You and your linemen give everything you’ve got to help areas decimated by nature’s wrath get back on their feet. But being out there for days at a time costs money.
In fact, if you’re responding to a disaster in the next state or beyond it may cost all the working capital you have. You help countless people restore a measure of certainty to their lives. But you and your men then return home to an uncertain future because utilities don’t pay off invoices for 90 to 120 days.
How will you pay your crew? What about the subcontractors that went with you? How will you be able to respond next time? Some storm restoration companies have turned to Fundera for help. But is there a better way? Let’s take a look.
What is Fundera?
Like Nav, Fundera is a loan matchmaker. They don’t actually provide funds of any kind. What they do is provide a resource for you to cut through some of the barriers that separate companies from affordable, or at least somewhat affordable, loans of various types.
Fundera has been around since 2013 and operates under the premise that less is more. That is, they only work with a small group of mostly online lenders they have vetted as part of their quality over quantity model. This seems like a good idea that might help someone like you cut to the chase when it comes to finding bridge financing. But is it?
How Does Fundera Work?
Fundera works by connecting business owners with business lenders. They’re upfront about the fact that most of the lenders they work with are focused on providing startup loans or loans aimed at helping companies grow. And that’s great.
Most companies need a shot in the arm now and then. But what storm restoration companies need is some way to bring stability and predictability to their cash flow. With your outstanding invoices, you wouldn’t need a business loans if the utilities would just pay you instead of making you wait months.
That’s what Payost is for. And we’ll get to that in a minute.
What You Need in Order to Apply to Fundera
Fundera loan requirements include:
- Filling out an online application - Include your personal information, how long you’ve been in business and your credit score. Also include your company’s annual revenue.
- Submitting your application - After filling out the application, hit the submit button. You’ll be provided with list of credit options and potential providers.
- Receiving your credit score - This tends to cause the process to grind to a halt as it can take anywhere from 24 hours to two full weeks.
Once you have everything you need, you’re in a position to decide if any of the lenders has anything of value to offer or whether you should simply choose invoice financing from Payost instead.
Payost doesn’t ask for your credit score or require you to fill out a lengthy application. We don’t give you a list of potential lenders and then say “Good luck.” If you have outstanding invoices with a triple A credit rated utility we pay them off. That’s it. No monthly payments. No going into debt, no having to offer up your equipment as collateral.
The Payost model is based entirely on the creditworthiness of the utility or other AAA credit rated company holding your invoice.
Other Factors to Consider
Should you decide to go ahead and test the Fundera waters there are a few things you’ll want to keep in mind.
- They don’t lend money - They make money by referring you to lenders.
- They don’t guarantee anything - You might get the money you need. You might not.
- It all comes down to you - Your credit rating will determine if you get help.
- You’ll be committing yourself to payments - Do you really want to do that?
- Your credit rating may take a hit - If a potential lender does a hard pull.
- Who will help you next time? - Chances are, cash flow problems will recur if you’re in the storm restoration business. Are you going to go back for a loan every time?
That last point is particularly relevant because the nature of storm restoration work is that you’re incredibly busy in short bursts. And then you wait.
As long as your invoices are paid in a timely fashion that’s not a problem. But utilities and the phrase “paid in a timely fashion” don’t exactly walk hand in hand. That’s why you need Payost invoice financing.
Let’s review Fundera shall we?
- They require you to provide personal information and then match you with potential lenders.
- Most of their lenders prefer to provide loans intended to grow your business.
- They don’t guarantee that anyone will actually loan you anything or guarantee a rate.
- They work with a limited number of lenders so your choices are limited.
- Once you decide to accept funding from one of their lenders you’re locked into monthly payments.
Borrowing and spending is not the way to prosperity
Fundera vs Payost Comparison
Now let’s compare the pros and cons of Fundera to the pros and cons of Payost.
- There’s a decent chance you’ll find someone willing to lend you money.
- The application process is quicker than it is for a bank.
- Applying for financing through Fundera doesn’t cost anything.
- Acceptance is dependent on your creditworthiness.
- Interest rates typically start at about 7% and escalate quickly.
- Lenders are likely to do a hard pull credit check on you.
- Fundera complaints often center around “factor rates” which are applied at the time of disbursement and can be quite steep.
- Applying and approval are fast.
- It’s not based on your credit.
- No personal guarantee is needed.
- There’s no monthly payments.
- You receive your money—not the bank’s money.
- You need to have outstanding invoices with a utility or a GC who has invoiced a utility for your work.
Bottom Line: Should You Try Fundera?
Since there is no fee it won’t cost you anything to apply for a loan through Fundera. The only question is “Why would you bother?” Payost provides payment on your outstanding invoices instead of floating you a loan or business line of credit that could wind up dragging your company down in the long run.
In addition, the whole notion of storm restoration companies borrowing money every time they have a cash flow issue is problematic because it’s likely to happen on a regular basis, since utilities take so long to pay out.
The better option is to use Payost Invoice Financing and get paid for your work now so you can move forward free of debt and ready to face the next storm or natural disaster. We’re less problematic than invoice factoring, faster and less intrusive than banks.
With us, receiving money that’s owed to you makes a lot more sense than borrowing money that belongs to someone else. Go to the “Apply Now” page on the Payost website now. And leave cash flow problems behind!