Every business owner seems to be going through it right now. With the cost of fuel at an all-time high with no relief in sight, the alternative funding space had to become creative, Every business seems to be feeling the crunch between worker wages, materials, and overhead. Many need funding but they need longer terms than what a traditional merchant cash advance will offer. The pandemic has placed thousands of business owners in an undesirable situation where they depended on their personal credit cards and credit to keep the doors open during the lockdowns only to find themselves in an economy where everything costs double but they are not making as much of a profit. Businesses are finding themselves in a situation where they are changing prices, cutting costs where they can, and redoing the way they do business. Using a secured advance gives them a lower payment, more money, and longer terms. Some secured advances also have deferment options where they can focus on putting the funds to work and making money before they have to start repayment on the advance with a dismal fee. This seems to be helping a lot of people out.
A secured advance is a merchant cash advance, that operates the same, underwrites the same, and runs the same type of repayment programs. They are secured with real estate. They can go behind a mortgage and even have the option to pull cash out of them during payback the same way a HELOC does. The best part is that people with bad credit can get them. These can also save you from losing your property to foreclosure. We have seen several businesses that are behind on their mortgage and paying the current month but never getting caught back up. There are several business owners that are finding themselves in this situation with their homes and commercial property. They have equity but they have a credit score that the bank won't look at them. This is a situation where a secured advance can really help the business out.
Any business that is playing catch-up in this economy is n stranger to what a merchant cash advance is, the product is an infusion of cold hard cash that the repayment is based on the future income that is coming into your business. Where the secured advance wins is when someone that was approved to fund for $25,000.00 for 100 daily payments of $374 end up getting approvals that look more like $50,000.00 for 240 daily payments of $300. Not only is the funded amount higher, but the payment is lower. When a business has real working capital they can change things up to bring more customers, hire to full staffing, and even market and expand.
The disadvantage is that they must record the lien on the property in order to use it as security. The same-day funding option does not work in this program. Metromedia finds that on average the advance can fund the business from 3 to 30 days and the time-lapse is not of the control of Metromedia, the funders, or even the business owner. The reason for it is title work, and it depends on your geographical location on how fast title commitments come back. Metromedia also finds that property that is in a larger city tends to get title work done faster as title clerks can find results in hours, not days.
The fastest city for title commitment- is Chicago IL.
States that seem to run faster:
States that take a little longer:
There are a few tips to speed up title commitments-
Make sure you inform us of all liens
Make sure that everyone that is on the deed or mortgage fills out an application
Inform us of the contact information to the title company that you worked with on the property in the past.
Provide your underwriter with all supporting documentation within 24 hours of the request.
Thanks to new technology that is getting more popular across the country title searches are taking half the time as they did this time last year. If you own a business and you own property, even if you have a mortgage, you need to be looking at a secured advance. The inflation of prices has also been seen in real estate values. Metromedia is finding that people that bought a property in 2018 and 2019 have doubled their value in a lot of areas. The businesses that seem to be getting the most in funding approvals are the ones that were purchased in 2008- 2014.
Applying for one is easy, all you need is an application, 4 months of business bank statements, ID, and the latest mortgage statement or a copy of the deed if the property is owned outright.
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