Making Sense of Your Small Business Loan Offer from InterNex
As an online alternative lender, InterNex Capital does things differently when it comes to giving small and midsize business owners a revolving line of credit. For the 3rd part of our series on working with InterNex, we cover how to make sense of their offer.
You Got the Offer—Now What?
InterNex Capital is a collateralized asset-based online lender, and through them business owners can receive access to a revolving line of credit. Here we’ll discuss how the offer is extended, how it can be used, how to pay it back, and how to continue using it going forward.
An offer doesn’t come out of nowhere, of course: Small and mid-sized business owners, looking for a line of credit that ranges from $250,000-$5,000,000, must apply either directly through InterNex or with the help of a strategic partner. You can learn more about that in part 1 of our series.
Then comes underwriting, when a dedicated analyst is assigned an application and reviews everything from the health of the business to the health of your business’ clients. Because InterNex is asset-based and lends against accounts receivable, applicants need to have a healthy and diversified clientele. The underwriter makes a decision within 24 hours, and then submits the application to the credit authority for a final decision. Learn more about this in part 2.
Which brings us to receiving an offer from InterNex. Here’s how that works:
How do I receive an offer from InterNex?
Once the loan is approved and all the paperwork is signed, you receive a welcome email that contains your portal login information so that you can access the funds you’ve secured. It’s that simple. Every line of credit is different, including the range and terms (see below for more).
Everything is done electronically: You can manage and draw your funds online from the portal. The portal also easily integrates to QuickBooks or any other accounting system you use so that you can manage you invoices and the loan in an all-in-one access point.
The funds that borrowers draw go directly into the business bank account that was set up during the application process.
What are the terms and fees of the line of credit?
Each line of credit from InterNex is paid back on a 12-month term, with interest rates ranging from 8% to 18%.
Other fees include: an origination fee at closing, and a minimal draw fee with line usage (this fee depends on the terms InterNex sets up with you, but it is annualized to around an additional 1%). There is also an unused line fee if at least 50 percent of the line isn’t drawn upon.
On the other hand, there are no due diligence fees, and there are no penalties for early payment. If you are unexpectedly paid back early by a client, you can turn that invoice right around and pay InterNex back before your 12-month facility is up.
How do I pay back and re-use my line of credit?
You set up an automatic payment schedule through your InterNex portal, so there are no missed payments. You’ll pay back the monthly balance, plus interest.
You can make multiple draws against the same line, and pay them back on separate 12-month schedules. Feel free to draw any amount at any time (up to your credit limit, of course) if the need for a new batch of working capital arises unexpectedly.
What makes InterNex unique in this space?
Lots of online lenders are focused on micro lending, but InterNex Capital looks at the space in another way. They’re an asset-based digital lender that specializes in revolving lines of credit to the lower middle market. And they leverage technology to provide sophisticated working capital financing services to these B2B companies.
“We are providing that short-term working capital financing to the small businesses against their receivables,” says Simrita Singh, Director of Marketing at InterNex. “In the $250,000 to $5,000,000 range, there is a really large gap in the market. The big banks aren’t focused on lines of credit this small. They are focused on much larger deals, so filling this gap is huge for our clients.”
Additionally, InterNex Capital has a strong partnership with process-management company Genpact. This helps InterNex provide customer experience with full transparency to their clients. By combining InterNex’s customer portals and proprietary scoring with Genpact’s digital technology and analytics, InterNex boasts of enhanced underwriting efficiencies and portfolio monitoring.
“We partnered with Genpact—they’ve built a lot of systems for banks for commercial lending, and they helped build our platform. We built this for our clients and for partners to really streamline the asset-based lending space,” Singh says. “We are here to deliver that transparency and real-time visibility.”
There you have it: Applying for, being underwritten by, and receiving an offer from InterNex Capital is about as straightforward as it gets. If you’re a small or mid-sized business owner interested in learning more, hit up their website, www.internexcapital.com, and get in touch with them directly. Not enough working capital is often one of the biggest mistakes new business owners make.
Be better than that—get your hands on some money so you can make more of you own. You can explore more options in the alternative lending space here.
You can contact him at ericgoldschein.com, or on Twitter at @ericgoldschein.
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