The Month End Podcast

Episode 29: Keith Kohler • Financing Man

April 04, 2023 Keith Kohler Season 1 Episode 29
Episode 29: Keith Kohler • Financing Man
The Month End Podcast
More Info
The Month End Podcast
Episode 29: Keith Kohler • Financing Man
Apr 04, 2023 Season 1 Episode 29
Keith Kohler

The Month End provides emerging inventory-based brands real life knowledge in the accounting, finance, and operational world. Our guests are not only similar brand founders and owners, but key stakeholders and contributors to the industry. Each episode provides a glimpse into the vast experience and insight from its guest’s unique backgrounds in a casual, conversational tone.


• • •


In episode twenty-nine, Accountfully's CEO and Partner, Brad Ebenhoeh, sits down with the Financing Man and the vision behind K2 Financing. Keith knows the preparation needed at various stages of business to be best aligned with the correct type of financing based on its goals and vision. Brad and Keith address a number of considerations a small business should be attuned to, especially in the current economic climate, where funding is more stringent. If you have been struggling with understanding the different types of loans available for your business size and stage, this is a must-watch/listen.


MORE INFO and VIDEO RECORDING:  www.accountfully.com/podcasts/episode-29-keith-kohler-financing-man

TheFinancing Man Website:  www.financingman.com


• • •


MORE RESOURCES


More CPG Resources:  http://bit.ly/Accountfully_Resources​


Use the power of your inventory to grow your business -

Download The Inventory Handbook:  http://bit.ly/TheInventoryHandbook​

For more small business and CPG- focused resources, visit Accountfully's resources page, where you will find helpful articles, guides, eBooks and more.
• • •
Follow us on social media to take advantage of even more info and news.

Show Notes Transcript Chapter Markers

The Month End provides emerging inventory-based brands real life knowledge in the accounting, finance, and operational world. Our guests are not only similar brand founders and owners, but key stakeholders and contributors to the industry. Each episode provides a glimpse into the vast experience and insight from its guest’s unique backgrounds in a casual, conversational tone.


• • •


In episode twenty-nine, Accountfully's CEO and Partner, Brad Ebenhoeh, sits down with the Financing Man and the vision behind K2 Financing. Keith knows the preparation needed at various stages of business to be best aligned with the correct type of financing based on its goals and vision. Brad and Keith address a number of considerations a small business should be attuned to, especially in the current economic climate, where funding is more stringent. If you have been struggling with understanding the different types of loans available for your business size and stage, this is a must-watch/listen.


MORE INFO and VIDEO RECORDING:  www.accountfully.com/podcasts/episode-29-keith-kohler-financing-man

TheFinancing Man Website:  www.financingman.com


• • •


MORE RESOURCES


More CPG Resources:  http://bit.ly/Accountfully_Resources​


Use the power of your inventory to grow your business -

Download The Inventory Handbook:  http://bit.ly/TheInventoryHandbook​

For more small business and CPG- focused resources, visit Accountfully's resources page, where you will find helpful articles, guides, eBooks and more.
• • •
Follow us on social media to take advantage of even more info and news.

Brad Ebenhoeh:

Welcome to The Month End CPG community check, The Month End will provide emerging CPG brands real life knowledge in the accounting, finance and operational worlds. Our guests will be key stakeholders from those same brands as well as other key contributors in the industry. Welcome to Episode 29 of The Month End podcast excited to have my friend and colleague Keith Kohler on the show today I do and Keith,

Keith Kohler:

I'm doing great, Brad, how are you today?

Brad Ebenhoeh:

Good, really excited about chatting about all things financing, just for the listeners out there, we're actually having a two part podcast here with Keith. And this is part one, we're gonna chat about intro to financing types; what makes sense for the specific business and phase you're in. And on top of that, you know, how the current economic climate is affecting everything, which all of you out there understand that kind of climate, the last six months is different than it's been the last several years. And then the next episode will be probably just action steps of for all small business owners to identify how to get their things in order. Things they can do to keep moving forward, maybe not getting financing now, but getting it in 12 months and just kind of action steps from the conceptual things we'll talk about in the first podcast. So super excited for the chats with Keith, before we get started. Keith's from K2 Financing, and also Financing man.com. He's launched recently. He's got a lot of cool, exciting things going on Keith, tell us about what you're doing. We know your background, who you work with, what you do the whole nine yards for the listeners.

Keith Kohler:

Yeah, great. I appreciate that. Brad, I'm really happy to be here with you today and to be addressing this most important topic for your listening community. And by way of introduction to all of them. Again, it's Keith Kohler here, and I created a brand during the pandemic called Financing Man, and really the core objective of what I do is I help companies at any stage of their development get the right financing at the right time. So that could be a certain product and mix of financings at a certain at one stage of your development, and a very different one at a different stage. And we're gonna go through that today together. And my overall core promise to all of the listeners here all the founders is that I can meet you where you are, and guide you along your financing journey. So the way I do that is I do a strategy call with people called the your financing review call. And I help founders understand what they can qualify for now in terms of financing, and the dependent upon their growth, a path to profitability or not. And the channel mix helped them understand all the different types of products that can be available to them, and how they might sequence them and stack them to have the optimal outcome. And that includes equity, although I'm a specialist in debt and alternative financing. And that's what we're going to go through today. Additional, some additional background, I'm an adviser to several founders in our space, some I've done with several years, some more recently, and I'm a seed and angel investor in a half a dozen companies in the CPG space. I recently expanded into blockchain. And so that's some kind of something new and exciting. And the way I got my start, and our industry, my core competency of CPG was when I was diagnosed celiac, which is gluten intolerant. And that was in January 2005. So that gave me an original strong reason why, to get excited about how can I support founders with financing because when I spoke with gluten free companies, this was traditionally a huge pain point for them, as well as co-manufacturing. But since I knew I could do something immediately in finance, and financing, this is what I chose to do. So, Brad, what I'm going to do, for the benefit of your listeners is talk to them, and share with them my thoughts on what financing could be available to them at different stages of their development. All right, and I have Yeah, and I'm taking them through four and I invite you, Brad, you know, to chat with me and say, you know,"Hey Keith, there are a lot of people in this group or in that group" or, you know, just let's just think about what would be most appropriate and most beneficial to your listeners, the ones who currently work with you and the ones who are probably thinking about working with you and who we can serve

Brad Ebenhoeh:

So just to kind of even set the baseline for together. that I think as we go through this you know, keep in mind are we if you can explain to the listeners, like hey, you know, you should start thinking about this at this level of your business this really Yeah, absolutely. It's level so let's do that as well. And I was just thinking about your intro about the whole celiac situation that you said in '05 like you know in'05, you probably could barely find anything in supermarkets. Now. It's almost probably impossible when you walk to Whole Foods to find anything with gluten. So dramatic changes last year and a 15 year so anyways, which is exciting times in the CPG space and why it's really exciting to be in this kind of very creative industry with a bunch of very fascinating people and fascinating brands. So

