16
April
2019

Why We Don’t Always “Maximize” Our Working Capital Loans

Working Capital Loans - 3 Min Read

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Qualifications: In business for at least 9 months with at least $120K in sales over the past 9-12 months

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One of the things we do a little differently here at Mulligan Funding, is that we don’t “maximize” your working capital loan or try to get our customers to borrow as much as possible. This takes a bit of explaining, so bear with us for a minute or two and it’ll all make perfect sense.

Sometimes, we when ask our customers how much they have in mind to borrow, they reply with something like: “well, that depends on how much you’re willing to lend!” It’s a fair and honest response, and one that we certainly understand. Everyone here at Mulligan Funding has a small business background, and we understand the vital importance of working capital and cash flow.

However, even though it would actually boost our bottom-line to loan out as much as possible, as a matter of policy we never do this UNLESS we objectively believe it’s in our customer’s best interest.

In some cases, we do indeed arrive at this conclusion – and as such, we’re happy to lend 100% of the amount that our customer has requested. But sometimes, after looking at our customer’s unique situation and goals, we may offer them 80% of the amount they requested, or 70%, or 60%…and so on.

Again, this is NOT because we’re trying to minimize our risk or protect ourselves. On the contrary, as noted above, it would actually be to our advantage to loan as much as possible.

Protecting Our Customers

Rather, it’s because we don’t want to put our customers in a position where their working capital loan repayments become overwhelming and difficult to sustain.

We also don’t want them sitting with tens or hundreds of thousands of dollars in “dead money” in their account, because they don’t have a profitable use for it (e.g. taking advantage of an opportunity, purchasing equipment or inventory, advertising their products, hiring staff, etc.). As we all know, the inflation rate is higher than the virtually non-existent interest rates that banks and credit unions pay. Money sitting in an account doing nothing is actually losing its value each month.

Re-Apply for Additional Funds

And still, there’s more to the story. If our customers accept a smaller loan amount than they requested (again, such as 80% or 70%), then if they find that a few weeks or months down the road they need additional funds, they can simply re-apply. All we typically need is a copy of their latest bank statement, and in many cases we will have the new working capital loan in their account within hours (yes, hours!).

Absolutely NO Double Fees

Plus – and this is a very big plus – to our knowledge, we are the ONLY company in the alternative lending marketplace that doesn’t charge “double fees”. What this means, is that we don’t force our customers to use funds from their second working capital loan to pay down their first working capital loan. They can treat them as two distinct, independent loans – because that’s exactly what they are. To learn more about the dubious practice of charging double fees, read our blog post about it here.

The Bottom Line

At Mulligan Funding, we’re not here to maximize our revenues at every opportunity. We’re in this for the long term – which is a big reason why many of our customers keep coming back to us (sometimes dozens of times!), and why they tell the other business owners in their network to give us a call.

We don’t feel that for us to win, our customers have to lose. We believe in a true partnership: which means we ONLY win when our customers do. Occasionally offering some customers less than they applied for is part of this commitment.

Call Mulligan Funding at 855-326-3564 to discuss your financing options today!

The information shared is intended to be used for informational purposes only and you should independently research and verify.

Note: Prior to January 23, 2020, Mulligan Funding operated solely as a direct lender, originating all of its own loans and Merchant Cash Advance contracts. From that date onwards, the majority of funding offered by Mulligan Funding will be by Loans originated by FinWise Bank, a Utah-chartered Bank, pursuant to a Loan Program conducted jointly by Mulligan Funding and FinWise Bank.