What defines situational money
Situational money is not defined by the greenbacks, average daily balances, or anything to do with banking. Situational money has everything to do with opportunity. It has been no secret that the loan process at the bank can be daunting, sluggish, and flat-out impractical. What happens when the bank takes its sweet time processing your loan application? That opportunity that was time-sensitive passes you buy while you are sitting in underwriting. That is situational money. It's the money you need in your business because there is an immediate need. Since the pandemic and especially now, banks have been understaffed, and to top it off, they have tightened up their requirements and made it harder for you to get funding.
Missed Opportunities, or worse...
Like most business owners, you probably have experienced the issue when you find a killer deal on something you want or need for your business. It happened to Gregory, the owner of an Indianapolis-based HVAC company. He found a deal on a pickup truck that he planned to buy and put another technician on the road; he mentioned, " I have been so busy that I have to turn away work." When Rick from Metromedia Funding Solutions sat down with him, they pinpointed that his five technicians profited him around $5,000.00 a month after the payroll, materials, insurance, and taxes were paid. He has several techs ready and willing to work. Greg only needed the truck. The 2014 Ford F-150 he found on the Facebook marketplace only had 62,000 miles on it, and they were selling it because the seller was moving to Florida, and he listed the truck for $15,000.00 on Facebook. Greg said he contacted Rick because when he went to his bank, they took four days to approve him for a loan, but it was too late. Sadly the truck sold.
That missed opportunity cost more than initially thought.
Greg was upset because he lost a steller deal. Rick and Greg discovered that the truck was priced under the blue book value by over $6,000.00, but the opportunity was not only the lost deal for the truck but its the lost revenue stream for not having the additional tech running service calls. Greg had looked at a merchant cash advance many years back and walked away from it because of its rates. Rick explained to Greg that he would not have lost the deal had he used a merchant cash advance in this situation. Greg found another good deal, similar to the Ford, but the truck was a year older and had close to 100,000 miles. It was still a good deal, but not like he had.
Here is what you do in a "situation."
Granted, Merchant cash advances are more expensive than loans, but the trade-off is you can usually apply for one and fund in many cases the same day. Had Greg used the merchant cash advance tool when he found the first truck, he would have been able to fund and buy that truck up before someone else did. He has a message for anyone in business. He says, " keep a funding company on speed-dial if you need it." Rick at Metromedia Funding Solutions says that there are a lot of people that keep his number locked into their phones. Rick also mentioned that some business owners hunt up deals on equipment, tools, or inventory and call him to get funded the same day. He said, "those are the smart ones." He further mentioned that the business owners in that mindset are making double what their competition is making regardless of their industry.
Do you have a "situation"
The merchant cash advance program is not for everyone. The program is helpful for situations like we mentioned above; it is also good when you have a pressing expense that could hurt you or your business if it is not paid, like payroll or taxes. Rick mentioned that it is not "walk around the mall money" and says that if someone takes a merchant cash advance out, they should have a defined plan of action to put the money to work for the benefit of the business. He said you should not use it to pay ongoing bills. Suppose you are struggling to make ends meet. In that case, the better solution is to work with Metromedia's business development department to find additional revenue streams to keep the business running at a profit.