Zero To A Hundred – Episode 24: The Entrepreneurs’ Guide To Business Lending And Its Best Practices With Edward DeAngelis

Hey, Accelerators! 🚀 This week, we’re diving into the world of business lending with Edward DeAngelis, CEO of Qualifi—a company that has provided over $500 million in credit to business owners. Edward shares expert tips on avoiding common borrowing mistakes, why you should get credit when you don’t need it, and the benefits of working with brokers to secure the best loan terms. Whether you’re looking to fund your growth or consolidate debt, this episode has something for every entrepreneur!

What’s on the Menu:

💼 Common pitfalls borrowers make—and how to avoid them.

🏦 Why brokers often secure better deals than direct lenders.

🔑 The importance of getting credit before you need it.

Why Tune In?

With over 12 years in business finance and decades as a business owner, Edward combines personal experience and industry expertise to help entrepreneurs navigate the lending world confidently. If you’re ready to make smarter borrowing decisions, this episode is packed with actionable advice!

💬 Gem from Edward:

“You can never go wrong by doing what’s best for your client.”

Get in Touch with Edward:

📧 Visit GoQualifi.com or connect with Edward directly on LinkedIn for more insights.

Don’t miss out—hit that subscribe button and let’s take your business from zero to a hundred! 💥

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Watch the episode here

Listen to the podcast here

The Entrepreneurs’ Guide To Business Lending And Its Best Practices With Edward DeAngelis

In our episode, I am very happy to introduce our guest, Eddie DeAngelis, who is the CEO of Qualifi, a business finance platform. He’s been in the business for over twelve years, so he truly is an expert and Qualifi has lent over $500 million in credit to business owners like you. Some of the topics that we are going to cover are the pitfalls that borrowers make, and how to avoid them. Why you should get credit when you do not need credit? Asset-based lending, and why you should not take the first loan that you are offered when shopping for credit online.

BoxFi is the nation’s leading payment consultant providing business growth solutions through payment processing. I’m very excited to share the network I have built over my many years of entrepreneurial career to help you grow your business and become more profitable. Ladies and gentlemen, let’s accelerate together.

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Eddie, thank you so much for joining us on the show.

Jarrod, thank you very much for having me. Appreciate it.

We’re going to have a great conversation around financing for business owners. You’ve got 30 years of experience. You’re going to shed some light on what we may not know and how we actually use financing as a way to catapult our profits in our business. Before we start, I have a question. It’s a new question. You’re the first guest that I’m asking this question to. In your business, do you have a catchphrase or a one-liner that you find yourself always saying to your clients?

A catchphrase. It’s more for internally with our training and our sales team and our funding managers. I have mentioned that the clients and it’s part of who we are in the industry. I love saying you can never go wrong by doing what’s best for the clients. That’s one that’s always sticking to us. That’s kind of like the business model that we’re working on there. I love it. That’s awesome.

Common Pitfalls In Business Financing

That is actually a perfect way for us to segue into some things that I would love to discuss with you today. One of the things that I want to focus since you are so client-focused, let’s talk about some of the common pitfalls that business owners run into when they’re going out for business financing. Just kind of give us the rundown of what they need to look out for or be prepared for when they’re going to get financing for their business.

Common pitfalls, most business owners will start with their local bank. They have money in their bank, they have their bank account, and they’re going to apply with the bank. In today’s world, unfortunately, banks are probably servicing about 15% of all the businesses in the United States. There’s 80 plus percent that are looking to go elsewhere, needing to go elsewhere when they need money when they need it. We call our industry alternative financing, which is pretty much everything outside of conventional banks.

One of the most common pitfalls where we see we’re helping a lot of clients is when clients go out into the open market, in today’s world with technology, they go right online, and type in a small business loan or small business line of credit. What happens is you’re going to see like any Google search, tons of companies coming up. The business owners themselves are not in the industry, so they don’t necessarily know who’s who. What type of lending option? What products the lender is offering?

What rate ranges are they servicing? High-risk clients, are they servicing preferred borrowers? What happens is sometimes clients go into the market and they need money quickly. Let’s just say they pull up a lender and I’ll use a name like OnDeck Capital, for example. They’re a big lender, a billion-dollar company potentially. OnDeck Capital has 1 or 2 products, but they’re servicing one part of the market. It’s one product. Typically, their interest rates are in the middle range, what we call standard, not necessarily preferred, and not necessarily high risk.

If a business owner doesn’t know and they just go to, let’s just say, OnDeck or any other type of lender, there may be so many other options that are more suited for their needs. Number one, it could be a lower interest rate, it could be a longer term, it could be a better product. There’s a lot to be said about finding not necessarily just the best interest rate, but the best product for the client.

You leaned into interest rates and I actually want to keep going on that because I’ve been in the position years ago where I got a loan and I thought my interest rate was X, but then after all of the different servicing fees and X, Y, and Z, it ended up being bigger. How do the business owners, because our readers are entrepreneurs and business owners who are operating successful businesses, how do they really get transparency or clarity on what rates they’re actually paying on the loans?

When you say transparency on the rates, I mean, we do an upfront discovery call with our clients. We’ll do it typically over a Zoom call, 20, to 30 minutes, understanding all about the business, their needs, how much they’re looking for, and what they’re using the funds for. We’ll go into asking them some qualifying questions about revenues, profitability, credit, and all those impact items that we talked about on our first call.

