USe of Biz2credit Loan

Uses of Biz2credit Loan

Success Stories /Refinancing

Dr. Eduardo Pignanelli's case study

“It used to be if you were a doctor, you would have no problem getting a loan,” says Dr. Eduardo Pignanelli, founder of Clinica Modelo de Especialistas in Manhattan’s primarily Hispanic Washington Heights section

Despite the passage of the Small Business Jobs Act earlier this fall, challenges for small businesses – even doctors running successful medical practices – remain in securing capital for growth and expansion.

Yet, despite revenues of close to $7 million annually, Dr. Pignanelli had difficulty finding funding at a reasonable rate.  He then approached Biz2Credit for funding to construct his expanded facilities.  Not only was the doctor able to secure funding, he also replaced his high cost of working capital with Biz2Credit’s help.

The Results

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Dr. Pignanelli was able to raise over $4 million in funding at 6%.

He received a line of credit at U.S. prime +1 (4.25%) -- replacing an existing line of 8.25%

Clinica Modelo de Especialistas has created 15 new jobs in upper Manhattan.

Dr. Pignanelli has also done a video testimonial about his experience.  See him describe his experiences in his own words:http://www.youtube.com/watch?v=cxbiQxhf5mE

Well Established Medical Practice expands with a new low cost Credit Facility

A well established medical practice running for 15 years in Manhattan doing around USD15million

NYC running approached Biz2Credit to replace an existing high cost USD1.9million term loan with a low cost alternative as well as get a USD 1million Line of Credit (LOC) for business expansion. The managing doctor is one of the leading anti aging experts in the country and has a team of around 40 people in doctor's office. The money was required to fund business expansion as well as launch a new line of products and services for which LOC was required.

Biz2Credit also helped the business to prepare a business plan as well as financial projections for next 2 years in order to set the business to get increased working capital line every 6 months down the line.

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Benefits

The Medical Practice was able to lower its interest cost from 8% to 4.99% on the term loan.

The line of credit was sanctioned at US prime plus 1 (4.25%)

The business has been set up for further increases in line of credit every 6 months.

Business has been able to add another 5 jobs from the time it got the low cost funding.

Due to lower debt servicing ratio, the business has become eligible to get another USD0.5 million in funding.

Medical Equipment Distributor Swaps Expensive Vendor Financing with Accounts Receviables Financing

A medical equipment distribution company has been in business for 2 years. From 2006 to 2007, the company's revenue grew by over 900 percent...

BackgroundA medical equipment distribution company has been in business for 2 years. From 2006 to 2007, the company's revenue grew by over 900 percent. Low sales in the first year of the business prevented the company from getting a line of credit from a traditional bank. Therefore, the owner is forced to finance business expansion with high cost loans from vendors.

The NeedThe business owner wanted an inexpensive source of funding to replace the high cost vendor financing.

Financial SolutionBased on the estimated value of the accounts receivable, Biz2Credit suggested using a line of credit against the business's accounts receivables. The company was advised to leverage 85 percent of receivables to service new accounts and manage increased billings from existing clients with cheaper funding. .

Distributor Lowers Financing Cost and Secures Cash Flow

.Background

An entrepreneur owns and operates a company that distributes discounted health, beauty, and food products to retail stores and government entities. The New Jersey based company generated $15 million in revenue in 2007.

The Need

To service large government contracts, the company must purchase inventories in bulk. However, receivables from the distribution business's 200 retail clients accounted for about 60 percent of the company's total revenue. The distribution company wanted to ensure timely and secure payments from retail clients to maintain inventory purchasing power and cash flow stability.

Small Business Loan Solution

The client subscribed to D&B ' a leading source of commercial information. With the subscription the owner was able to'

Review and monitor business ratings and payment history of new and existing clients

Publicize payment history and good standing of company to generate new business

Establish business credit that lowered the cost of financing by around 200 basis points

Wholesale Distribution Business Refinances an SBA Loan with a Traditional Loan

In 2006, an entrepreneur used a 10-year SBA loan to purchase a small business that distributes discount goods and beauty products...

Background

In 2006, an entrepreneur used a 10-year SBA loan to purchase a small business that distributes discount goods and beauty products. The loan put an all encompassing UCC lien on the business, which prevented the company from raising financing.

In 2007, the company generated annual revenues around $15 million. The business is based in New Jersey.

The NeedThe business owner wanted to compensate for declining margins by adding clients and increasing sales volume. By focusing on winning state and government contracts, the owner could scale up the business with stable and reliable clients.

Small Business Loan Solution

After reviewing the business and personal financials of the entrepreneur, Biz2Credit recommended refinancing the SBA loan with a traditional loan and taking a line of credit against the strength of the business, accounts receivables and personal credit of the owner.

By replacing the SBA financing, the small business owner could extend the loan term and apply for a line of credit.Unlike a term loan, the entrepreneur only has to pay interest on the used amount of a line of credit.

Biz2Credit set up revolving lines of credit to ensure that the business's credit will grow with the company's revenue. The owner received the loan at prime rate

.ResultsRefinanced a $1.2 million SBA loan with a traditional loan within 30 days

Increased loan term by five years

Received a $500,000 line of credit at prime

Removed UCC lien against the business

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