Keith Kohler:

Isn't a cool Brad that we get to work with some of the most amazing founders around people who are truly dedicated to be game changing, right? Disruptive in the food industry, helping perhaps charities out having elements of social responsibility, building a better set of food than what we see out there in the big food walls. So it's great to support all of these people in their vision. And we know that what we're doing in our work and financing is one element in supporting that vision and their growth. So yeah, absolutely. So to answer your question, yeah, I'll give you some context in terms of language, and also put some numbers behind, where I usually see those stages tend to tend to come come through. So our first stage is startup in early stage. Right, so this is even pre revenue. For those folks, there might be a couple out there that are just getting the idea going, perhaps even they're launching a new business. And so startup in early stages, the first one, then we move into growth and pre profitability, that can be the longest one, it could have the widest range of revenue amounts and net incomes, we move into breakeven to profitable stage three. And the fourth one is multi year profitability. And when there's over two years of profitability on key for us on a filed tax return. So again, startup and early stage growth and pre profitability breakeven a profitable and multi year profitability, probably most of the folks here are going to find themselves in the growth pre profitability and the breakeven to profitable stage. But we're going to get...

Brad Ebenhoeh:

1, 1.2, a little bit of three. And then, you know, rare, minimal four, I would imagine,

Keith Kohler:

Four is extremely rare, because probably by that time, they've either been sold, or someone else has taken a majority ownership stake in their companies, because that's just a typical path we see in CPG. However, I do see a lot more companies thinking, "No, this is I want this to be mine, this will be a legacy. And this will be an ongoing annuity once I get to be highly profitable". So for some of you, when we talk about startup in early stage, it's going to be new. For some of you, it's going to be a trip down memory lane. And so perhaps this will jog some memory of hopefully pleasant circumstances. But sometimes rats, maybe I could have done it a different way. And a key thing to know is the startup and early stage, financing sources I'm about to share with you, they're good at any stage. And in fact, this just all builds upon each other. So whatever is good in stage one is always applicable at any stage. But what's when I get to stage four, it's only at stage four, you can't go back and say I could do this if this if I was at stage one. Okay, so now let's talk about startup in early stage. And, Brad for us. The first area of financing, I'm sure you see this on your balance sheets all the time of your customers is the founders themselves. So you our listener are the first source of financing. And usually what I see is, there are multiple sources of financing that we ourselves have access to, and I typically see for them. The first one is someone's savings. And a big question for everybody here listening is to think about, well, how much do I do if I have, say $50,000 in savings, there's a certain romanticism to say, I'm going to go all in, I'm going to put it all in, I'm going to put everything on the line. And our media loves that. We see it on Shark Tank, we see it in different parts of our lives. But I would encourage you from a debt financing perspective, to consider not doing all of that, maybe doing a third perhaps as much as I have because down the line having cash on hand and having what's called liquidity is critical for later stage financers to see as memorialized on a personal financial statement. So for savings, yes, that's one area credit cards is another popular one. The most important thing there is to not go too far, so as not to crush your personal credit score. I often see that once you get above say 30% usage that's a break and credit score models such that it lowers credit scores significantly once you go above 30 If you go above 50 Even more so. So be mindful that if you have say $10,000 of availability going above 3,000 could have an issue for you later qualifying for other types of financing specifically term loans and other bank products. Home equity lines of credit are another source. If you do on your own personal residence or even maybe some investment property, you can get a HELOC definitely harder in this environment. And you said Brad about what's different now? Yeah, HELOC are much harder to get those used to be a very widely available source of financing for businesses at this stage. Now it's less so and a lot of banks don't want you to use HELOCs for business purposes. And they might exclude you specifically for that. So before you even go down this path have that honest conversation. Last one. And I do see a lot more of this in more challenging markets is IRAs and 401 K's. Alright. People borrow against some sometimes they liquidate them. And Brad remind me I think the IRS rule again is as long as you put it back within a year, you're fine, right?

Brad Ebenhoeh:

It's something like that. I that's what I think to my tax guy. We have a tax team here that handles all that stuff. So I'm not all up on that. But it's something like that. Yeah, I'm pretty sure that's definitely ask your tax person or a tax person on that aspect.

Keith Kohler:

Yeah please, everyone on this call. Definitely, if you're, if you're considering this, please take a look and speak to your whoever's advising on tax to be sure this, the one thing I know for sure that if you don't put it back, it's going to be treated as income, and you'll have an early withdrawal penalty, and you'll have to pay income tax on it. And that, yes, at one point in my life was me. And in fact, all everything I just mentioned you savings, credit cards, HELOCS in IRAs, and 401 K's I've done them all. I was actually a founder once myself. And this is how I started funding my business.

Brad Ebenhoeh:

Yeah, I love it. A couple of comments on my end. Number one is like I think a big part of this for founders is just are anybody right? Like doing this is you know, personal finance responsibility? Like how good are your personal finances? Like just without your business? Are you keep your credit card payments on time? Are you keeping your balances low? Are you putting money away for savings, all this stuff factors into your mental decision in order to do things of HELOC and 401k. pullouts and leveraging credit cards right and leveraging some of your savings accounts for this aspect. So if you're not good at it personally, before you get into a business, just be very conscious before you do that, in terms of how you're going to leverage that stuff. Because that could really impact your personal life, the rest of you know, the next decade or two. So just be conscious about that.

Keith Kohler:

Yeah, Brad, that's that's an important comment. And just to add to that, I wonder how many times you see this, it's not just they themselves, but if they happen to be in any type of relationship, where they're married, thinking about it, you know, significant other, that person could also have an outsized influence on on whether or not you want to go through with these things. And on the flip side, there could be an adverse effect if things don't go quite well, not just for the relationship, but for the economics of that relationship. Right. So yeah, so certainly, yeah, having your ducks in a row and making sure your personal house is in good order, not just by the numbers, but how you manage and your mindset about at all. If Are you feeling confident and abundant about what you're doing, if you're feeling scarce, or if money frightens you a bit. That's another thing that I invite you to tackle, and to really get honest with yourself about not just how it's going to work in your business, but do I feel comfortable doing all of this?

Brad Ebenhoeh:

Yeah. And one other thing is on the credit card side of things, I've actually seen some clients leverage credit cards and the 0%, you know, for 12 months, and in a very positive manner, where they been able to been very responsible on mapping it out and disciplined in terms of minimizing their costs to keep it going, but leveraging that free 12 months, or 18 months, or six months, whatever you get, whatever your balance is, to fund the company, pay it off, open up another one, things like that, again, that's gonna affect your credit score when you close and open. But at a minimum, this this guy, this client, specifically, like was able to maintain ownership and factor this over the first couple years of his business and play the game, which was very nice. To me, again, this is the whole point of being creative. It is, yeah, all these situations. But there's a ton of opportunities here within it. But you know, again, it goes on to discipline, you know, the, and then moving forward, you know, and executing.