We set an expectation right up on the upfront call and give brackets of where we believe that they’re going to fall. In a lot of cases, we’re very accurate. In some cases, something might come up on the back end of underwriting, whether it could be a tax lien or some other debt that the client didn’t disclose to us. That could obviously trigger different rates and different programs. For the most part, once we have a deal approved, we can send out a contract with the total cost breakdown, exactly how much we’re going to be funding, the total payback amount, the payment, whether it’s weekly, monthly, or the total interest rate.

To that point, even further, many states are starting to pass regulations now with what’s called a disclosure that the lenders will send out with the agreement that breaks down all the bullet points, including APR on every single contract. It started with California. Now there are probably 6 or 7 states that are now putting that in play, which also makes it more transparent for business owners to understand the financing a little bit better.

Changes In Business Finance And Consumer Awareness

It was probably eight years ago when I got that loan. It was a line of credit and somehow the rate was fluctuating. If my credit score went down 50 points because I charged up my credit cards one month, my business cards, like it impacted what the rate was and it was off a cocktail. As you’re saying, a lot of the regulations are changing. It’s something that I would like for you to educate the audience about is not just the regulations, but you’ve been in business finance for 30 years now. What changes have taken place and what should the consumers out there today who are looking for loans really be aware of?

Some pitfalls again, the areas where I feel like business owners need to navigate, there are several factors that they want to look at. If they’re going online and they’re going to apply with a lender or a broker, the first thing they should want to understand is are you a direct lender? Are you a broker? There’s a common misconception in just business in general that a lot of clients will come to us and say, “I really want to work through a direct lender, not necessarily a broker.”

They feel like they’re going to be paying more money but in essence, it’s actually almost the complete opposite, because of our resources and the ability to look at all different products. My immediate reaction to them is why in the world would you want to have all your eggs in one basket when we can look at so many different options for you? Whether it’s a line of credit, whether it’s a term loan, whether it’s an SBA loan, or whether we’re consolidating debt.

There are so many options that are available for clients that they may not know about. If you just go out and shop with one direct lender, you’re going to get one offer. If that’s all that lender offers, and typically most direct lenders only offer 1 or 2 products in their niche. They typically don’t have a whole suite of products. That’s where we come in and provide a lot of value, a lot of transparency into what’s out there and how we help our clients.

I will say that in the lending world, I absolutely advocate for a broker because that’s where I’ve always gotten the best rates. I’ve also found that when you’re working with a good broker, not necessarily just a direct lender and it’s not excluding direct lenders, but when you’re working with a broker, they can help negotiate better rates for you or better terms for you by saying, “X, Y, Z Bank gave me this. What is the best that you can do for this particular borrower?” That’s been my experience, or at least that’s what has been communicated to me. I felt like the broker was really actually getting me a far better deal than what I would have been able to get when I was going direct.

That’s a great point. It’s so true. Again, as you said, we work with several lenders and when we do have offers, we do have them compete for the offer. In a lot of cases, a client may be looking for a specific rate or a longer term to keep their payments down or more money. With the approvals that we have for our clients, we were able to leverage them when we’re going back to other vendors and asking for, “Here’s what we need to do to get the deal done.” In a lot of cases, those existing approvals, we are able to leverage them to get them better deals. Like you’re saying for sure.

Types Of Business Financing Products

Let’s talk about the types of products that you have when you’re going out for a borrower. You have everything from lines of credit to SBA loans. Give me what your core product is and what you typically see most businesses coming into you for and what you actually put them in. Like how do you determine which one is going to be best for you?

It’s a great question. Over the last couple of years, the market really shifted on the alternative side where we didn’t have as many options as we do today when it comes to lines of credit. If you go back to 2017, and 2018, everything out there was outside of the hard assets, like not talking about equipment and accounts, receivable financing, which is regular cash flow loans. Everything was like short-term term loans, 12, 18, 24 months.

Over the last few years, we’ve had lines of credit lenders that came into the space offering a line of credit products that can fund and will subordinate to conventional bank financing, which means that just means they’ll sit behind, they won’t require them to pay off their existing bank line if they have one in place. Ever since we started offering all these different lines of credit products, almost 70% of our business is around lines of credit. The reason behind that is that business owners love having the flexibility paying interest only when they need to borrow the funds.

If they want to pay it off in three weeks, they only pay three weeks worth of interest. If they want to use the money for a couple of months, bridging their accounts receivable, they’re only paying interest for a few months. In those scenarios, the line of credit gives a lot more flexibility than just taking out a straight-term loan or an SBA loan where as soon as you take that money, you have to take it all upfront. You’re tied to that term, whether it’s an SBA loan over ten years, or it’s just a regular 3, 5, or 7-year term loan product. Lines of credit provide so much more flexibility and it’s almost 70% of our business are different forms of line of credit.

Is there any other nuance other than being able to draw on payback as you wish with the line of credit from a traditional loan like an SBA loan?

That’s a great question. The biggest difference between most of our lines of credit and a conventional bank line, with conventional bank lines of credit, you are only paying interest, your payments. Your payments are going to be very low. There are definitely some pros to that. You’re only paying interest, so you have very low payments. You can also look at it as you’re not chipping away at the principal, so you’re just paying interest forever.

