Hey there,

Thanks for stopping by and we’ll get into the nitty gritty here in a second, but I know it always helps to have a general idea of what we’re talking about before that point.

Start off with the “main idea” if you will, so to make sure we’re on the same page beforehand, let’s talk about:

ROI financing, what is it?

In the simplest terms, it’s a product that’s been around for a while now, but it really came to relevance after the 2008 recession.

Guess I’m not sure how familiar you are with the “reason” for our recession back then, but in the simplest terms, bankers got greedy.

Instead of caring about their customers and doing the right thing for them, they cared about goals and gave loans to people they shouldn’t have.

This is what created our “bubble”, and after seeing how this “lack of regulation” could create issues again down the road, congress decided they’d step in.

Good idea at first, but like everything else the government does, it was 7 steps forward and 10 steps back.

If you want to get into the full story of what I’m talking about, you can go read the Dodd-Frank Act below:

Dodd-Frank Act (an overview)

But to paraphrase, they put a bunch of lending regulations in place.

Now, banks had certain rules to follow, along with quarterly audits to abide by…

Something that doesn’t sound like a bad idea at the surface, but the only issue is that it forced banks to do a “complete 180”.

Now, instead of giving loans to everybody, they gave loans to nobody.

Well, I guess I shouldn’t say “nobody”, because they obviously still lend to businesses…

Hard to survive without that interest income, but in today’s world, they only do this with companies who really don’t need the money.

I think you know who I’m talking about as well, the millionaires who could just use their own money if they really wanted to, but they’d rather get a cheap interest rate loan from banks…

As it makes more sense for them to do this, and even though this sucks for us, it’s actually been a great pivot for banks.

Instead of having to worry about giving out bad loans and constantly dealing with repossessions, now banks give money to large companies and have less stress because of it.

Sure, their interest rates have had to come down, but they’re definitely not hurting. Quantity and quality if you will, a lot easier for them to give out a few $5M loans to larger companies, than it is to give out a bunch of $100K loans to smaller companies…

All things that have worked great for them, but the biggest issue with this, is that it’s left small business owners out in the cold.

Here we’re just trying to live the American dream, creating jobs and all that, but nobody wants to help us.

Of course, they won’t blatantly tell you this, think they’d get in trouble if they did – so instead…

They justify their denials with fancy lingo, talking about:

  • Debt service coverage
  • Collateral coverage
  • Bad credit scores
  • Etc…

All cover terms that just protect their you know what, and that’s where:

ROI financing comes into play

Since you’re here right now I know you don’t care about my backstory too much, but to give you a quick overview of how I stumbled across this, let’s just say that I decided to start my own hemp company years ago.

Saw an opportunity in the marketplace, really liked where CBD was going, so I decided to go all-in after that…

Immediately realized how hard it was to get capital for this.

In my case, regulations didn’t make things easy, but I was far from the only one experiencing this issue.

Didn’t matter what small business owner I talked to, or what networking event I attended, everybody was running into this…

And even though I fortunately got capital from a different source, allowing me to grow my business and have a successful exit in late 2019, the big “aha” moment for me – was when I connected with a guy…

Who offered this type of financing.

Again, something that’ll make a lot more sense once we get through this entire article, but the biggest difference with this type of financing – is where the funding comes from.

As I mentioned a second ago, with banks, they have to play by ridiculous rules anymore. The reason for this is because they use customer deposits to give loans, ones that are secured by FDIC insurance, and that makes them have to play by FDIC regulations.

Probably a good thing, but with ROI financing, it’s a little different.

Instead of playing with other people’s money, this industry consists of private investors, who put their own money down.

Don’t worry either, when I say private investor, I’m not talking about the type who will give you $100K for 10% of your company:

But instead, it’s a special segment of this industry, that uses their money for traditional loans.

Yes, a lot of them used to do equity investing, but after seeing how many small owners were struggling anymore…

They decided to create their own industry:

And that’s what brings me here today

Sure there’s a lot of questions on your mind right now, but the biggest two are always:

  1. Why haven’t I heard of this before?…and
  2. How can you help me?

For the first one, it’s one of those “well-kept secrets”.

In other words, it’s not an industry that’s advertised a lot, primarily because these lenders don’t like dealing with the general public.

Their resources are somewhat limited, as it’s usually just 2 – 3 people who throw their money into a pool, as opposed to millions of customers who put their money into an account…

And because of that, they don’t aggressively market their services.

Instead, they hire a select few to serve as “gatekeepers” for them, ones who know how to package up deals in the correct format…

That way they can quickly look through everything once it reaches them and well, as I’m sure you can guess, that’s exactly what I do.

