Capital Infusions at the Right Moment Can Propel Startups and Early-Stage Businesses to Success

In a Nutshell: Many business owners seek financing to take their companies to the next level. But busy entrepreneurs may not have the time to assess each lending opportunity available to them. Seek Capital helps businesses access funding at terms favorable to borrowers. The company provides its clients with resources to help them position their businesses for long-term success.

Some of the most successful businesses in the world today began from humble beginnings. People have started businesses in their basements, garages, or parents’ homes before developing them into prosperous enterprises.

Entrepreneurs often need more than just a formidable idea for a new product or service to be successful in business. The right infusion of capital at the right time can be the difference between success or failure for a new business venture. But securing capital to finance business operations can be challenging.

Seek Capital links business owners with financing opportunities that suit the needs of their businesses. We spoke with Roy Ferman, Seek Capital’s CEO, to learn more about the company and its unique ability to provide funding to help businesses thrive.

Acquiring financing can be challenging for new businesses that don’t have an established financial history. Ferman shared with us that lenders in the small business space prefer to offer funding to companies that have earned revenue for at least one or two years.

“We looked at the situation business owners were facing and realized there were a lot of businesses out there that nobody wanted to help,” Ferman told us. “We started doing a little bit of research to figure out a way to get these businesses funding. Seek Capital is really all about helping to provide funding and financial services to startups and early-stage business owners who are more or less locked out of the credit markets.”

Though a plethora of lenders are comfortable offering financing to large corporations and publicly traded companies, startups have fewer funding options. Ferman said some individuals exploring the idea of starting their own business understand that their access to credit may be limited. Prospective business owners may even decide to forgo their plans to start a business because they don’t think they can secure the necessary funding.

“The more we can get the word out about what options exist for business owners, whether it be through direct lending or partnerships, the more we can let people know they have somewhere to turn,” Ferman said. “There are loan options available for pre-revenue companies.”

Seek Capital began in 2014 and has approved more than 16,000 funding solutions since then. The company provides financing opportunities to startups and businesses in their early stages. It also assists consumers and small business owners who have excellent credit scores but don’t qualify for certain loan options.

Seek Capital reviews your business credit scores, payment histories, and cash flows when evaluating your application for funding. It also evaluates your personal credit history when your business doesn’t have a significant history of cash flow.

Direct lenders are financial institutions or private groups that provide loans directly to borrowers. Seek Capital isn’t a direct lender — it’s a platform that links loan providers with businesses and consumers seeking financing.  

The company performs a soft credit pull on prospective borrowers to assess their creditworthiness. Soft credit pulls do not affect borrower credit scores.

“We do a soft credit pull across all three credit bureaus, and we’re able to tell which credit cards people are getting approved for and which ones they’re not getting approved for,” Ferman said. “Credit scores are a good indicator of past behavior, and we use them to help us predict a borrower’s future behavior. What’s probably most powerful for a new business owner is that the repayment terms we match them with are incredibly favorable.”

Clients of Seek Capital that receive funding through Seek Capital can access credit lines with terms of 0% interest for the first 12 to 18 months of their balance. Monthly payback is based on the funds used, roughly 2% of the balance they use. So, business owners who’ve used $10,000 of their credit line have a monthly payment of approximately $200.

New business owners can feel overwhelmed at the size and number of bills their company generates. Ferman told us Seek Capital’s credit line terms help business owners who are struggling to keep their expenses low by keeping the monthly payments incredibly low.

Seek Capital matches borrowers with unsecured credit cards with line of credit capability, and most borrowers the company works with have prime or super-prime credit profiles.

“It’s a great option for new businesses because they don’t have to worry about repayments for the first 12 to 18 months they’re with us,” Ferman said. “They won’t have any interest payments at all, and the principal payments are low enough that they don’t cause any financial hardship for borrowers.” 

Underwriting processes help financial services companies assess the level of risk associated with lending. But we know business owners and consumers may not understand a lender’s underwriting practices. Many lenders use in-house underwriting methods and don’t disclose them in language familiar to non-industry insiders.

Seek Capital’s underwriting process employs an algorithm it developed using credit data the company collected over the years. Seek Capital analyzes 250 attributes in its underwriting procedures. Ferman told us companies that have been in business for a long time can access greater funding levels through Seek Capital than new businesses. 

The company also considers a business’s industry when determining how much to lend a loan applicant.

“Every lender has industries they like and don’t like, and lenders usually respond more favorably to business owners who’ve made a big commitment to their business,” Ferman told us. “For example, anyone who owns a cellphone can start a consulting business tomorrow. But someone with the same credit profile who has invested in a lot of equipment for their business is going to be much more appealing to most lenders.”

Seek Capital also provides financing opportunities to professionals, including doctors and accountants. The company considers a borrower’s credit history to inform its opinion of their likelihood to repay a loan. Ferman said business owners and consumers who’ve borrowed — and repaid — significant sums of money are appealing to the company.

Seek Capital doesn’t dismiss borrowers who’ve missed a payment on a prior loan. The company looks at a borrower’s complete payment history before arriving at a lending decision. Seek Capital engages with prospective borrowers to learn more about their credit history when necessary and to understand issues that negatively affect their credit. 

“Sometimes a credit score looks bad even though the person’s real profile is not too bad, and that’s why we have those conversations with our customers,” Ferman said. “We provide a little bit of guidance to our customers to help them structure their credit profile before we go to lenders. We’re not doing credit repair or anything of that nature, but we help borrowers put themselves in position to put their best foot forward.”

Businesses that provide multiple services to their clients are in a better position to help them overcome obstacles and weather changing economic conditions. Seek Capital once solely focused on providing funding to business owners. Ferman said the company sought to be a more valued partner to businesses and altered its mission to align with that desire.

Seek Capital now provides financial services and business resources to small businesses. The company points customers to experts who can help them repair their credit and pay their debts so they can appear more favorable to lenders.

Businesses that engage with Seek Capital don’t pay any upfront fees. They only pay fees to Seek Capital when the company links them with lending opportunities.

“We’re super driven and motivated to get the client as much money as they need,” Ferman told us. “Clients only pay us when they get the money we just helped them to get. Our financial interests are aligned with their interests.”

Business owners can spend a great deal of time assessing the lending options available to them and can feel discouraged when lenders decline their applications for financing, Ferman said. Seek Capital knows which lenders give borrowers the best chance of loan approval.

The company also guides borrowers to apply for loans when certain factors are in their favor. Ferman said Seek Capital’s industry expertise improves the chance a business will receive funding. 

Business owners can also benefit from Seek Capital’s ability to estimate their company’s financing needs. Ferman said business owners don’t always accurately estimate the amount of money required to fund a business project.

“I advise business owners to take the time to do their expense and revenue forecasting for the next twelve months to really understand what they need,” Ferman said. “Sometimes, people don’t need as much as they think they do. We can help them break down those numbers so they have the information they need.”