The main difference between the lines of credit that we offer is most of them are interest and principles. They’re tied to a specific term. However, the more qualified the borrowers are, like they have good credit, a good time in business, decent industry type. The better the borrower scores, the longest term that will be attached to their line of credit when they draw funds. We typically see approvals anywhere from six months to as far out as three years is the maximum.

What that means is let’s just say you take a $25,000 or a $50,000 draw today, if you’re approved for a 36-month term, those payments will be amortized over 36 months where you’re chipping away at principal and interest with each payment. It still functions just like a bank line where you can pay it off at any time without penalty. If you pay it off in a month, you only pay interest for a month.

Just reiterate, how long does that credit line last? How long do you have?

As long as the client is making payments and doesn’t start bouncing payments and defaults and the lenders want to keep the clients with them. It doesn’t necessarily expire in one year. A lot of bank lines, they’ll come up for renewal and do a whole collect tax returns, and financials. We haven’t really had any lines ever closed out due to an expiration date. As long as the clients are doing well and they’re making their payments and nothing drastically changes in the business model where their revenue is completely dropped in half or something dramatically with credit, there are typically no issues keeping those lines open.

Qualifying For A Line Of Credit

Let’s say I’m coming into, Eddie, and I’m going to talk to him about setting up a credit line as a business owner. What am I bringing to the table that’s going to help you get me approved for the best rate, the best term? How do I present myself well to you?

Great question. To secure approval, we would have the discovery call first, see if it’s a good fit, and see what you qualify for, assuming that you are qualified. For one of our better lines of credit, they look for 650 minimum personal credit. They want to see at least 2 to 3 years or better time in business. Typically over $15,000 a month in annual revenue. We could do a small line all the way up to 275 for the better lines, and 500K for what we would call our medium-risk line of credit. We could go up much higher than that on asset baselines all the way into the millions.

On the credit and cash flow driven line of credit, our best product, like we talked about, we need six months of bank statements and applications that we would send to our client through DocuSign. That’s all we need on the front end to get it approved. Depending on how much it gets approved for, sometimes they’ll ask for a tax return on the back end or maybe current year date financials. In many cases, we don’t even need the tax return of financials if the file score is well enough.

Let’s talk about some of those key elements. Let’s say you’re a business and you’re showing a loss, but you’re making money. How do you get qualified when you’re showing a loss?

That’s a great question. some of our vendors are very keen on profitability. They do want to see profitability on anything above, I’d say $250,000 on our credit and cashflow-driven line of credit product. If we select a term, typically under 24 months, they don’t even ask for tax returns or financials, unless they need to prove ownership. Sometimes we could just get away with the K-1 page from the tax return if ownership don’t check out on their business credit reports and such they look at. Typically we don’t necessarily need to look at tax returns to get the lines of credit. We’ve done hundreds of deals in the past where they’re not showing profitability and funded tons of money.

Even for a business owner who’s looking for maybe an inventory loan and you go for a line of credit, it might be only for 24 months. What’s important is that can help you get the inventory that you need to drive more sales. Going out and getting even a smaller line of credit for a shorter period of time can really help your business grow. It’s key to hone into all of these different aspects. If you’re a business that is trying to get to the next level, you’re not showing profitability, but you’ve got good cashflow, and a line of credit may be an option for you.

As I said, it’s all really dependent on every business having different needs. Some of them are secure and big contracts if they’re in the construction industry, they just got a $2 million bid that they won and they need money for materials, labor, manpower, everything, time and materials, all that stuff adds up. A lot of times they can use a line of credit, bring that on, and then once the payments start coming in from the job and the project, they could pay the line down at any time and save on that interest.

There are a lot of other products out there that business owners need to be aware of. For example, there’s inventory and accounts receivable financing. For clients that are selling B2B, we could typically lend up to 90% of their current accounts receivable, money that’s owed to them on the street. That’s an asset-based line of credit, that starts at prime plus one, the best interest rates in the industry that are outside of conventional banks. Now those rates are cheaper because it’s fully collateralized line by the accounts receivable.

For business owners that are selling into retail and receive large purchase orders, there’s purchase order financing that’s available in the market. They’re typically reserved for larger transactions north of $250,000 and above, but there are so many different options out there. There’s a lot of clients that come to us that have a lot of existing debt and they got a lot of short-term financing and they’re looking for some relief to lower their payments. We have some consolidation term loans that go out to seven years that we could fund in less than a week.

For that particular product, they do look at profitability though, so if they’re showing big losses, that one wouldn’t be a good fit. We have others. We could do cash-out refi on real estate up to 30-year fixed terms or an interest rate starting at prime. There are so many different options, but it’s really all geared mainly driven by what the client’s needs are. That’s what takes us in the direction. It’s really important to say that because the client’s need and what they’re trying to accomplish really dictates what’s going to work best for them.

One thing I want to clarify on the asset-based line of credit, you mentioned inventory and I want to make sure I’m hearing this correctly. Do inventory accounts receivable or purchase orders, do they count as assets to borrow against?

Inventory and accounts receivable. Accounts receivable is like the number one asset that a business has because it’s the quickest to convert to cash if there’s an event of a default. Thousands of asset-based lenders are lending on the accounts receivable, including conventional banks typically with 80% to 90% advance rate. What that means is, let’s say you have $5 million in AR that’s owed to your company, we could potentially give you a $4 million-plus line of credit. Inventory is another component. It’s another what we call a secondary asset.

