American Finance Solutions was recently featured on forbes.com. Here is an excerpt of the article:
Private equity firm, CapFin Partners is buying a significant stake in American Finance Solutions, an alternative lender to small businesses. While they won’t reveal the exact investment amount, the deal means American Finance Solutions will be able to deploy an additional $200 million over the next 18 months.
It’s further proof that alternative lenders are fast-filling the hole left by banks. “There are a number of reasons why traditional banks still have their vaults of cash shut to small business owners,” says CEO American Finance Solutions CEO Scott Griest. “First the transaction size is generally too small to generate enough income for the bank to process through their systems, second the banks don’t have the expertise to evaluate and measure the risk parameters of small businesses and lastly they focus on the assets and credit scores and not the cash flow of a business.”
Crucially for American Finance Solutions, the CapFin deal means they’ll be able to lend to companies for much longer, as they grow beyond small businesses to become middle market companies with revenues up to $100 million. Previously American Finance Solutions provided financing products from $5,000 to $250,000 for first time clients; with an average contract providing $30,000 in working capital in 3 days in three days or less.
CapFin is also a significant investor in Continental Business Credit, a traditional asset-based lender specializing in manufacturing clients, with loans ranging from $50,000 to $2 million. CapFin plans to widen the portfolio of services offered, which now include merchant cash advances, factoring and asset based loans, through the deal.
“This is an important milestone for AFS; we can now access a greater pool of capital more easily and at a lower cost, which ultimately gets passed down to our customers through lower rates,” Griest elaborated in a press release.
“Alternative lending is just starting to become mainstream and emerging out of its infancy stage,” says Griest. “More traditional lenders are recognizing the importance of offering a full range of products to assist their clients growth and allow them to graduate from a small business up to midsize companies and beyond.”
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