Organization Focus: Expansion Capital Group

In a world of instant gratification, nearly anything an individual wants or needs can be acquired at the click of a button.

As a business owner, you can purchase a new laptop, branded merchandise, or critical production equipment online, and it will be delivered to your door the next day.  

However, one thing that hasn’t caught up to speed for business owners is capital. 

Traditionally, loans and investments can take months or even years to secure depending on the source. For the most part, that makes sense. If someone is lending a significant amount of money, they need time to ensure their investment will be responsibly managed. 

Unfortunately, many business owners simply don’t have time to wait. That’s where Expansion Capital Group (ECG) comes in.

ECG offers funding (ranging from $5,000 to $300,000) to profitable business owners in need of quick access to capital.

How does it work?

According to Tim Mages, ECG’s Chief Financial Officer, many small business owners lack the financial background necessary to pursue capital in advance. 

“They don’t necessarily grow up in finance, maybe they’re selling widgets or running a restaurant, and they have a specific skill set,” Mages said. “It’s not that they’re unprepared, but what we see with a lot of small businesses is that they’re thinly staffed, they’re trying to be efficient, and they have to react quickly.”

When it comes to reacting quickly, Mages offers the example of an entrepreneur who has been putting all their energy toward winning a client. Once they secure that contract they’ll need to get to work immediately, and that may require equipment or extra staffing, which in turn, requires funding. 

The reactionary approach to applying for capital may not have been feasible in the past, but thanks to technology and its ability to leverage data, Mages says ECG is able to approve and distribute funding in record time. 

ECG calls itself a financial technology company, encompassing both financial services in the form of capital and technology as it relates to data processing and analytics. 

Once a business owner submits ECG’s online application for funding, they can expect a response within two to three hours. This initial response will inform the business owner if they have received a soft approval for the loan. After two to three days, one of ECG’s advisors is able to perform due diligence and officially approve or deny funding. 

“The tech piece is really where our uniqueness is,” Mages said. “We’re able to process a file from a small business owner and within two to three hours basically give them an indication of the amount of capital we could potentially provide.”

In comparison, businesses who choose to pursue funding from more traditional sources may have to wait anywhere from one to four months before their application is processed and approved or denied.

Who qualifies for funding from Expansion Capital Group?

ECG focuses heavily on businesses that can prove profitability but may not have the assets or collateral to put up toward a loan. 

According to Mages, after the last recession in 2008, banks became burdened by regulations that limited their lending capability when it came to unsecured loans.

“We saw a number of small businesses getting left behind by banks, and that was really the void we were trying to fill,” Mages said. “I don’t think we set out to be the fastest to underwrite, but the market and technology have really gravitated toward this. It’s the Amazon concept of ‘I want it now.’”

Though ECG is open to hearing from businesses at almost any stage, most funded clients are early to mid-stage businesses with some level of profitability. The minimum amount of time in business for a client is six months. 

“We’re not going to be the angel investor that comes in when the business owner is drawing it up,” Mages said. “We like to see some revenue in the business, some cashflow that we can then underwrite, taking concept risk out of the equation and making it more about execution.”

Most of the businesses ECG funds tend to be service-based, including restaurants, technology-enabled service businesses, construction services, trucking and logistics, and healthcare services. 

“It really runs the gamut, but a very common theme is they’re asset-light businesses,” Mages said. 

The average loan size from ECG is around $32,000, and Mages says most of the businesses they work with are under $10 million in revenue. 

“Part of our objective is that they do become bankable,” Mages said. “As businesses grow and scale, they obviously become less risky.”

Still, some of the clients ECG works with have higher revenue streams, but simply don’t have time to wait. Ultimately, it’s all about supporting businesses as they grow and build toward success.

“By providing small businesses with capital, we’re completely aligned with their success,” Mages said. “We want to see a portion of that funding going toward a growth initiative, and that’s a big piece of the puzzle when our underwriters are finalizing funding–’What are they going to do with the money, and how will they grow?’”

All in all, ECG’s funding method has filled a niche in the market by combining a commitment to helping businesses grow with a fast process. If you’re interested in pursuing funding from ECG keep those plans for growth in mind.

Two Things You Can Do This Week:

• Does your business qualify for fast, flexible funding from Expansion Capital Group? Read over ECG’s list of qualifications before you consider applying for funding.
• If you’re a business owner in need of capital, and you don’t have time to sit through a more traditional lending process, fill out an application for funding here.