If someone has accounts receivables and inventory, the inventory just adds more to the line. They typically will lend 50% to 70% of the order of liquidation value so that would add more to the line. Now some clients sell e-commerce. They don’t have accounts receivable because they’re selling everything on Amazon and such. We have inventory-only lines of credit and we also have an e-commerce line of credit. That’s totally on collateral. There are so many different options out there in the market. That’s why we do that in-depth discovery call to see what’s going to be the best fit and go down.

Let’s do a real-time example. Let’s say I’m a restaurant and I have two locations and I’m at a place where I need to replace my equipment. I’ve got pretty decent credit and we’ve got good cash flow. How does a restaurant qualify for a line of credit?

That’s a great question. Now, because you said equipment, and this is an area where a lot of business owners don’t even realize it. We talk to them all the time that say, when we ask them about, “Do you have any equipment needs upcoming?” They’re like, “We just spent $150,000 on all this restaurant equipment.” We’re like, “Did you finance?” They’re like, “No. We just paid for it in cash.” I’m like, “Do you realize that we could have financed that for you 100% financing? You didn’t have to drain out your operating cash flow, which is king.”

We all know that. 100% financing with single-digit interest rates. In that instance, we would offer both options. I would say to you, “Jarrod, how much is the equipment that you’re looking to purchase? Here are your options. We could do a quick and easy line of credit that would be typically starting at 1% a month and we could also look at equipment financing if you just want to do it on a 5 or 6-year term at single-digit interest rates.”

The equipment finance would actually be cheaper. It’ll be a lower interest rate and it’ll be over 60 or 72 months, which gives the client an extremely much lower payment. If they’re looking for a much lower monthly payment versus just using the line of credit that might be capped at 12, 24, or 36 months. That’s where we would offer both options and let the client make the best decision on behalf of your business and what your needs are.

Underwriting Process And Business Vs. Personal Credit

Let’s talk a little bit about the underwriting process. You touched on this a bit when you were explaining how to underwrite a line of credit. I’d like to understand how to prepare as a business owner to make sure that we get the line of credit or the loan that we desire but also dive into the difference between, and I know these are two different things, the difference between business credit and personal credit and how they impact you qualifying for a loan.

Very important to note. Let’s talk about the qualifications for the line of credit first. Things that they’re looking at are number one, we always say that we call them peanut butter and jelly in our space. They go together like peanut butter and jelly. Your revenues, meaning your total deposits that you’re depositing into the bank which is very important. Your total deposit amount is going to kind of determine what type of line of credit dollar amount you can be approved for.

They’re looking at your total revenues, and how much you deposit each month. They’re also looking at your average daily bank balances. A lot of business owners don’t know this. You could be doing half a million dollars a month in deposits and you’re paying all your bills and there’s nothing wrong with taking all the money out of your account and leaving $500 or $1,000 in the bank. Lenders are looking at that bank balance and they’re using that as an affordability measure.

A business owner who has $500,000 a month in deposits and has 50 to $100,000 in his bank at all times is going to look so much more attractive than a business owner who may not be doing anything wrong. He knows his checks are covered, and he’s paying all his bills, but there’s only $800 left in his account.

That file is going to look so much more of a higher risk because it looks like his overhead is pretty much eating up all his cash flow. The average daily bank balance is I like to say that a safe measurement is you want to keep at least 5% to 10% of whatever you’re depositing a month as your bank balance. If you’re able to afford to do that, if you’re depositing $20,000 a month, try to keep $2,000 or more in the account, so 5% to 10%.

What is the look-back period for a lender? Let’s say somebody has been taking everything out of their account every single month because they need to pay X, Y, and Z. If they decide, “I need to get a line of credit. I need to get a loan.” How far back is the lender going to look?

Typically 3 to 6 months is what’s most important because that’s the most recent.

Making sure for the last 3 to 6 months, you’re meeting the criteria of having that higher average.

They may be able to help with three months, but if this particular lender requires six months and the last three are much lower, it’s of course, it’s going to show a better trend. It may get approved, but they do want to see that consistency. Six months would be preferred.

What are some of the other factors that you really need to make sure that are in order?

Another one that’s very underrated is that most business owners don’t know. Again, it’s no fault to the industries that they’re in, but a lot of lenders will look at the number of deposits, the frequency, meaning let’s say you’re a small contractor. Me and you have Eddie and Jarrod’s construction company. We’re doing a kitchen addition and we’re just a small company. We do like one job a month. If they give us a deposit, we have one deposit a month. That’s considered very high risk if they only see one or two deposits a month.

Simply being that what happens if Eddie and Jarrod screw up that job and they don’t get paid. It looks like it’s one customer, one business. Now, there are some businesses that may be receiving ten deposits a week, but they’re holding on to them and their bank might be five miles away and only going to the bank once a week or once or twice a month. We would obviously guide them and tell them, “We want to see at least a minimum of two deposits a week.” For most lenders that are looking at those deposits, anything over ten is considered across-the-board good.

The line of credit product that we’re talking about, they recently lowered it down from ten as the minimum per month to eight, and that was a hardcore cut. If you sent me six months of bank statements and one month was showing six deposits, it would immediately get declined for that, as a hard cut for below the required number of deposits. That’s another area that we like to educate our clients, make deposits as frequently and as often as possible.