Keith Kohler:

Yeah, and you brought up another point that I just want to make a quick comment on, which is timeframe, right. If you sometimes a lot of us, particularly in our beginning stages, and this was me, at some point in my life is we can have this very short term focus and very narrow outlook. And oh, my God, I need something now. So I'm going to push that button and get that finance and it showed up on my on my email in my inbox and not have any regard for it, but it's going to show up in 24 hours. So who cares? Same thing with your financing, I need this money now. But if you have a longer term perspective, and I think Brad for us, particularly at any stage, sometimes it's hard for people to think of 12 months out, particularly in the early stages, because I don't have the perfect crystal ball that tells us where it's gonna be. But I really would encourage all of you to the degree you can work those projections, update them as frequently as you can. If 12 months is manageable for you mentally, it's really critical to have that much of perspective to have the best outcomes and to think about what you really can do on financing particularly from your own resources. If treatments is a bridge too far, go with bite size and you can handle and maybe I really would say at least six because as you said Brad getting those percent offers on credit cards, you know, some of them are 12 months, some I've seen lower terms. And knowing Okay, great, I'm gonna get this, but I need to know what's next. And how I can pay out pay out of that or qualify for the next stage of financing.

Brad Ebenhoeh:

Absolutely awesome. Love it. What's the next phase?

Keith Kohler:

Yeah so, also part of startup in early stage, there is what's called peer to peer lending. Sometimes we call these personal loans. These are things you've all seen, you've even seen television ads on this, like Lending Tree and Prosper. And others like that, it used to be up to $35,000 Only now, some offer up to $100,000. For all of you out there, I would just Google it, peer to peer lending, you might see good, some good reviews on NerdWallet, about what's available these days. And you can source all of those ones as potential sources of financing, high interest rates, because they're unsecured. So that's what you're going to get. And yet they can be a good source, they're lending to you based on credit score, and then you can use it to go into your business. Alright, so beyond that, friends and family come up. Now we often talk about friends and family just in equity terms. But yeah, this is a big part about how they can invest in your business by giving you money structured in a loan of some type or some type of debt instruments. And normally, this is going to come from your network, it's going to come from advisors, I've been that guy who's been an advisor to companies, and then I wind up being a seed or an angel investor in that company. Family members make this happen. And you know, what's the one I see the least amount, Brad? Is someone's spouse. Because oftentimes, the entrepreneur, the founder, is in a relationship with someone who's quite less risk, t than they are right. So they tend to be the least frequently frequent investors. And yet I still see them show up on balance sheets or on CAP tables. And important thing for all of them is will they do the following? Will they convert to equity, if needed? Because moving them from debt to equity can be significant and important about getting other financing down the line? Can they do more than they originally gave you? So if an aunt and uncle is saying, Hey, I'm going to give you $10,000? So excited for you? An important question understand is, hey, aunt or uncle, if I come back to you again, could you do another 10? Did you do another 20? Having that understanding of what they could look like in a lifetime of support for you is really critical, not just what you need right now? Can they delay their payback? Certainly, if they're giving you a loan, your ideal scenario is paying nothing on it. And that balloon payment over some time. And then the next best is an interest only. The worst one is principal and interest in an amortizing loan. And the last pro tip is will they subordinate to a future lender? Because if they come in there first and someone out for someone else to come in, on top of them, presumably an institution or a FinTech source, those folks would have to subordinate. Absolutely right?

Brad Ebenhoeh:

That could, that could put you in a bind.

Keith Kohler:

It definitely can, especially, because sometimes people invest at one point, and then their conditions change, right, your aunt or uncle who may have given you money, then maybe they have other things they need to be doing. Maybe they have medical bills or family circumstances or they want to buy a house. And that money I gave you I need it now for that. All of those are stories I hear from time to time. We have one more on startup and early stage, community development organizations, and microlenders. And these are often overlooked. Why because they don't do a lot of advertising. They don't tend to show up in founders inboxes. And yet, I would encourage all of you listening to look for these. And what you can do is Google or search, community development organizations microlenders. There's also one called CDFI, when you do development, financial institutions, and then after that put state, but your state of where your businesses, or put your county, or put your city if you live in a large city area, because all of these organizations are usually going to be one serving specific local communities. By geography, a lot of them will support startups, pure startups are super early stage. Many of them are there to serve specific demographics, we've seen a huge proliferation, and a lot of these micro lenders and CDFIs and commune development organizations supporting minority owned businesses and women on businesses. So if that fits your description, I really encourage you to look at these particularly in these earlier stages. And the last thing I'll just say on that is, a lot of times happily, these loans don't have hard underwriting criteria. They're as much focused on someone's character. And character is a huge broadly defined term. The most frequent way people think of character is in terms of credit score. So it points back to what we said, right? If you've gone all in with your savings in your credit card, well, particularly a credit card and you ever unfortunately drops your credit score. It could even threaten you in getting this type of loan at this stage.

Brad Ebenhoeh:

Yep, right. Yep, yep. And definitely you I always think of those those last loans as community development loans, kind of those nonprofit entities that are there to support some sort of mission type, they are very mission driven. Think of it very similar. It's like a college scholarship, right of brilliant, junior senior year high school, research everywhere to try to get some free money. Oh, this one fits me this one doesn't. It's not always about the smartest. So that just kind of gets into, you know, into you guys just, you know, being very resourceful. And looking on Google and internet and shaking hands and seeing if there's some things local, regional, state wise, that can help you.

Keith Kohler:

That's right. Everything we just mentioned, so far, almost all of it can live friendly together. Yep. So you can look at all of those options and do all of them. There may be some rare circumstances, particularly if someone puts a lien on your business assets and what you want not be able to do or restrictive covenants, which say, "Hey, if you if I give you money, you can't get it from anywhere else" that actually shows up a little bit more in the next stage. So let's move to growth and pre profitability. So now we're on stage two, we just covered startup and early stage growth and pre profitability. This is where it starts to get channel specific. So Brad, I wonder when you think of your portfolio of clients, about how many of them have direct to consumer businesses, either they're selling on their own website, or they're selling on Amazon, or Walmart or online, or somewhere like that?

Brad Ebenhoeh:

I would say, basically, every one of them, unless they are, like a frozen entity or frozen packaged goods or something that doesn't travel well, or the the amount of freight, it's just gonna be ridiculously priced. I would say that's probably the, the level of that with that being said, some of them just have a website up and are promoting it, but just to have, so when people go to their website, they can buy it. So there's definitely a lot of them that are focused on it. But um, but they have some sort of level there. There you go.

