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Trade Capital Company Offers $88 Million as Credit Crunch Remedy for Small Business
Loan program allows start-ups, foreign business and others to prove themselves and establish credit.
LAS VEGAS, NV, Aug 18, 2008 - Amidst tightening of credit resources, small business owners are showing pain. With banks reluctant to lend, only the strongest of credit survive.
Simplified credit scoring is obsolete. Lenders have adopted more extensive underwriting practices. Business owners are denied loans and lines of credit easily had last year. Banks freeze standing lines or credit.
Enter Jonathan Warren and Trade Capital Company. From tiny locations and a dozen employees scattered from Hong Kong to Las Vegas to Stockholm, Warren has quietly orchestrated a financial product touted as the best medicine. $88 Million worth of medicine, thanks to European credit lines.
'Credit Crunch' Turned 'Credit Crutch'
Warren says his firm has $88 million to lend to small businesses, for the sole purpose of holding the funds on deposit. By agreeing to hold the funds on deposit, large sums can be had without credit underwriting.
Why borrow funds just to hold them on deposit? The answer lies with the need for a strong credit report and balance sheet. When a client borrows, Trade Capital reports the data to credit repositories, such as Experian Business Credit. Simultaneously, the deposited proceeds boost the borrower's balance sheet. The combination of the two is the holy grail.
"The loan is secured by its proceeds. Our only credit risk is to the monthly interest payments." Says Warren, "This allows us to issue loans where no one else will."
They appear to be doing that, with loans from $25,000. to $19 million since 1998 and hundreds of borrowers who log on to the the Company's product site at www.creditcaffeine.com, or its main website, www.try.tc. Brisk business has brought the Firm to recently complete its Las Vegas loan servicing and credit reporting center.
"Banks don't want to be the first to lend you the amount you want. Our product gives the client a chance to establish substantial credit without hurting his balance sheet. In fact, his balance sheet may be enhanced by a resulting increase in TSAL (Total of Shareholder Assets and Liabilities)"
Fast Track Back to Credit Availability
The Company offers to post 100% cash collateral with banks which refinance Trade Capital loans. The objective is to fast track s borrower to obtaining substantial bank lines of credit. This leads to referrals from bankers who can't offer lines of credit to otherwise good customers.
"A banker who can't approve financing for an otherwise good customer can refer them to us. We'll lend them the desired amount to hold on deposit. Then we'll post 100% cash collateral with that bank, allowing them to issue a cash-secured line of credit to refinance our loan. As the borrower performs, the bank releases the collateral back to the borrower.
"We're looking for those (applicants)