Was actually fortunate enough to make these connections when I was a small business owner, thought about using my own money to start giving out these loans myself, took a step back and realized it’d probably be smarter if I just joined a company who’s already doing this.

If anything, I knew this role would allow me to see things from both sides, creating a win-win for everybody involved…

But now that we’ve covered this, for the rest of this article, I really just want to walk you through the 5-steps we take in order to help you get the funding you need.

Like doing this for a few reasons, but if anything, it’ll help you see how everything works upfront.

I know it sounds “too good to be true” to a lot of people, especially if you have “bad credit” and have turned down by banks in the past, so this article will help mitigate a lot of those thoughts…

And if you’re interested after that, I’ll leave a link to my call scheduler, that way we came jump on a call and discuss how everything would look for you specifically (along with answering any questions you might have).

Anyway, that’s enough of the small talk, so let’s jump into the good stuff now – starting with:

Step #1 – Finding your ROI pocket

Alright, so to start things off with the main “downside” of this industry, I’m going to be straight up honest with you…

These loans are always going to be more expensive than what you’d find at a traditional bank.

Not like it’s a 6,000% interest rate or anything like that, we’re still realistic, but higher risk always equals higher rates.

Common sense to a lot of small business owners, so I’m sure that’s not a huge surprise to you, but at the same time…

Expensive is always subjective as well.

In other words, before I ever start digging into your financials, I always make sure we structure things in a way to where the cost of NOT getting this loan – is MORE EXPENSIVE than the cost of getting it.

Said differently, if it costs you $1K in interest but you only get a $500 benefit from it, then yeah – that’s expensive.

Doesn’t make sense to take on any loans at that point, but on the other side of things, if you have to pay $1K in interest…

For a scenario that returns $10K in profit, then well, I’d say it’s worth it.

Truthfully, I think this is one of the biggest issues with most lending today, as most business owners wait until they absolutely need outside capital – usually to cover “necessary” items:…

Such as:

  • Payroll
  • Unexpected expenses
  • Etc…

All things that happen, and you can definitely get a loan to cover them, but if you don’t have a plan going forward – you’ll just be in the same spot 2 weeks later.

Anyway, that’s the gist of it, so before we ever start looking at loan options….

I like to go through, and make sure we can use this in a constructive way.

The options here are endless, but 3 of the most common scenarios are:

  • Marketing campaign (i.e. get a loan for marketing, as that’ll bring back more money than you’ve spent)
  • Buying new equipment (i..e buy $100K crane, so you can take on $1M in new contracts)
  • Purchase discounts (i.e. get a $500K loan, so you can save $500K in quantity discounts)
  • Etc…

The list goes on, but once we find a certain ROI pocket that’ll be beneficial for your business, we’ll then move onto:

Step #2 – Liquidity analysis

Alright, I’ll get into the actual steps of this next, but I know it always helps to step back and have a general understanding of why we do this first.

If I don’t explain that, it can get a little confusing, so in the simplest terms…

The reason we go through this process, is because we want you to understand all your options.

I know a lot of times people will come in asking for a $500K line of credit, mainly because they just want capital to play with, but after seeing what all their options are – the loan request usually changes.

Sometimes it’s just structure, other times it’s a different loan amount, as they didn’t think they could get this much money…

Whatever the case may be, it always helps to know your options first, so we start off by doing a liquidity analysis.

Doing this is helpful for a few different reasons, but the main two are:

  1. Because it’s quicker and might be the low hanging fruit you need right away, or
  2. Because it’s a separate loan, and can be used for a down payment on a larger purchase

The first reason is pretty straightforward so I’m not going to get into too much detail on it now, but for the second reason, let’s just say…

The main underwriting requirement private lenders use, is what will repay the loan in a “worst case scenario”.

This is also different from bank underwriting, as they always look at the entire picture, even things that aren’t relevant to the request itself…

And for private lenders, they usually just look at one specific item.

Happens in a few different ways, so I’m not going to cover all of it now, but to give you an example of this – let’s assume you wanted to buy a $100K piece of equipment.

Fair enough, you could easily get this loan, even if your credit was terrible…

As private lenders use “asset-based lending” for this type of request, meaning they just use the value of your asset, mainly because they could just liquidate and pay off the loan if needed – but that doesn’t mean you’ll be able to get 100% financing either.

Doesn’t make sense for them to do this in that scenario, as depreciation causes these loans to be “underwater” right away, and because of that – they’ll have maximum “advance rates”.

These advance rates will differ by type of equipment, but as a general rule of thumb, 80% is the max they’ll go.

In other words, if you want a $100K piece of equipment, the most you could get is $80K…

And that obviously creates a $20K gap.