Keith Kohler:

So I think it's funny when I started work in small business financing, the launch almost always started in natural retail, right? And now we've seen it's almost always now DTC. So for all of you out there, probably nearly 90%, if not more using Shopify. And Shopify has its own financing arm, it shows up in your inbox one day, after you've had some traction, doesn't show up right away, but it will show up. It's interesting in my strategy calls Brad, probably about 10% have taken money from Shopify. Another 50% of said I've seen it, but I delete the email. And another 40% saying, Yeah, I open it, but I'm not really sure what's going on here. And then they kind of say, Okay, I'll think about it another time. And it goes to the bottom of the priority list. So Shopify is going to show up. And usually the price of that is hard to figure out because it's a paid back based on your revenue and your collections. So I can't say I'm the best at figuring out what exactly what the APR is on this, it's not going to be cheap. But if you have a high gross margin, it could be something that really should be a no brainer. But again, Your experience may vary. Indeed, Pay Pal is going to show up if you take Pay Pal on your site, similar type of thing pay back based on collections, Amazon gets more and more interesting. We know Amazon is going to run all of our lives someday. But for now, they've their commitment to lending for founders is gotten stronger. They used to offer just a 12 month term loan. Now they have some interest only options. You can look at Amazon lending, search that and see the options that are open to you. That's also one that just shows up in your inbox someday based on your activity. It's not something you can solicit or apply for. I will say a lot of people I know have used it really strategically. And again, the bigger you get the lower the interest rate. In fact, I see interest rates sub 10%, which is actually the cheapest out there. It's cheaper than SBA loans. It's cheaper than some commercial loans. So it's astonishing what they're able to offer. And then the next thing I'll tell you about are what we call what I call funds. And these are the family offices and non bank lenders. And many of these I call the usual suspects because we see them sponsoring events or at the Expos these are the Dwight's these the assembled brands, private family office in New York Abrams and company, you might say E capital. There are several other at that those were just ones I mentioned that I see most frequently. And they're usually doing traditional underwriting, they're looking at your cash runway they're looking at if you've gotten VC funding, because if you're if you're still not profitable, they want to know that you have a path to getting towards profitability. And this is what you said Brad about. Where have you seen the economy change the tide and the way lenders are operating? This is one of the best examples in a in a really boom market before a lot of these groups had made lower amounts of capital available. So say for your companies that had that were a couple of million in revenue, this could have made sense because they had a certain amount of receivables a certain amount of inventory. Now that's come up a little bit because they want to put more money in play. So it just means that the other options need to be perhaps held on a little bit longer, which I'll talk about in a second. But one thing is this is traditional underwriting, these are not fintechs. These are not algorithms and push button financing, as I sometimes call it. But they are really active funds supported by investors that are active in our space, and probably almost everybody here is aware of those folks. So if you are growing, if you're a couple of million and above, this is one to take a look at. I want to mention this in 30 seconds or less, because it's the nastiest form of financing out there called merchant cash advances. I have to say it's available. But I would just say that's a lender of last resort, because it's super high interest rates, and it's the ones that draw on ACH is out of your account daily or weekly. Again, I'm not trying to criticize the whole industry. And yet, this is the lender of last resort. But if you are in an absolute pinch, you have nowhere else to go, it behooves me to make you make you aware that it exists. But it is something that if you are in a desperate situation, you have to get it please, please, please take the time to think how will you get out of it?

Brad Ebenhoeh:

And also understand the money they take out of your account daily or whatever. Yes, that's right. Because some people we've seen this a lot in our clientele the last several years, as they become more and more known. But some of the situations or the percentages are like what they kick out every day. Like the client, the the owner has no idea even the percentage or what it looks like it we can't even explain it to us to be frank to get us paperwork for us to help with cash flow management or planning. So just be aware of that. And then make sure you understand that. Yeah, absolutely.

Keith Kohler:

And, Tony, have you seen more and more of these response like Tony, Brad, why have you seen more and more of these showing up for you, on your client's balance sheets?

Brad Ebenhoeh:

I feel like less and less the last six months than what it was the last two years. But I'm not involved as much day to day with my clients, as I used to be.

Keith Kohler:

Okay. Yeah, I think. So. I think it's fair to say more of this happened as the result of supply chain disruptions and business shutdowns than it did a slowing economy.

Brad Ebenhoeh:

Yes, yes, yes. 100%.

Keith Kohler:

Yeah, I would say that that's the same as well, because that one was a big shock. A slowing economy was something we've seen happen for the right, a couple more in this space. Purchase order financing, you've probably seen that there are some traditional providers in the space, and there's some FinTech providers as well. It's essentially money, you get to pay your vendors and almost always it's your co man or your co manufacturer, your co packer, whatever you call that person. And these people are wanting to pay them based on the credit worthiness of them. So when you're talking to who's going to produce your product, that's not always an easy discussion. But one thing you could ask is, hey, are how is your credit? Do you have good business credit, because of its lousy, your Pio financing cost is going to go up? not always an easy conversation, because they're more interested in quizzing you and underwriting you about your financials. And yet, I think you get to explore and understand them as much as they do you. They're thinking about your co-packer reliability will happen on a specific time frame. PO financing is not for all of you who do your own manufacturing. And I've seen a lot more self manufacturing these days. And it can't be used for goods that are eventually going to be sold on consignment. So it's not usually going to be in the master channel where we see that most often, often. Next one, factoring, factoring perhaps a lot of people have heard about on this call. And sometimes it's got a bad reputation. And sometimes that's well learned. And that's just because historically, it's pretty expensive, right? It's, but it is something that can help your cash flow. And once again, if you have strong gross margins, you might say, okay, great, given the choice between me putting in money or raising equity, factoring is something I'll still stomach although hopefully, someday I'll graduate out into a lower cost of capital. So how does this work? So Brad, let's say you had your company and you're selling to pick a retailer you love by the way.

Brad Ebenhoeh:

So Whole Foods for this conversation.

Keith Kohler:

Okay? So let's say it's Whole Foods, right? So you're going to be selling actually to UNFI, to the distributor, right? So let's say you have a purchase order that you got you had it made, and then the factory it's about to leave your factory is going to be shipped to unify warehouse. Well, once you issue that receivable, that becomes an opportunity to factor that receivable. And let's say UNFI is going to pay you in 30 days. Right? And let's call it a numerical example. It says a$10,000 invoice. So if you do nothing on day one, it's $0 on day 30, you get $10,000 Well minus deductions. But that's its own rabbit hole to go down, right? So we're not going to get into that, that's a whole other thing. But if you factor that receivable, what it'll be is you'll get some type of amount of money coming in, depending upon your dilution, how much trade expense you're expected to have historically. And that gets accomplished when they do their diligence. Let's call it an 80%. Advance. So on day one, you get$8,000. When the money is finally collected, you get the

other $2,000:

8 plus two equals 10. Minus the factoring fee, the expense of the financing during that 30 day period. Right to keep it simple one, if it's a 1%, for 30 day period, which would be remarkable to get, it's more like a 1.5 these days or higher, let's call it 1.5, you would pay $150. So net off of that invoice, you get $9,850 by doing it that way versus 10,000 doing nothing. All right, factoring for some people, they get anxiety because that payment goes to a lockbox. In other words, it's not collected by them, it goes somewhere else. That's sometimes hard for people to get over. It just means I would encourage you to consider it if it's if it's a viable financing source for you and not dismiss it because of a lockbox because customers are used to paying third party sources really. It's just a little hard. And it's changing your systems. And that can be uncomfortable when we get that.

