We here at Bach Capital Management are deeply committed to helping our clients raise the capital they need to grow their business and achieve their dreams. The following represents a synopsis of what we look at and the means we employ to get there for our clientele.
I. Determine Your Credit
Any type of lending, be it secured by collateral or unsecured, whether the loan is sought from banks, hedge funds, private lenders, or friends and family is based upon the borrower’s creditworthiness. That is, the ability of the borrower to repay the loan. Creditworthiness is measured by an individual’s FICO Score.
1. What is a FICO Score?
A FICO Score is a three-digit number based on the information in your credit reports. It helps lenders determine how likely borrowers are able to repay a loan. This, in turn, affects how much you can borrow, how many months you have to repay, and how much it will cost (the interest rate).
When you apply for credit, lenders need a fast and consistent way to decide whether or not to loan you money. In most cases, they’ll look at your FICO Scores. You can think of a FICO Score as a summary of your credit report. It measures how long you’ve had credit, how much credit you have, how much of your available credit is being used and if you’ve paid on time.
Not only does a FICO Score help lenders make smarter, quicker decisions about who they loan money to, it also helps borrowers get fair and fast access to credit when they need it. Because FICO Scores are calculated based on the borrower’s credit information, borrowers have the ability to influence their score by paying bills on time, not carrying too much debt and making smart credit choices.
2. What is a good FICO Score?
In general, many lenders find scores at 680 or above as indicating good creditworthiness. Typically, the higher your score, the lower the risk and the more likely creditors are to lend to you.
There are general score ranges recognized by creditors to help them make lending decisions. These ranges can also serve as goals for borrowers to achieve.
FICO SCORES BY PERCENT OF SCORABLE POPULATION
FICO Score Ranges
<580 - Poor - Well below the average score of U.S consumers. Lenders view this borrower as risky.
580-669 - Fair - Score is below the average score of U.S. consumers, though many lenders will approve loans with this score.
670-739 - Good - Score is near or slightly above the average of U.S. consumers and most lenders consider this a good score.
740-799 - Very Good - Score is above the average of U.S. consumers and demonstrates to lenders that you are a very dependable borrower.
800+ - Exceptional - Score is well above the average score of U.S. consumers and clearly demonstrates to lenders that you are an exceptional borrower.
II. Unsecured Funding
As our economy slowly restarts, the entrepreneurial spirit unique in Americans will again rise as people will seek out their dreams. The fuel of dreams is capital and for entrepreneurs and start-ups accessing capital is always problematic. We have developed a system to raise unsecured funding in the form of personal and business credit cards with no upfront costs. These cards have introductory rates of 0% Annual Percentage Rate (“APR”) for generally the first 6 to 12 months which typically can be extended.
We have five (5) core categories that can be found on an individual’s credit report to determine whether someone is a good fit for the Unsecured Funding Program:
a. FICO Bankcard 8 Score - This is an Experian Score that almost all credit card issuers rely on. This score should be at 680 and above;
b. Age of the Credit File - Also known as the “Age of Your Credit History”. This is the length of time that you have had established credit for. Typically, there should be five (5) years of credit history to be a good candidate but a minimum of two (2) years is necessary. Anything less than that and you’ll probably need to wait until your credit profile ages.
c. Hard Credit Inquiry - A hard credit inquiry is created when a lender pulls your credit report to determine your eligibility of a loan. Hard inquiries occur regardless of whether you are approved or denied for the loan. Credit Card companies do not like to see more than five (5) hard inquiries within the last six (6) months. If you do have more hard inquiries you will most likely have to wait for them to fall outside of that six (6) month window,
d. Late Payments & Derogatory Comments - You cannot have any sort of late payments within the last two years, or any derogatory remarks, which would include liens, bankruptcies, collections, etc,
e. Revolving Utilization - This reflects the amount of credit that is used compared to the total you currently have established. The credit utilization percentage should be under thirty (30%) percent.
Once you have met these five (5) categories, the only thing that is required is a copy of your driver’s license and a recent utility bill with your name and address dated within the last thirty (30) days. We do not require any sort of tax returns, income statements or Profit and Loss Statements.
With all the documentation in hand we start the process. We can achieve up to $150,000 in the form of personal and credit cards in a three (3) step process over a twelve (12) month term, with each stage achieving approximately $50,000 in funding. Borrowers with military service, be they active-duty service members or veterans, generally qualify for greater amounts of unsecured funding on a quicker basis.
Our fees are entirely performance based, so we only get paid on the amount of funding that we get for you. The fee is fifteen (15%) percent of the total amount of unsecured funding secured and are paid solely out of the personal and business cards obtained. There are no additional charges.
1. Credit Repair
We have established relationships with Credit Repair Firms that specialize in removing hard inquiries and late payments. Additionally, we have a short term lender who may pay down your current credit utilization so that your credit utilization percentage would fall below thirty (30%) percent. By taking advantage of these programs you would be increasing your FICO Bankcard 8 Score substantially allowing you to participate in the Unsecured Funding Program and/or generally increase your ability to borrow money from any other source.
2. Liquidation/Monetization Service
We offer a Liquidation/Monetization Service to allow you to quickly and easily get cash from your credit cards without paying high cash advance fees. We only charge a ten (10%) percent fee, as opposed to the 20% - 30% that is usually assessed by most Credit Cards for Cash Advance Fees, The benefit is not only do you avoid the high cash advance fees, but you can also draw down as much of the card that you need, without the limitations that come with cash advances. Cash advances will usually let you take out only a small portion of cash from the total credit you have, So, if you have a $1,000 card, you might be able to take out $250 or $300. We have the ability to take out your FULL credit limit and turn it into cash to meet your needs.
The process itself is simple. We get a W-9 filled out, a Credit Card Authorization Form so we know what card you want to liquidate and the amount you need and a Monetization Form which informs us which bank you want the money sent to. It takes two (2) business days for us to receive the funds from the card you have designated and then up to two (2) business days for the money to be received in your account. We can also expedite the transfer of the money to you for $60 by doing a wire transfer so that you will receive the funds in about half of the time.
How much are you thinking of monetizing right now?
III. Regulation D Exemption Program
Raising capital from investors properly and effectively requires the development of a securities offering executed in compliance with State and Federal Rules. Most small and medium sized companies choose the Securities and Exchange’s (“SEC”) regulation D Exemption Program to execute such offerings. With the advent of the JOBs Act 506 (c) Program, companies can now execute a “public offering” of their investment opportunity and securities offering while still retaining the low execution cost along with the ability to continue operating as a private company.
There are two (2) main advantages that the Regulation D offering provides to companies which are as follows:
(a) Provides the ability to solicit investors and sell them equity or debt securities in compliance with applicable regulations and;
(b) Provides the fundamentals necessary to provide a concise investment structure, SEC disclosure and the capability to execute the subscription of investment funds into your company effectively.
Most companies use the Regulation D Exemption program to raise from $1,000,000 to up to $50,000,000 in capital. Regulation D offerings have been used for a wide variety of transaction and industry types (such as corporate seed capital, corporate expansion capital, film production capital, real estate funding for acquisitions, development projects, golf courses, rehabs, etc.), capitalization for early to pre-IPO stage internet and technology companies, expansion funding for retail companies, product development and distribution funding.
Please feel free to review our website at www.bachcapitalmanagement.com and contact us to explore your specific needs and how you can be better positioned to make more profitable investment decisions.