Required deposits, you said, are roughly two a week, so you need to be making eight a month.

Yes, for our better lines of credit and to qualify for most products. Now we have other lenders that specialize in low-deposit businesses, but of course, it’s a higher risk. The rates are going to be higher. We want to put our business owners in the best position even if they have to go to the bank and make a couple of deposits more, it’s going to pay off them in the long run when it comes to interest rates.

That was going to be my next question. It was going to be a hypothetical question is, could you set up at ABC bank a bank account for your LLC, and then an XYZ account, set up an XYZ account and your other one, and then transfer slowly from ABC to XYZ so you get your deposit account deposit?

I like to work around it, but they’re going to look at it. Most of the vendors, believe it or not, they don’t count transfers as deposits unless they’re verified as deposits. For example, let’s say we have half a million dollars in deposits and there’s a $200,000 transfer. They’re going to scrub that out of their underwriting because that transfer could be coming from their home equity line of credit. It could be coming from their personal bank. They don’t know that that’s revenue unless we prove it. They would ask for an invoice to verify that deposit.

I wouldn’t say the transfers would work. I would just say you could do with today’s technology, you can make, I do it all the time, you can make a mobile deposit on your phone. Even if you have to put in smaller deposits, they just want to see a frequency of deposits because that’s in the underwriting world, businesses that make a couple of deposits a month and defaulting more often than businesses that are making 20, 30, 40, and 100 deposits a month. More transactions, more customers, more business the more stable it looks in an underwriter’s eye.

Talk to me about it obviously, they’re going to pull credit. How do you get to a point as a business owner where you can move away from just being predicated upon your personal credit to them just using your business credit to qualify you for lending?

This is a question that we hear all the time. I have a lot of business owners that just come to us and be like, “Look, I want this to be on my business. I don’t want to personally sign. I don’t want to sign a personal guarantee.” While we do have some products, some loans, and a line of credit product that doesn’t require a personal guarantee, most of the better ones do require a personal guarantee. With regards to the credit though, and this is another misconception, a lot of business owners really, “I’ve been in business 20 years.

I’m doing $10 million a year. I’m making $1 million a year in profit. Why does my personal credit matter?” The simple answer is your personal credit is just as important as your business credit, if not more important. Most of our products that we offer, all have personal credit score minimums. They don’t list business credit score minimums. They list personal credit score minimums because the simple fact is there’s a business, and there’s a person who’s running that business. If the person running that business has 525 credit and they’re not paying their bills and they’re behind on their car payment, behind on their mortgage payment, for whatever reason that their credit is that low, chances are they’re going to get behind on a new loan.

That would be a major factor. Personal credit is basically your creditworthiness. Are you paying your bills? Are you paying your bills on time? How much credit do you have? Do you pay your personal credit cards on time? Business is the other whole aspect of it, your business credit. They’re looking at trade lines. They’re looking at, have you had a credit extended to you in the past. A lot of times we’ll have a customer come to us that might have a 750, 780 personal credit score.

When they actually look at the credit report, there’s like 1 or 2 trade lines and there’s no history of any kind of credit depth. All that stuff comes into play with underwriters, depending on the product, depending on the amount that we’re looking to fund, and how much they dive into the credit but personal credit is extremely important at just as important as the business credit profile.

Getting Credit When You Don’t Need It

One of the things that you said to me in our last call that I thought was really interesting is to get credit when you don’t need it. Walk us through what that means and why a business owner who seemingly doesn’t need credit should go out and get credit.

Very good point. We like to tell business owners who are on the fence about coming and looking for capital, sometimes we’ll get really good approvals. Let’s just say it’s 1% a month and the business owner really doesn’t have a need today. He’s like, “We’re going to hold off. We don’t want to pay the draw fee or the origination fee or whatever fees on the deal. We’re going to hold off and wait until we need it.”

What happens in many of these cases, the business owner will see them come back two or three months later. As you know, when we’re submitting it, we have to get the most recent bank statements and updated banking information. What happens is they wait until they might have a couple of negative days or their bank balances are thinned out to nothing or their revenues dropped.

They may have had a bad month. Maybe it’s a seasonal business. Sometimes the offers are lowered from what we originally got and a lot of times they could be declined. We like to say the best time to apply for financing is when your company looks the best. The most recent, whether it’s financial statements or bank statements, you don’t want to wait until whatever you need the funding for is actually visible and reflected in your statements because that’s going to hurt your approval chances. It could affect how much you get approved for and the terms and conditions of the loan or the line.

That is really a key factor. Get credit when you don’t need it because typically you’re in the best position you could possibly be when you don’t need to be borrowing money.

That’s a big saying in the industry too. They say banks want to lend money when you don’t need it. Of course, everybody wants to lend money when you’re most qualified. Don’t wait until something happens and the shit hits the fan, pardon my French, to apply. We have some CFOs that are very sharp and they can project when there are CFOs out there that do great jobs and they have projections on, “We’re going to need money come December or come January. We have a drop in our AR, that’s a slower month for us, and they’ll project when they’re going to need it.” I’ll say, “We can wait. Let’s apply right before that time comes, in the month before.” As long as it’s not reflected, you’re going to have the best results on your approval.