Brad Ebenhoeh:

And when you're saying just for the listeners, like when you're saying 1%, one and a half percent, that seems really low. But again, that's for a 30 day period,

Keith Kohler:

that's a 30 day period,

Brad Ebenhoeh:

multiply that times twelve to get to get the up. So at 1% You're talking 12% at one and a half, you got an 18% APR in terms of mental terms of the interest rate.

Keith Kohler:

Yeah, that's right. And for all you today, given where we are in this interest rate environment, it's more like 18 to 24. It's more like at 1.5 to 2. 12 to 18 was a year ago, I'd seen that. The next one is FinTech. These are the companies we see largely at our expos and at our shows, and that are very active marketers. Because their cost of acquisition is mainly happened by being active on those platforms, right. And they're showing up again and again and again in founders inboxes. And these are all the names we know. And it's a wide variety of products. Some of them are looking at doing purchase order financing, some of them are doing receivable, some are doing inventory, some are doing accounts payable, really all along the cash conversion cycle and everywhere along the supply chain, there's a FinTech option. The key thing for all of you is knowing what everybody does, and wondering, can they play nice together? Could you do one on the PO side and one on the AR and inventory side is every going to be everybody going to be okay? An advantage of FinTech is the funding tends to be faster than the traditional sources, but the rates are going to be higher. And one thing I really encourage all of you to think is a lot of FinTechs are algorithm based. They're based on specific proprietary formula. And really, please in your conversations you have with them dig deep to understand how does this algorithm really work? How will my financing availability change over time? Because unfortunately, we've seen lots of circumstances where from one day, the next people's availability is cut off, and it puts them in absolute cashflow hell. Personally, I've seen that in at least a dozen companies I've spoken with. And it's an incredibly unpleasant. Dare I say algorithms can't replace relationships. So it's please–to the degree you can, have a relationship with an account manager or others so that you truly understand what you're signing up for. Because the upside can be wonderful. It's all great when things are going well. But even if you have a hiccup, or a spiky time in sales, or much lower revenue than you anticipated, it can be a really nasty surprise. And Brad, I'm sure you've seen that right?

Brad Ebenhoeh:

1,000% You can get the rug pulled out on ya on a Thursday when you're just not expecting it. So I think that whole aspect is like kind of a key thing to understanding it. And at the end of the day, nothing ever is going to replace relationships and having somebody to call I think so yep. Even like when you bake your relationship when PPP happened after COVID Like you have somebody to chat with or email with everything executed a lot faster. So when you're signing up with through a website, just computer without talking anybody understand if things go awry, you have no idea who to talk to, and that's not a good place to be in.

Keith Kohler:

So for all of you out there, FinTech can be sexier it can be faster. Please consider putting in the mix the traditional sources as well so you have broader perspective and you get you get an understanding about what you can do. And honestly, if you really dedicate your adult self to making financing a priority, not just a reactive type of exercise, and you prioritize it in your business, you will have the time to look at all of these and make the best decision for yourself. I'll do a couple more Really quick, Brad, because I see these risks less frequently. But I want to mention them. Equipment Financing can be available for pre profitable companies. It's usually from private funds. But they again are going to look for Do you have a cash runway to profitability? Usually these are for venture backed companies that are on high run rates. But private sources can be available for equipment because otherwise you to get it from a bank or vendor finance, you'd have to have multi-year profitability, and usually a lot more time in business. I wonder, Brad, have you ever seen revenue-based financing show up?

Brad Ebenhoeh:

I feel like I'm seeing starting to see it more and more, or kind of creative kind of conversations around that. Which is great, because I think it's opportunity but

Keith Kohler:

Yeah, I do too. And I just had one new client, expand on it. show me something that showed up for them off of a website, and it was fascinating to see. So revenue based financing is usually done by funds that specialize in this, I can tell you, it's not easy to find online. It's not like they're hanging around our industry and showing up at trade shows either. But if you can ask around and learn a little bit about this, it could be a consideration for you. So the way this works is you have a loan that's paid back over time, based upon revenue coming in, it's kind of like what we talked about in DTC with with PayPal, and Shopify. And so you pay this off over time until a specific return is made for the lender, right? So it can be if your principal, say $100,000, you might have a 12 month repayment, and by the time you're done, maybe you pay 125,000, whatever that is. So a lot of that is based on what your future earnings are going to be sorry, what your future revenue is going to be not your earnings. And the specific risk profile that someone assesses for you. This, again, like you said, it's an emerging case, it's pretty, it's not one size fits all. And yet if you do have strong revenue growth, even if you're burning, but if you're going to narrow that burn, and you have a sight line to profitability, if you're not getting love and attention somewhere else, this is something you can consider as well. Last one, I promise in growth and pre profitability, because this has come up a lot is venture debt. And I wonder, Brad, if you've seen a few of these too, right?

Brad Ebenhoeh:

Definitely, definitely. Yes.

Keith Kohler:

Yeah. And do you find that it's usually structured by the current shareholders and the current people on the CAP table that structure of venture debt? Or is it usually brought in from someone else?

Brad Ebenhoeh:

Usually brought in for some somewhere else that I've seen.

Keith Kohler:

Yeah, I agree with that. And I'd invite all of you out there that are venture backed, that if you don't want to go out to the market, you could even propose or start a conversation with your current people, investors, "hey, can we do a venture debt deal? In addition to the equity you've already given me?" Why might that be an interesting conversation? Well, in this uncertain market, they might be wanting to mitigate their risk. They might be saying, "hey, fantastic, I love what you've done. We've been great on equity. But I don't want to do more equity, because that's goes outside my formulae or my parameters, or what my LPs are telling me. For those who don't know, an LPs, limited partners, those who invests in the funds, venture debt could be a wonderful way to say "great, let's all mitigate the risk together and have some type of secured position for you, all of you, investors." So like you said, for now, Brad, it's mainly outside sources, but I'd encourage every founder here to have that conversation and just understand if some people would be willing to do it, because that's a lot less hell, you're not talking to millions of providers, you're talking to the home team and the family members who have already supported you. Just like it sounds, that usually term loans. wide variety of terms; could be one year, could be multiple years. And usually what it's meant to do, really is extend the runway between the first round you've raised, whether it's a seed round, or a price round, or a Series A or Series B to the next round. It's meant to extend runway, particularly if things are kind of like, oh, shit, we need more money, or we've got other priorities, or we've got big opportunities to take advantage us. So that was the biggest category we're at, I promise you. So we got the next one breakeven to profitable.