From there, if you have $20K in internal cash, great – just use that…

But if you don’t, then you can leverage a form of “short-term” financing to cover this.

Again, they’re 2 separate loans, so it really doesn’t have any impact on getting approved for either area…

And even though there’s dozens of different areas we look at in this step, the main 4 are:

Option #1 – Revenue-based financing

This is definitely the most popular form of short-term financing, and the main reason for this, is because of how easy it is to get.

Few things that go into this, but at the end of the day, your “collateral” is based exclusively on how much money you’ve made in the last 6 months.

Said differently, if you’ve made $20K/month for the last 6 months, and you want a $20K loan…

You’ll probably be approved in 14 seconds.


  • Guarantee
  • Collateral
  • Credit analysis…

Or anything like that either, because since these lenders can structure this in a way to where they’re repaid directly from your sales, it’s a no-brainer for them.

This creates a great setup for both parties, as all existing business owners can generally get some form of financing from this, and even though it makes sense 95% of the time…

In the spirit of complete transparency, this is where we really want to make sure your ROI is intact, as this type of lending can get a little expensive.

Not like it’s going to be a 6,000% loan or anything either, but it’s generally the most expensive form of financing there is, so we want to make sure it makes sense before exploring this option.

Anyway, that’s the first area, and after that – the next place we usually look is:

Option #2 – Purchase order financing

If you’re not familiar with this type of lending, it’s exactly what it sounds like, loans based off of purchase orders…

And even though it can be used in a plethora of different ways, for the most part, people will generally use this if they don’t have any other options.

No, not because it’s “bad” or anything either, but because it’s the one form of lending that’s completely in their control.

To give you an example of this, let’s say you have a business that imports nails from China, then resells them to Ace Hardware.

Lucrative business, and things are going alright, but your supplier has started offering a huge quantity discount for all orders over $500K.

Something that makes sense for your bottom line, but the only issue is that you don’t have $500K laying around.

Because of that, you start going to banks, getting denied right away…

Even though it makes a lot of sense, and out of nowhere, somebody tells you about purchase order financing.

Something that could easily fund your next purchase, you’d just have to get your customer on board with it, so after that…

You go to Ace, and offer them a discount if they give you a $500K purchase order.

Obviously has to make sense to them, as they’re not going to buy extra nails for no reason, but assuming it’s in their best interest…

They’ll gladly do it and once you have that purchase order in place, you can use this as a “lendable asset”.

Any private lender will give you a loan in this situation, as Ace Hardware is legit and since they can see that the money is obviously there, they’ll give you a loan upfront…

Then wait to get paid, once the purchase order is complete.

Of course, there will be a fee to do so, but it’ll be worth it.

Now, you’re not only able to take advantage of a huge quantity discount, but you also have more options.

That large order just put more cash in your bank account, but on top of that, it also increased your revenue.

Remember revenue-based financing from earlier?

Yeah, that’s looking even better now, but again…

The options are endless, this is just one way to look at it.

Anyway, that’s purchase order financing and I know I’m dragging this out a bit, so to run through the last 2 quick:

Option #3 – Accounts Receivable financing

This type of financing is very similar to purchase order financing, just the exact opposite.

Funny start, I know, but what I mean by that…

Is that with accounts receivable financing, it takes place after the job is complete.

This is pretty common in the transportation industry, where trucking companies will do hauls for large companies, then not get paid for 60 – 90 days afterwards.

Not because their clients can’t pay either, but because they’re big and slow.

Wal-mart has a bureaucratic process to go through, and even though you’re “okay” with it, as you love the income they give you…

At the same time, that 60 – 90 day delay is definitely slowing you down.

You still have to pay your employees, along with covering gas and all that, meaning you really can’t scale quick…

And because of that, a lot of times these companies will “sell” their invoices to lenders.

In this case, you get the money upfront, then repay the lenders once the invoice is paid.

Small fee will also take place with this, but if you use your upfront cash in the right way, it’s a moot point.

$500 fee for $20K of new business, is an absolute no-brainer…

But again, that’s just one scenario as well.

This can be used for any company with invoices, so if you have outstanding A/R that won’t be repaid within the next 60 days, we’ll definitely look at this and see how much cash you could get from it (if needed).

Anyway, that’s it for this one, so to run through the last option quick:

Option #4 – Traditional line of credit

This is the option you’re probably most familiar with, and even though it sounds great from an “interest rate” standpoint, it’s usually not the best overall option either.

Guess there’s a few ways you could look at this, but at the end of the day, it’s hard to get a lot of money from this source.

