Over a decade ago, Jason Venturelli was working logistics at a New York-New Jersey container port. There he would regularly encounter fellow blue-collar tradespeople, such as truck drivers or manufacturers, who all seemed to share a similar problem. They needed money but couldn’t secure a loan from traditional banks. Whether it was for high-priced equipment or a new means of transportation. After hearing about this gap in blue-collar financing first-hand, Venturelli decided it was time to do something about it.
Becoming a Voice for the People
In his research, he learned of a startling statistic. Approximately 80 percent of small business loans are rejected. Even if the owner has good credit and has been a long-term client of that very banking institution. So, he established a network of alternative business lenders and started his own commercial financing company, JSV Capital.
For nearly 10 years now, Venturelli has helped find funding for business owners who have struggled to obtain capital for their company. Those less likely to be accepted into traditional business loan programs include anyone with a credit score of 750 or less. Those who work in high-risk industries such as trucking or food and beverage, to name a few. Or, those who have been in operation for under three years.
“If you have revenue, JSV can help you,” explained Venturelli. “We work with all credit scores—anything 500 and up. We approve in 24 hours and fund the same day. In terms of actual time in business, we go as low as six months. You could technically be a start-up.”
JSV extends its financing options to all legal industries, even ones that have found it nearly impossible to secure a traditional bank loan. Venturelli noted the marijuana industry as an example, whether it’s funding for a dispensary or farm.
Offering a Lifeline During Lockdown
It’s no secret that there’s been a rise in small businesses throughout the country, especially over the last year and a half. In 2020, it was found that 99.9 percent of all U.S. businesses are actually small businesses, not corporations. As we enter an even more competitive market post-pandemic, one would assume traditional bank loan opportunities would be more obtainable. However, that hasn’t been the case.
In Venturelli’s experience, banks aren’t willing to take a risk on small businesses. Not to mention one where the owner has less-than-perfect credit. That’s where the secondary market of alternative business lending comes in. This allows owners to borrow money without going through a traditional financial institution. It also forgoes the paperwork and lengthy timeline associated with bank loans.
Lending companies like JSV Capital have seen an uptick since traditional banks can take at least 60 and up to 90 days to provide funding once approved. At JSV, the approval process takes 24 hours and funding is immediately available. They also understand the ebb and flow of sales, whether due to a pandemic or change of season.
“After COVID, our lending institutions recognized the pain that businesses went through with having to shut down because of government sanctions,” said Venturelli. “So, in order to provide funding, JSV Capital assessed the business’s history before the lockdown. That’s how we based our funding. Traditional banks weren’t doing that.”
Through Good and Bad Times
In Venturelli’s eyes, commercial financing companies have the unique opportunity to really step in and help people who have nowhere else to turn. However, to dispel yet another misconception, business lending is not just for people who are in dire need. It’s also for businesses that are looking to grow.
Venturelli explained, “I always tell people that in a good economy when business is thriving, they need money. Why? Because they want to expand, but they need capital. Maybe they don’t want to use their current capital because that’s all they have. So, they come to us and borrow money for inventory, payroll, equipment, staffing, new property.”
The Future of Alternative Business Lending
Due to the massive size of the secondary lending industry—estimated at $300 billion—it would be correct to assume that we’ll see more of a demand for alt lending in the future. In addition, compared to traditional banks, underserved businesses are finding more success with the looser regulations and more efficient processes of alternative lending companies.
“I always tell small business owners to go down to their local bank and learn the loan process. When they find out all the red tape they have to go through and the length of time they have to wait, and there’s still a chance they get rejected, remember that there are companies such as JSV Capital that can put you in the position to get a business loan.”