lenders providing commercial loans often require monthly financial statements throughout the life of the loan. You may even be required to insure any larger items purchased with the funds you receive.
Denial – The problem with this type of loan for many business owners are the upfront costs that are incurred, as well as the credit history that is required for approval. Without the collateral and good/excellent credit score that is expected, business owners are denied funding. Because of this, smaller businesses are relying on other alternative lending products, such as merchant cash advances from the Family Business Fund.
Why Join the Family Business Fund Platform and Help Small Businesses?
The Family Business Fund is a platform that connects people who are interested in micro-financing between $5,000 and $50,000 cash advances to companies that have been in business for at least two years. The financing is on future sales, account receivables, or purchase orders and is never longer than six months. In short, the Family Business Fund platform gives you future receipts at a discounted rate. Typically, businesses wanting faster access to their cash (as opposed to waiting extended periods of time for their invoices to be paid) will participate in this kind of transaction.
The Family Business Fund reduces risk in the merchant cash advance industry through the following:
Underwriting, underwriting, underwriting – This is the key to success. The owner and CEO of the Family Business Fund was a credit risk analyst for one of the top five banks in New York City. She has invented a process using technology that gets smarter with each financial transaction and in turn has reduced the default ratios significantly in comparison to national averages.
Educating the business owner – Small business owners are guided and educated on the amount of cash they want compared to the amount of cash they need. This is not done by many merchant cash advance companies.
Amount of financing – Many other merchant cash advance companies will not finance businesses under $50,000. By only financing $5,000 to $50,000, the payments are affordable and easy for the client
Time Frame – Merchant cash advance companies that extend their payment plans to over 1.5 years increase their default ratio significantly. Therefore, the Family Business Fund will never extend financing for over 6 months.
About Family Business Fund
The Family Business Fund (FBF) was founded in 2018 to help ensure that small businesses have access to the resources needed to thrive. FBF is an SEC Reg. D., 506C, high-yield, fixed-income fund for accredited investors.
For more information about how you can invest in the Family Business Fund, contact Douglas Muir at douglas@familybusinessfund.com or call (888) 884-6442 ext. 3.