Not only do you need a form of asset to support traditional lines of credit, but at the same time, since it’s a “blanket lien” – you’ll generally get less money from it (i.e. lower advance rates).

The asset itself can vary, but a common one is inventory. A lot of companies like to take out a line of credit when they have a lot of inventory in stock, and even though it works great, as it’s a lendable asset…

The only issue is that you can usually only get a 50% advance rate on this inventory.

Lenders know inventory is always moving, so they don’t want to overextend themselves, meaning that if you have:

$500K of inventory on Feb 1st

Then you can only get up to $250K on your line that month (and it’s recalibrated often, at least once a month, so you’ll be forced to pay off some of this if your inventory drops).

With that said, that’s the 4th option, so after we go through your entire business…

Looking at all the different liquidity options you have, whether it be used for:

  • The loan itself, or a
  • Down payment….

We’ll then move onto:

Step #3 – Big money options

Okay, with step 2 we went through and looked at all your liquidity options, that way we could see how things look from a short-term standpoint…

And for this step, we’ll switch gears and take a look at all your long-term assets, that way we can see all your options from this angle.

Like everything else, there’s dozens of different areas we’ll look at with this, so I’m not going to get into too much detail here…

But for the most part, it’s broken down into 2 different areas:

  1. Cash out loans…and
  2. New money loans

When it comes to cash out loans, this is something that takes place on your existing assets.

I covered this a little bit in step #2, where we talked about asset-based lending and all that, but to expand out a bit…

Let’s assume you have an office building that’s worth $500K, and it’s completely paid off.

Fair enough, and at this stage of your business, you’d really like $400K – primarily so you can make a lot of improvements.

  • Marketing campaigns
  • Hiring new employees
  • Etc…

And in this case, you could easily use your $500K asset and “cash out” on the equity.

This would be the equivalent of a home equity loan, where you use existing equity to get a loan, something that’s beneficial for many reasons…

But if anything, it allows you to extend out your payments.

The payment terms always depend on the asset, something that differs by lender, but:

  • Real estate is usually the longest, likely 15 – 30 years
  • Equipment depends on age, but it’s usually 3 – 5 years
  • Etc…

So again, it might not cover everything you need, but it’ll definitely give you a good chunk of what you’re looking for.

One of the many reasons why we go through this entire process, that way you can pull together funding from different angles, and for the second option I mentioned earlier:

New money

This is what happens when you’re buying an asset, such as a new piece of equipment.

Pretty straightforward, and as I mentioned earlier, the only “caveat” with this type of lending – is that there’s usually a down payment that has to take place.

In this situation, you’ll be able to get a good portion of funding via asset-based lending, something that’s very favorable for all business owners…

As lenders don’t look at:

  • Credit score
  • Cash flow
  • Or anything like that…

Just the value of your new asset, but since they never do 100% financing with this type of lending, you’ll have to get your down payment from another source.

A lot of times that comes from revenue-based financing, but there’s been plenty of cases where we’ve used cash out financing to cover a large portion of this as well.

Anyway, every situation is different, so I can’t give exact advice now…

Just wanted to give you the general overview upfront, and that takes us to:

Step #4 – Creating your customized game plan (free)

Now that we’ve thorougly dissected your business, including:

  • Finding an ROI pocket (so you can use this money to grow)
  • Identified all short-term options you have, that way you can get quick money and/or leverage for a down payment (i.e. $100K in revenue financing, $500K in purchase order financing, etc)
  • And calculated every different angle you can take with “big money” loans…

It’s time to start putting everything together, and put your action plan into place.

Don’t get me wrong, if you don’t want to move forward with any of the loan options you have, there’s no obligation or anything…

But once you see what amount of money you can get, along with the positive benefits it’ll have on your business, it usually becomes a “no-brainer” at that point.

Anyway, that’s really all I wanted to mention for now, so this brings me to my last question:

Does this sound like something that might be able to benefit your business?

Growth capital that could possibly take you to the next level, and start doing the things you’ve been wanting to do?

If so, here’s the:

Next steps

Since we’ve already discussed all the steps we take in order to help you reach your goals, the next step is easy:

Jump on a phone call, and get the process started after that.

Don’t worry either, this phone call isn’t a commitment or anything, really just a way for you to see what options are available.

Impossible to make the right decision unless you know what you’re working with, which is why I go through this process first, then let you make a decision after that.

Maybe it’s something you use tomorrow, maybe it’s something you use in 3 months, the timing doesn’t matter much…

But the important part is just getting started, as that’s where the true magic happens, so if you’d be interested in getting your free analysis – then please click on the link below:

Book Call

Sign-up for a time that works best for you, and I will talk to you then.

-Peter Charland

President. Creideas Capital

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