That’s actually a really something that I didn’t even think about asking you what you just mentioned about CFOs who are looking at their accounts receivable and they say summer months are slow, winter months are slow, whatever it may be, for these 2 or 3 months prior to we should be getting a line of credit. Talk to me, are there other aspects that business owners should be looking at to say, “Let me get ahead of this 3, 6 months and make sure that I have money in place before I actually need it.”

Seasonal businesses are considered high risk simply for that reason, they’re seasonal. I think the best time to apply is right before their busy season. Let’s just say there’s a beautiful restaurant, it’s down at the shore and it starts getting revenues in April, May, and it goes all the way into October. If they come for financing in October, the first thing that lender’s going to do is say, “We need to see the payback months.”

If it comes up in their underwriting that this restaurant’s at a sure point, they’re going to be like, “Are they doing any business from December through March?” They would request the payback months from last year, and if those payback months don’t show any revenue, chances are they’re not going to be able to make loan payments. The best time to apply if your business is going into seasonality is right before the busy season starts because they know that the revenue’s going to be there.

With these seasonal businesses, is it better to get a line of credit or is it better to get a traditional loan?

I guess it really depends on the business need and what they’re using the funds for. We could look at both of those options. If they have a specific need and it could be worked out with a line of credit or a terminal and then it would be whatever the best rate and the lower payment would be in most cases depending on the client’s needs. The idea would be to put both options in front of the client and let them make the decision and help them with any kind of questions.

Subordinate Loans

We like unique spins. We like unique products. We like unique insights and you have a product that I believe is unique, which is your subordinate clone. What the heck is it? Walk us through it. How do you determine as a business owner, if it’s a right fit for you?

I wouldn’t necessarily say it’s unique. It’s not anything that we have any kind of exclusivity on. Subordinate is a big fancy word that means we will fund behind your existing debt. For example, where a conventional bank, they need to be your senior lender, first position, which means if I have any type of business loan that is not with a conventional bank and I go apply at the bank and I get approved, they’re going to require my loan to be paid off. They need to be first-position lien holders on all the business assets in most cases.

When I say subordinated capital, 95% of everything we do is subordinated capital. Customers come to us with bank lines in a lot of cases that are maxed out, they’re growing fast, they went back to the bank, they need more money, the bank says no, they’re at their exposure limit, and then they need more capital to grow. That would be an example of a subordinated position. They may have a bank loan and a loan with Cabbage or American Express and they need more capital, now it’s in like a 2nd, 3rd, or 4th position.

All subordinated means is that we’re subordinating to all your existing debt and not requiring you to pay those off. Most of what we do is subordinated capital. We do have some instances where clients come to us where let’s say they’re in new business and they’re in business a year and a half and they cannot get conventional financing. They have great credit, they have great accounts receivable, good clientele, and they’re doing big revenues. We could do an accounts receivable line of credit where we would be the senior lender in that case. There’s no need to subordinate to any bank because they cannot get bank financing at that point. It’s a small way of saying we could pretty much help almost any situation, regardless of where you are in your debt stack.

Are there loan options for someone who has an operable business, they have good accounts receivable, but personally, they don’t have great credit?

For the exact product that you asked, personal credit is not that important when it comes to accounts receivable financing because they’re basically using your client’s receivables like the invoice that you’re billing. Let’s say you’re selling to Home Depot, for example. We know Home Depot’s paying their bill so even if Jarrod credits 550, we know chances are Home Depot’s paying that invoice once the jobs are completed and it’s due. Your personal credits are not as relevant on an asset-based transaction. It’s more focused on the asset. Your credit matters, but very it’s not nearly as relevant as the receivables in who you’re selling to.

It’s just such an important thing to credit and sometimes can be very frustrating because entrepreneurs are mavericks. They’re renegades. They think outside of the box. They do unconventional things. A lot of them actually just don’t have great credit. Being aware of all these options, I mean, I’ve been there years ago in the days of having bad credit. Now I have really good credit and I protect my credit as much as I possibly can because as a seasoned business owner, I realize how important it is to move the needles.

For me, it’s strictly based around being able to get lending products and loans. As a business owner, make sure that you are keying into keeping your credit buttoned up. Now, with that said, Eddie, are there suggestions that you might have for someone who would like to get a loan and they have a 6 to 12-month trajectory to go out and get a loan, they don’t have great credit. What are some ways in which they can start to correct their credit?

To correct their credit, again, each person’s credit is low could be various different reasons. One of the biggest areas where we see credit scores dropping is when consumers have a lot of credit card debt on their personal side. Of course, it’s easier for you and I to say, “Just pay down all your credit cards to less than 20% utilization, but if you don’t have 20,000, 30,000, or 40,000 hours to do it, unfortunately, that’s not an option for a lot of business owners.

Just so you know, the personal credit cards when you pay if you have cards that are like 50% or more leveraged and you pay them down below 25%, we’ve seen scores shoot up between 50 and 100 points. That’s a really big driver that weighs a lot of people’s scores down. The best you can do is managing to getting those credit cards paid down. In some instances, we can fund if they have good revenues and poor credit.

It may be higher interest rates because of the credit score in shorter terms but we can help them and they use some of that capital to pay down the existing debt and the things that are on your credit that are weighing them down. We can reapply and resubmit when the scores go back up, typically in about a month once the bureaus reflect the new scores. We can apply for something a much better interest rate to be able to consolidate that original loan out.