Brad Ebenhoeh:

Yeah, let's get it I think, you know, just kind of recap on that. It's, uh, you know, I'm hopeful that and as part of this, um, you know, we'll definitely be kind of putting more of just probably, like a article or content together that keep an eye on put together, but that I'm gonna lay these out, but I think the biggest industry to understand like, like, wow, you just talked about 10 different things, and you three again, right, so just kind of understanding um, so this is a really good kind of high level intro. So let's move on to the next phase, the breakeven, right?

Keith Kohler:

Breakeven to profitable and so as you said, Brad, you find probably you said you found the most people in area two, right, the one we just went through definitely And then a few break into this stage. And I've seen it more happening post-pandemic, because a lot of founders said, "rats, if you know if I'm not gonna get venture financing, I better find a way to manage a profitable business." And I'm astonished at how many founders did find a way. Now, it's certainly aided and abetted for those of you out there sitting on really fantastic gross margins, it's a lot easier to pivot to profitability to do that, versus those of you who have naturally or lower gross margin categories are ones that are still early stage until you get higher gross margins. But if it's you, if you can move to profitability or have a sightline to it, let's say in the next 12 months, the reward for you is ultimately a lower cost of capital. It's like one full degree lower. What could that mean? It could mean as high as 5,6,7,8 points. So that 20-something percent loan could be a high teens loan or middle teens, in some cases, a single digit, but that's extremely rare in this market now. Anyway, so let's dive in. So asset based lending, and asset based lending, we see a lot of this and it usually is it's a revolving credit line, it's an advance on your accounts receivable. And your inventory, not always on inventory. Some shops only want to do ar, the real, but if when you're interviewing, and you're talking to asset based lenders, and that goes back to the funds we talked about, you really want to get a good sense of what they'll do on inventory, because that can be the difference between hundreds of 1000s of dollars in in availability or not. So I encourage you to really quiz them on what everybody loves AR. That's kind of a fastball down the middle inventories among not more nebulous. So it's not just finished goods inventory. Well, they do in transit inventory. For those of you who are sourcing from China or Europe or anywhere around the world, Africa, South America doesn't matter. If in transit inventory is your thing, if you're if your stuff is if your goods are put on a boat, and there's time, will they advance on that, that can also be hundreds of 1000s of dollars in differences sometimes even be bigger. It's rare, they advance on raw materials. But I think in some select cases they might. So again, the way this works is money goes in and out. It's kind of like having waves in the ocean. When receive goes get issued, you get more availability, when they get paid, the availability comes down. Alright, so that's asset based lending. Now of that subset, there are inventory only lenders. And Brad particularly this is going to be of interest to your specific DTC people who are only ever going to be DTC because they're never going to have AR, but they will build up a ton of inventory. So inventory only lenders, inventory is inherently more risky, just is. And that's because in the downside scenario, it's harder to get rid of it. In AR, it's easy to collect on something that's already been shipped and presumably been sold. So inventory lenders are going to be much higher in total cost super high teens to 20s. Now, but again, a viable option if you have really, really good gross margins to support this. Usually, though, this is another case where the market has changed. A lot of inventory lenders, the traditional ones in this space are looking to do a million dollars or more. So that's going to be for based on net orderly liquidation value along when determined to just say, hey, if they had to get rid of it in a hurry, what would they get for it? Alright, So Brad, that's going to be for people that probably have about 2 million on hand. So these are for your DTC companies that are going to be pretty significant, right? Probably 5 million plus. But that one some of your universe.

Brad Ebenhoeh:

Yeah, one note about that it's having just from an accounting perspective, having an accurate in real time information, inventory counts, quantities valuations, etc. is a big part of sort of, oh, this specifically, right?

Keith Kohler:

No doubt, because when I look at balance sheets, and when I add request information, that's a whole other story. But most common, where lots of folks stumble, is on accounting for inventory. And I know that's a that's an important priority for you in the way you show up in the way you work with your clients. So And yet, if it's not accurately, John, you could be leaving money on the table. Right? Also, the converse is true, having thoughtfully prepared statements with the accurate detail goes a long way towards getting a deal approved in that space. So now we're going to go into the SBA world. And I promised to speed it up a little bit because I don't want to be spending five hours with us. But the SBA lending world is one probably a lot of you have heard about there are different varieties available to you. They're essentially term loans, either 2025 years 25 years is for real estate 10 years or for other uses. Is the uses that are most common are working capital, which all of us are going to need inventory purchases, equipment refinancing, more expensive debt. That's always a big one, or business acquisitions. That's the 10 year stuff. The 25 year stuff is everything real estate construction improvements. It's given by banks and non bank lenders for all of you out there. If you're we know the flight has gone to the big banner banks, the Wells, JP, BofA, fantastic for deposits, not usually as fantastic for lending. Usually, it's the community banks and these non-bank lenders, there are 14 of them nationwide, check them out, they usually have wider credit boxes, meaning more liberal underwriting criteria, that could be great places for you to go is also a very unusually not advertised product called a boat loan. I can certainly help all of you with all of us in effect any of those these financings, as you know, but that's up to $150,000. And its credit score dependent, as dependent upon an outstanding personal credit score. Well, some of you might say a 700 is outstanding. Some of you might say rats, that's not as good as where I've had it. But 700 is your minimum threshold for that it's a scored loan, but that can be up to 150k, based on a last filed tax return of over$500,000. Community advantage loans are out there, they're the same thing as seven A's just a little bit higher priced. And those are for people who may have had difficulties with credit in the past seven as the one I told you about, it's up to$5 million, and go a little higher for real estate purchases. And the 504 product, rarely seen in our space is for those people doing large Real Estate projects. So that's the wide variety out there. Some SBA has a lot of visibility, probably all of us know about especially since idle. But again, this is not idle. These are not the disaster loans. This is the standard seven and others that have always been around to considerations for all of you. The SBA is not the lender. And I'll repeat that the SBA is not the lender because sometimes we think they are. And that misconception has been amplified by the fact that SBA was the lender on the idle side, but they are not the lender on the seventh day. It's the bank itself. And it's essentially their underwriting criteria. And what they do is they have an SOP manual from SBA lending, and that's what they go by, and they get to decide the nuances, the shades of gray between how they will make lending available. The SBA is a guarantor. They provide a guarantor to these lenders to say great if you go out Brad, and for Brad's, what's your favorite product cookies?

