“Loan doctor” to small business: Avoid big banks
Large banks are making noise about lending more to small companies this year, but financing expert Ami Kassar is still advising his clients to steer clear.
The founder of Philadelphia-based MultiFunding LLC, which brokers loans for small businesses, said his customers stand a better shot at success with regional and community banks.
“As a general rule we don’t get near big banks,” said Kassar, whose firm has arranged 28 deals since launching 15 months ago and has more than 60 others in the pipeline. “The big banks are, in my opinion, full of big talk in terms of their commitment to small business.”
The vast majority of companies MultiFunding works with seek loans of $1 million or less, making them less attractive for larger banks to commit resources to, Kassar said. And when it comes to applying for government-back SBA loans – not typically among Kassar’s top options – he prefers to work with virtual lenders who facilitate the process online.
Kassar, who arranges deals on behalf of customers nationwide, only takes on customers he believes stand a good shot at getting funding. Some 30 percent of his candidates have collateral, making them more attractive to lenders.
A surprising number of small businesses don’t understand their finances or have a good handle on their accounting procedures, he said.
“I joke that we’re the loan doctors,” said Kassar, noting that about 15 percent of applicants have to be turned away because of lack of credit. “Most people have no idea what they’re qualified for.”