Ms. Klein said Dealstruck’s customer acquisition strategy includes contacting companies using different loan products through publicly available information. They ask the owner for the reasons they need financing.
A company may operate in a 30-day cycle but deal with customers who have 60 or 90-day cycles. Such companies can struggle to meet payroll or to cover inventory, so they apply for payroll assistance and pay off the loan when their invoices are paid in a few weeks.
Because every company participates in a complicated sphere of many different revenue cycles, many will pay a discount of as much as 10 percent to any customer willing to pay immediately, Ms. Klein said. They can borrow on a short term basis from Dealstruck to receive the discount, pay off the loan, and save a few points on the transaction.
Ms. Klein said she was also surprised at the high correlation between hiring difficulties and financing revealed in the survey. Clients reported hiring 50 percent more hiring beginning in August as compared to June and July. That is the exact period where many also have an increased need for financing.
“There is a direct correlation between seeking employees and capital,” Ms. Klein said.
Contributors