Trends In Business Lending

Are there any trends right now in the business lending industry that you see happening that our viewers should be aware of that would benefit or harm them?

I think it’s a great time in the industry for us on the alternative financing side, because a lot of lenders, especially coming out of the pandemic. The pandemic pretty much froze a lot of the lending in the country. I know we were pretty much not doing too much during that pandemic time because a lot of business owners couldn’t even open. Lenders weren’t even funded because they cannot get paid back if the businesses cannot conduct business. The industry kind of froze for pretty much almost two years.

There were a few deals getting dumb and not much at all especially restaurants. Restaurants had such a hard time. They weren’t allowed to open for the most part. They were the most focused on an industry that nobody wanted to touch. You have a two-year break like that and then lenders are coming back in and then all of a sudden everybody has to start putting money on the street. They have these credit facilities, they’re paying interest on them.

What we’ve seen over the last, especially the last twelve months now is that all the PPP funding that was available from the government with no interest or 1% interest. That was great for business owners but now that all that seemed to dry up. There’s been a big push in our industry and we’ve seen an influx of applications. What I think is great now, there are so many new lenders and new products that are constantly flooding into the alternative space.

It just opens up so much more options for the business owners and all of these lenders are competing for the same market share. They’re constantly lowering rates to match this one’s rates. They’re constantly going out an extra year term to beat this next lender’s term. We’re constantly on top of that on a daily basis. Any new vendors that are worthy and reputable we’ll immediately sign on with them and start offering their products. It’s just a really good time right now for business owners to look for financing.

Advice For Overwhelmed Business Owners

Even with the things that we covered and the different lending options, it can be very overwhelming for a business owner when they’re starting to look for lending options. Is there any advice that you could give the audience on what they should do to make it less overwhelming to make the right decision?

I’d say the first and most important thing is if you’re going to go online into the alternative market and the bank is not an option, make sure you thoroughly vet the company that you’re speaking to. Look at their website, make sure they have a website, and don’t stop there, because anyone can put up a website. As you know, pretty quickly and easily. Look for reviews, look for how recent their reviews are. Look at the Better Business Bureau. Ask for a couple of references, if they could give you a couple of references of recent fundings.

You should look for some type of trend of the last 12 or 24 months that will at least verify that the business is a good business and they have good reviews and good Better Business Bureau rating. There are a lot of companies out there because the B2B space isn’t so regulated as of yet. The regulations are starting to come into the industry. There are a lot of companies out there that are doing some wild crazy things like any business that’s good and bad in any industry. We’ve seen brokers charge fees in excess of 10% on transactions where there’s an already high interest rate on higher-risk products.

We’ve seen other brokers only offering, not there’s anything of offering one product, but let’s say for example, there is a broker that’s only selling a very high-risk product. Let’s say there are 6 to 7-month high-risk lenders. They’re not necessarily doing anything wrong. They’re providing a service for poor credit but the fact that they’re not necessarily able to serve a preferred borrower, they’re under-servicing a lot of business owners that maybe qualify for much better products. I think that’s where the value of dealing with a reputable broker in the space that knows the lenders, they thoroughly vet the lenders that they work with, they know they’re good products, they’re going to align you with businesses that are doing good business the right way.

Rapid Fire Round

Eddie, so much good content, and so many actionable things that business owners can do. I know that our readers are going to have a ton of takeaways from this, but now let’s get into the silly stuff. We’re going to do the rapid-fire section, you ready?

Before you jump into that, I have to make one correction and I’m so sorry to do this. In the beginning of the show, you said I had 30 years in the finance and industry. I’m 30 years in business, but the last twelve years have been in finance. I just want to be correct for the record. I spent seventeen years in the screen printing and embroidery business as a small business owner. I understand all the pitfalls and struggles that it takes to get a business off the ground and then I’ve been in finance for the last twelve years.

Let’s do fun stuff. Coffee or tea?

I Am a coffee maniac. Although I drank a few cups of tea, but I’m coffee all day long. Coffee’s For Closers.

Coffee’s only for closers. Great movie. It’s a zombie apocalypse. You’ve got to get out of the house and protect your family and friends. What is your weapon of choice?

Since I played baseball forever, I’ll say Louisville slugger. I’m sure there are better weapons to grab.

Is there a favorite movie or streaming series that you’re watching right now that you love?

Yellowstone is definitely my favorite series, especially that just came back along with. I think the new season is five. We just watched the first episode the other day. It’s amazing and movies I’ll say Donnie Briscoe is one of my all-time favorites.

Great book. Great movie. Do you have a book that you recommend our readers of business owners and entrepreneurs read that will help them on their journey?

A couple of books that I first read in my early days, The E-Myth Revisited, The E-Myth is an amazing book, and then The Millionaire Next Door puts a lot of things into perspective.

I think I have that on The E-Myth in my library and I haven’t read it, so I’m going to write that down.

I wouldn’t doubt it.

I know I’ve got it. I’ve got to look at it.

It’s an incredible book. It’s going to suck you right in. It’s going to teach you with all the hard work that you need to do to really build a business the right way with the right structures and the right leadership in place. It’s a fantastic blueprint for small business owners that are looking to scale and grow. They have a whole program in there and how to do it. As long as you’re willing to put the work in.

