As a small business owner, a big part of your growth journey will be determined by your ability to find capital investment at the right time. At different stages of your business lifecycle, you will need liquidity – either to help you operate smoothly or to invest in business expansion.
As capital is almost a continuous requirement, it is useful to maintain a long-term relationship with a reputable alternative lender. Many small business owners get in touch with alt-lenders, like the New York-based Cresthill Capital, looking for quick funds, but this first interaction/ deal with a financing company can easily be turned into a long term financial partnership that can be beneficial for both the lender and the business.
Better Deals:Working with known agencies will naturally help small business clients access better terms and conditions. As a long-standing client, an SME owner will be able to negotiate more reasonable costs because the funding company is also working on the assumption that a long term paying client is worth smaller margins.
Faster Funding: With an existing relationship, approval and cash processing can be hastened considerably. Firstly, the lender will already have most of the client’s documents with them, and secondly, they would be naturally inclined to go the extra mile to help a known client. For critical, last-minute financing, an existing relationship with a lending agency will help you get hold of money faster.
Better Service: With prior associations comes the ease of communication that results in better customer service. Clients would already have assigned funds managers, and a quick call and simple paperwork are all that would be required to get started. They might also have a friendly relationship with the lender’s team, which would give them access to important information and preferential treatment.
So how can small business owners ensure that they find the right partner and keep their relationship on the right footing? Here are some tips from us –
Research and test to find the best alt-lending partner
When looking around the alternative lending industry for the first time, we would recommend that business owners do thorough research in the background and reputation of the companies on their shortlist. Ask for referrals and reach out actively to old clients to build an accurate picture of their offers and work ethics.
It is also important to do your homework and find the best offers across the industry. This would ensure that you always have a good starting point for discussions with the financing company.
Set clear expectations:Clients should always have a clear set of dos and don’ts when it comes to funding and their business goals. Sharing these early in their partnership would ensure that everyone is on the same page right from day one.
For example, Cresthill Capital reviews always mention that the initial goal-setting talk with funds managers helped clients opt for the right financing offer, which they found invaluable in the long-run.
Communicate well:Communication shouldn’t just stop once the deal is signed, and money is paid; it shouldn’t just devolve into reminders or follow-up emails. Constant contact keeps both the lender and the client updated.
At Cresthill Capital, the managers schedule regular calls to catch up with the business owners whose accounts they are handling. These calls not just help SME owners get vital advice on financial matters, but also work as a sounding board for upcoming business plans.
Conclusion: Capital injections are a recurrent requirement for almost all small businesses – with modest nest eggs and fluctuating revenues, SMEs always need third-party financing to run their business smoothly and to invest in growth. In this case, if they find an excellent alternative financing company, then it makes complete sense to stick with them and build a long term partnership.