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How United Capital Source Changed The Game For Small Business Loans

A business owner playing a chess game

When the alternative business finance market really got going during the tough economic years starting around 2007, everyone was in survival mode. Big banks couldn’t have been giving small business loans even if they wanted to. Everyone was trying to ride out the storm. Alternative business financing grew because it was the only option for unsecured and bad credit business loan options small businesses had.

Today, alternative finance options have expanded. Small business owners have more flexibility in finding short term small business loans. With increased options and competition within the alternative business lending market, many alternative lenders focus on immediate volume. Putting together small business loans without taking a long view of any individual small business and its future needs.

Most alternative business financing companies don’t take any risks for these short term business loans on their own balance sheets. They match-make and pass the risk on to someone else. Some even charge upfront fees to provide a quote! They make no real investment in their small business clients, financially or otherwise.

At United Capital Source, we take a different approach. Our focus is squarely on our small business clients’ long-term viability, not just one short term business loan. I’ll never stop saying it: We always want to do what’s right for our small business owners.

Our reps work with their clients as a business advisor who cares about the business’s long-term success. Their interest isn’t to maximize the return on one specific small business loan package. They want to make sure any loan package is in the interest of the business’s future health.

We Only Loan What’s Needed

The first way we do that is to loan the amount needed at the time, not what the small business qualifies for. It’s not uncommon for a small business to qualify for more financing than their current needs. Alternative business lenders that only see the short term push owners to borrow the full amount available. That’s good for the lender or broker. But taking on too much debt can sink a struggling business and turn a healthy business anemic. UCS is here to help businesses, not suck them dry.

Instead, our reps dig into each business’s operations. They help owners understand which different business loan instruments and packages make sense for their business’s operational quirks.

For example, a beachside restaurant is a classic example of a highly cyclical business. They need some working capital to get them through a low period. We aren’t going to push them into a program that will send them enough cash today to cover operating costs for five months when their busy period starts in three months.

We’ll assess their past performance to see how much is really needed to hold them until their business is expected to take its normal upturn. If their busy period turns out to be less busy than usual – we’ll be there to help them get the right package for that circumstance. But why put the debt on their balance sheet and make them pay for the money they don’t need? We’re not doing it.

United Capital Source Puts Skin in the Game

Our reps always put in the sweat equity to make sure you get the business loan program that meets your terms. We have relationships with a huge number of business finance companies to create a lot of flexible options.

In some cases, we also invest our own money. While we’re not going to loan a small business owner more than they need, we sometimes fill in gaps if a business lender can’t provide the full amount needed.

For example, let’s say a medical practice comes to us to get $50,000 in working capital, but the business lender will only provide $40,000 based on their own underwriting guidelines. The alternative business financing industry is ever-evolving, and most often, lender underwriting guidelines don’t get updated with the frequency that the industry evolves.  That’s where UCS’s true value comes to play. We have in-house underwriters that will review the scenario, and if it’s justified, we’ll provide the other $10,000 to make sure the business owner’s needs are met. UCS doesn’t separate itself from the risk. If we’re working to provide your business with financing, we believe in your business’s long-term success.

We’re Lender Agnostic

I already mentioned that UCS has strong relationships with a lot of lenders. This does more than just let us find the small business loans that fit all the criteria a small business owner has. It also means we’re not dependent on a small group of lenders to meet our client’s needs.

We have no back-end preference about which lender funds the package. Our reps advise their business owners based on the package terms, not the company behind the package.

Hall of Fame Account Reps

I talk a lot about UCS’s reps. I love our reps. Each of our account executives has their own experience with over 1000 funded small business owners and has been through all the good, bad, and ugly. They’re not recent college grads following a script. They’re individually responsible for a high funding volume, facilitating up to six or seven figures in small business loans each month.

Their educational background and UCS training ensure they’re proficient in all aspects of the deal flow, not just closing the sale. They understand the ins and outs of risk assessment and financing, as well as servicing. That’s why they’re so productive. Every top sports league is filled with the most skilled athletes in the sport, but only a few are genuine Hall of Famers. Our reps are Hall of Famers.

This is how each rep can dig into a small business’s financial statements and operations to provide valuable guidance. Each of our small business owners has their own dedicated account rep. Our online interface is there to facilitate our workflows and processes. That keeps transaction costs down for everyone. But nothing replaces real human-to-human contact—a real person to talk to, who knows your business and your financial needs. At UCS, the same rep stays with small business owner each step of the way.

How UCS Got Here

I worked as a plumber during college. I was going to stick with that. It’s a good, reliable job. But a friend of mine got me a job with Merchant Cash and Capital, an alternative lender, in 2007. It took little time to figure out this is where I belonged.

So I’ve been involved with alternative business funding since the early days of its growth. Then, alternative funding was the option of last resort. It grew because in many cases, it was also the only option small businesses had.

Now alternative business lenders are an accepted, critical part of the business capital landscape. I started UCS in Long Island, NY, in 2011. We funded $240,000 in business loans in our first month.

A few years later, we outgrew our Long Island offices, and UCS moved to New York City in 2014. That’s what made sense for our business. It opened us up to a broader talent pool. It fostered growing partnerships with other business lending companies in Manhattan. It established our place as one of the top alternative business funding companies.

Since 2011, we’ve funded over 11,000 businesses to the tune of over 500,000,000 dollars. We just had our first $10 million month in small business loans provided, which puts us on track for a total deal flow of over $120 million for 2016. Our growth increased by 150% year over year at the end of 2015. We look to continue our trend of growth in 2016. We generate 98% of all our business in house and from the referral business. Only two percent come in through business loan brokers.

Here are some quick numbers about our small business owners:

  • On average, most owners are looking for small business loans between $5,000 and $25,000.
  • Our deal minimum is $2000, and our largest deal was $2 million.
  • The average small business loan we extend is $25,000.

Bad credit business loans and merchant cash advances are our two most popular programs. But we work with financers to make a range of alternative lending options available. Our underwriting principle is to look to the business’s past performance. We don’t only look at personal or business credit rating as part of our risk assessment criteria. There are many things we look at when working for you.

We’re especially proud of being one of the country’s top direct lenders to women-owned businesses. Women are a growing and important part of our entrepreneurial culture. Gillian B. White writes in The Atlantic, “About 29 percent of America’s business owners are women, that’s up from 26 percent in 1997. The number of women-owned firms has grown 68 percent since 2007, compared with 47 percent for all businesses.”

That’s some serious growth. We’re eager to continue to be a part of it.

UCS Combines Old School and New School

The alternate finance sector’s growth and stability are good for small business owners if they take the time to shop around. There’s a lot of differences among the players.  At UCS, our vision is to bring funding solutions to SMBs that don’t necessarily fit either the traditional bank or non-financial institutional lending model.

Our model is going back to the old school, small-town banker, who knows your name and your business model. Then we layer in the 21st-century technology and pace of business to create fast, flexible lending packages that uplift a small business. Not weigh it down.

While we can’t completely go back to the nostalgic “deal with a handshake” model of old, our reps establish their relationships both with small business owners and business lenders through honesty and integrity. That means they don’t always tell either what they want to hear. But we always serve our customers in good faith, thinking of their long term well-being.

Our interest is in long-term relationships, not short-term profits.

We will help you grow your small business.

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