Give us three money-saving tips for 2025.

Money saving tips. Stay single. As long as my wife’s not watching this.

I hate that the day that the truth, you’re going to get smacked when she watches.

I think your front on Family Feud, might be the number one answer. Money saving tips. Stay away from the fancy cars. I’ve made that mistake.

I’ve been there.

Number three, come to Qualifi for your business loans and lines of credit. GoQualifi.com. We will absolutely save you a ton of money.

I love it. Who are two key people in your life who have helped you to get to the level of success that you’ve realized in your business?

This is a really good question. It’s really tough for me because I grew up very poor in a family that was drug addicted, both parents and siblings. I kind of had to learn pretty much hands-on by the grace of God. I didn’t go down that road. I didn’t want to go down that road. I’ve started on my own, building my business from the ground up on two milk crates, selling perfumes outside of a welfare office. I’d say this might not be the answer, that’s the right fit, but I found inspiration in people like Muhammad Ali was my number one inspiration as a kid. Somebody who I just loved hearing, I’m going to shock the world when the world was doubting him and every single time he came around and shocked the world every time.

I drew a lot of inspiration from Muhammad Ali, just basically proving everybody wrong. Obviously the Rocky Balboa story,  I’m from Philly. The Rocky Balboa, The Underdog story. It’s just like that’s the kind of stuff I drew a lot of inspiration from. I cannot say that I’ve had a ton of mentors in the business aspect. I’m sure there’s going to be a few that I’ll think of when we’re off this show and I will certainly let you know, but off the top of my head, that’s where I drew and found a lot of my inspiration from inspirational characters like that.

The last question is, what is the biggest obstacle that you have personally had to overcome in your life or business to become the man you are today?

That’s another good question. One of the biggest obstacles last year in fact. What I’d like to say is that I’ve learned so much and I’ve grown so much over the last few years, especially in my faith. One of the things that I’m learning as we get older and learn wisdom is that everything that you go through and all the adversity that you go through is really all part of a plan and that’s setting you up to build your character. Those mistakes that you go through and those hard times are really building that experience on your belt cannot be taught, and cannot be replaced by nothing else other than that experience.

We went through a really hard time last year, believe it or not, as Qualifi is a new company. I relaunched after I sold my prior brokerage firm in 2019. I was in the corporate world for three years and I left there when I launched Qualifi about two and a half, almost three years ago. We were in the business. I don’t know what was going on with the economy last year, but we went through a spurt where we had a bad month in like I’d say April and then we had another bad month. I’m like, “That’s okay.

It’s only a bad month or two. We’ll bounce back next month.” We had another bad month. Now we had a bad quarter. We struggled for six months to where I took myself off payroll for a few months while we were trying to figure it all out. Me and Jason used to go home at night and talk on the phone for two hours a day at work. What the hell’s going on? What are we doing wrong? Let’s look at the marketing. Let’s look at our spending. We just barreled down and we said, “We’ve been doing this our whole life.

We’re going to go back to the basics. We’re going to work hard.” We’re going to just hit the ground running and grind every single day. Through the grace of God, we battled through. We started turning things around in early November and from November to where we are today, we not only doubled our revenues, we actually tripled our revenues. There’s a lot more to that story. To your point, the adversity and the tough times will really build you. When you’re down and out and you feel like you’re looking at a mountain, just keep your head down and keep grinding. You’ll get through it.

That’s what I tell a lot of our business owners that we’re talking to. A lot of them come to us in a lot of hard times and some of them are tragic and you have to show empathy. Sometimes it’s words of encouragement that I cannot tell you how many business owners were really touched by just propping them up and say, “You’ve been here before you’re going to get through this, just hang in there. It’s not permanent. Those hard times are temporary.” That’s my best advice to everybody out there. Keep fighting through.

Eddie, tell everybody where they can connect with you.

Our website is GoQualifi.com. It’s Qualifi with an I. My email is Eddie@GoQualifi.com. Our phone number is 215-Qualifi is the main number to our office. We can connect with you on LinkedIn, and Facebook. It was great, man. I really appreciate you having me on.

Eddie DeAngelis, thank you so much for joining us on the show.

Thank you so much. Have a great rest of your day. Appreciate you having us.

Important Links

• Eddie DeAngelis – LinkedIn
• Qualifi
• E-Myth Revisited
• The Millionaire Next Door
• Eddie’s Email
• Facebook – Go Qualifi

About Edward DeAngelis

Greetings! My name is Ed DeAngelis, Founder & CEO of QualiFi, LLC.

As a fellow business owner, I know how valuable your time is. I appreciate you taking the time to get to know us better.

My 30-year run as an entrepreneur has come from a stand on a street corner in Philly selling perfume and cologne to meeting you in my very own funding company today.

I wanted to illustrate my background to let you know that I know from personal experience what you’re going through. I know the frustrations of wanting to grow and pursue your dreams without having the resources to do so.

In our journey together, you’ll see that we want to help our clients have the best experience possible. One with options you may not know you had.

You will have a personalized journey with your funding manager, who will assess your needs and customize your experience to ensure we find the right loan products for you. From term loans and purchase order financing to equipment loans and lines of credit, we’re here to get you the money you need to succeed in your industry.