Brad Ebenhoeh:

Brownies,

Keith Kohler:

Brad's Brownies, Inc, let's say you're getting a$500,000 SBA loan, and you're using it for working capital inventory. 75% is going to be guaranteed 25% is what the bank has as its own exposure. So a buck 25. Yeah. And the other 75 gets sold on the secondary market. It's an incredibly lucrative profit center for the shops that do SBA lending well, which is why they're willing to do these deals. Okay. The one thing that's happened again, in our market is the process has gotten much longer. It used to be a lot faster. Now, I would tell you, it's up to a six month process. And I would also share with all of you all of the listeners here is usually the delay is on the borrower side. So this is a long process, it's critical to be organized. And usually the bar was the one that is less prepared. But that's how I tried to help and less than the time. personal guarantees. We haven't talked about that yet. It does show up in some of the other lending we've talked about. personal guarantee can sometimes be a stumbling block for all of you and I get it. I'm here to tell you, I get it. Sometimes it's because it's really hard for you because you may have had experiences in the past that were bad. It can sometimes be a scarcity, or a mindset issue that prevents you from doing this also can be a problem or an issue if you're in a relationship with some type because you might be making a personal guarantee and essentially your family is making one. And that's sometimes not an easy conversation to have. Yet, what I can tell you is if you are a profitable business, it's a little bit easier to have that conversation because if you know how to get to profitability, you're less likely to fall underneath that and ever face the risk of a lliquid, a liquidation scenario, but it has to be there because that's what gets you access to this form of financing. Alright. But things on underwriting criteria, minimum credit scores are like 650 to 680 If you've ever had issues on your personal credit, you really need to explain them so if that's you, it's good to get ahead of that if there are issues you need to fix on your credit such as collections or things that are rats, I didn't know that was still there. Well, take a look go on Credit Karma, Credit Sesame go on their websites themselves, download the full credit report. If there's anything in there that's inaccurate, which often happens, particularly if a common name or just something was wrong and"Rats, I didn't know that collection that I paid off 10 years ago is still sitting there." Please take a look and do that. If you have open lawsuits, that's okay as well, as long as they can be explained, but deal killer is actually a divorce, particularly if you don't know what the liability is going to be on the other side of that. And SBA lending is very liberal. If you have $100,000 that you can that you need to pay and payments, you just need to show $115,000: 1.15 ratio in order to qualify for this loan. Just a couple more, Brad and I promise I'm in the homestretch. One area that's grown in the last few years is USDA lending. And, again, rare for folks in our industry. And yet, if any of you are out there thinking of having your own manufacturing, if you want to have your own manufacturing, USDA is a fantastic thing for you to look into. It used to be only for rural communities, it's no longer the case, there are loan programs out there for any geography, particularly if you're going to be doing something in what's called the food supply space. So that's if you want to build the most amazing factory loaded up with equipment, run your own manufacturer, I know that maybe is very few of you get one to make you aware of that. And so that's the break even to profitable space. Perfect. And I'm fine, like should I just dive right in. Let's go. And then class summarize. Yeah, and I'll go back through each one of them. So multi year, profitability is the very last one. And essentially, it's really only one slide in any of my presentations, because it's the loans and lines of credit that you're gonna get from commercial banks. This is when we have a Wells Fargo, Chase, City, all the big banner banks do their very best, because they're going to lend you a few been profitable over several years. And this is when you're gonna get your lowest lowest cost of capital, for probably 99 out of 100 of you on this call, this is not going to be you. Because there can be big reasons why you'd want to continue having higher cost of capital because you might get more availability of funds, versus what you might get at this level. Big, big, big banks don't love high growth companies. They love more steady state with more measured growth. So even they shy away from multi year profitable companies with extremely high growth rates. So, but I wanted to make that available to you, that could be you. But let's do a quick summary. And I'll just rattle these off. So startup in early stage again, it's you it's the peer to peer lending or personal loans, its friends and family. It's coming development organizations or micro lenders, about an early stage, the largest bucket growth and pre profitability, it's the direct to consumer ones. It's the funds I told you about. It's the one I want you to avoid merchant cash advances, PO financing, or purchase order financing, factoring, the FinTech options, equipment, and venture debt. And revenue based financing to break even to profitable, it's acid based lending inventory, the SBA ones and the USDA ones. And we just mentioned multi year profitability, the commercial loans in the commercial lines of credit. So that's your exhaustive summary of what your journey could look like, depending upon how you grow your company and the stages that you pass through. So just to close, and then talk a little bit more about what I'm seeing in the economy, I really think the way to make this work for all of you is make financing a priority for you, not just equity raises. But all of these types of financing, you can do your research, you can spend some time, make sure you're spending time with Brad and his team to really understand your financials, make sure they're timely and accurate, that's going to always serve your well because you'll be ready. And critic more critically than that is understanding your cash requirements. Really knowing going forward on whatever bite size timeframe you can think of makes sense. What's the cash I'm going to need? And what am I going to use it for. And then find the right financing that works for you. And realize that you can qualify for a lower cost of capital at different stages. And don't just think I have to continue to stay with what I have. So that's what I got.

Brad Ebenhoeh:

Love it, love it. Just kind of a couple of points on that, you know, number one is in on the next episode, we're gonna chat more on kind of action items and specific things to put in place for you and your business. So I'm not going to touch on that. But just think of visit the end of the day as a cycle, right? A progress of your businesses, the different phases of your business, you know, me at Accountfully have been around for our business been around for 11 years, it's had probably three different phases, maybe four. And so this is a similar aspect as you kind of go from and just being mentally ready for it. But then the last thing is kind of the the aspect of you know, with what Keith said understanding your cash flow, understand your margins, understand that information just understand like a lot of this in order for you to apply or receive any of this stuff. It's kind of like an interview process, right? Like this person has given you money. They're gonna ask specific questions. I mean, y'all watch Shark Tank

like they're specifically:

what's your margins, how much cash flow, how many months on hand, yada, yada, yada, right? So the more you know about that stuff, the better. So making financing a priority making accounting a priority. Understanding that aspect is going to help all of this situation proactively for your business moving forward, but also, when those uncertain times come up where you have to call your loan rep and say, "Hey, I can't pay you back next month, can we get a 12 month extension because of this?" And that, if you explain why it happened, how are you going to fix it? What it does a cash flow? What does it mean for profitability or breakeven? He's gonna have more comfortability in that and doing that versus you being like, look, I have no idea. I just need money. Like, hopefully I can make it work. Right. So it's just just that whole comprehensive knowledge of what's going on is going to help you.

Keith Kohler:

Yeah, I totally second that, Brad. And I have a concept that I floated around called 15, for finance. And I truly believe that if everybody spends just 15 minutes a day, and maybe not even every day, but reviewing, where's their cash, right? What's their AR what's their AP, the monthly calls with you, I would say, on average, if you can average 15 minutes a day, looking at finance and financing, I think you'll always be well prepared. But when it becomes the last priority, because you don't like it. And if you don't like it, please get help build a fantastic financing team that does love this and can support you and your decision making. So absolutely, I second everything you say and you know, when we look at this uncertain market now more than ever, you're under scrutiny as a founder, there was a time when, dare I say if you had a pulse or a heartbeat, people were ready to give you money. That's not happening anymore. So as you said, Brad, everyone needs to be well prepared. And still, you get to interview them to make sure they're a good fit for you. And that they're providing you the right terms. And please ask thorough and deep questions, make sure you understand really what you're getting into, not just on the sales sheet, or the marketing literature about what your what your terms could be, read those documents that you're signing, loan documents, because there could be clauses or covenants, which make it very difficult for you to either get out of what you're doing, or to do something in addition to what you just signed up for.

Brad Ebenhoeh:

Definitely. And then from an aspect of kind of where we're at today, you know, versus where we're at 12 months ago, you know, keep just kind of what are maybe three to four quick points of just tangible things that people understand. listeners can understand what's different now. And I know you sent you mentioned several of them throughout the chat here, but just kind of summarize kind of the big three to four to five bullet points of yeah, what's changed now from 12 months ago, plus the last several years?

Keith Kohler:

Sure, I'd say the biggest thing is for all of you out there in the startup or early stage, most of you will be having to do more on your own in the you friends and family, whatever, until you get to a higher amount of revenue than before. I would say kind of a general rule, there used to be a lot of financing available, you would say $500,000 in revenue. And factoring is always there if you're in that trade, and DTC is always there. But for you to graduate into the growth to pre profitability branch and get a lot of those people interested, the bar has gotten higher, the bar has gotten higher in terms of revenue you have to have and money you can put through a deal, receivables and inventory you can have, etc In order to qualify for those people. Not all of them. But lots of them, particularly the ones that we see at our trade shows and doing advertising. So I would say in general, the one of the important things in a hard market is the importance of you knowing how you yourself are going to make it if all these other sources just don't want to work with you and has nothing to do with you as a person. It's just you no longer meet their algorithms or criteria. Second thing as you said, Brad, now more than ever, please be prepared to have sometimes hard conversations. And hard conversations can be with your original investors or your original, as you said your uncle who might need to support you a little longer than they thought. Because hey, if financing is less available for it's harder to qualify, those people might need to borrow, you might call on them to want to step up. So it's important to have a good conversation and be honest, say what can you do? Can you do more, you can't do more, I understand. But certainly you don't want to be caught with your head in your hand going back because it can be very uncomfortable conversations. And I've had them myself when I was a founder. I could have been more prepared in the past, but I'm here to kind of heal myself by sharing with you that please be prepared. One other thing is realize that could change. I think we're going to be in this for all of 2023. Realistically, I would say I think 24 could be better. However, what we all know to be true is with the banks and Silicon Valley Bank at all having its anxiety. Eventually that's going to make their way to all the bigger banks and even The SBA lenders. So for those of you in the breakeven to profitable, it's even harder to get those loans, they're higher priced. And that credit box has shrunk and as well, meaning less likely to do more challenging loans, what Can all of you do? The best thing you can do, again, be on top of things, your credit score does matter, a higher credit 700 Credit Score versus a 650 used to be okay. And I would just encourage all of you to think of that longer term horizon, right? What are you going to, what will it take for you to be breakeven to profitable, the focus on that cash runway, and how you're going to get there is more important than ever, particularly for all the working capital lenders.

Brad Ebenhoeh:

Love it, love it. Great information. definitely agree with Keith's kind of point of uncertainty is going to continue clearly with as I was saying, SVB, you know, what was that probably a month ago, three or four weeks ago, and when that all feels like a blur, doesn't it? Yeah, and then, you know, they just recently got bought, or like, First Citizens, other banks have went down. You know, this isn't just a domestic situations, it's global. So a lot of uncertainty there, I think, at the end of the day, you know, and we'll get into next episode of just kind of six to eight to 10 action steps of what you can do, what metrics to focus on, and different things like that, that'll kind of help you with that. But just be aware that this isn't like it was and, you know, get as much knowledge as possible, get as much help as possible. But I think at the end of the day, you know, knowing this information is number one, and then actually implementing and executing, whether it's that 15 minutes a day, and whether it's an hour a week, or whatever it is to help facilitate that stuff. So having said, this has been great. Any last words and this information, Keith?

Keith Kohler:

Yeah, all of that, Brad. And I would also say, allow yourself to feel supported by this, right, you don't have to do this all by yourself. I'm certainly a resource. Brad and his team are a resource other people on your financing team internally or externally, you know, this is I think, really now more than ever a team effort and having that alignment about what you're doing and why you want to do it and why you would pursue certain financing options or not. Now more than ever, when you're making these decisions in an uncertain market, I think it feels terrific to feel supported, and know that people are aligned in the strategies you want to pursue. So I want to make that little bit of a mindset comment to accompany all the academic comments we've made on this on this podcast today. So thank you

Brad Ebenhoeh:

love it. All right, Keith Kohler with all the information again you can find Keith where at Keith? Financingman.com?

Keith Kohler:

financing man.com K2 financing was my legacy site, financing man is a little bit newer. And then if you want to go through what could be your individual case and what your journey could look like, please reach out to me and schedule a call at yourfinancingreview.com and you will get a custom strategy of your own perhaps just covering many of these that we covered today. Perhaps just a few cards to say but once you get that call that's what you'll leave with

Brad Ebenhoeh:

awesome awesome awesome again Keith you rock we'll be having another next podcast will be kinda more action items I'm assuming to be a lot shorter but this baseline information is needed for you. Share it far and wide. Bookmark it. I think this is probably the most knowledgeable, important podcast I'd probably be done with this just because of the information there, we'll follow up with more information and hope you enjoyed it again. Keith Kohlechatr your financing man financingman.com Get you financing. Enjoyed the chat on the month end podcast. Check it out and share it far and wide. Thanks again guys.

Keith Kohler:

Thank you all

Typical types of companies Keith works with
Startup and Early Stage Financing
Disclaimers for mixing personal with business finance choices
Ways a client has used a 0% intro credit offer intelligently
How time frame and planning need to be addressed for the best outcome
Startup and Early Stage: Peer-toPeer lending
Friends and Family
One to consider: CDFI - Community Funding
Shopify, Amazon, and PayPal Loans
Cautions surrounding these loans
Purchase Order Financing
FinTech Options - the good, bad and hellacious
Revenue based financing
Why you should open up the conversation of Venture Backed debt with your V/Cs
Next phase: Breakeven to Profitable
Asset based lending