Since the financial crisis, it’s harder than ever to convince banks and traditional lenders to buy into your big idea, so it’s not surprising that more and more business owners and entrepreneurs are turning to alternative options. How does that make loan stacking bad for business? When you’re just starting out or trying to grow your small business, it’s tempting to take advantage of any available influx of capital, but not all small business loans are created equal, and when you start to take out multiple loans at the same time, that’s when your problems really begin…

What is Loan Stacking?

When a borrower takes out more than one loan simultaneously, this is known as “loan stacking”, and it’s as precarious as it sounds for you and your business. While multiple, short-term business loans might give you a temporary sense of financial freedom and possibility, it’s easy to forget that those lenders are all going to come calling at some point.

Ultimately, loan stacking means tying the fortunes of your business to multiple lenders–and that suddenly doesn’t sound quite so tempting, does it?

What are the Risks?

Keeping track of multiple debts and payment deadlines, and managing several different creditors, can become a full-time job in itself, and adds a whole new level of stress to the running of your business–something that you definitely don’t need! Many quick-fix online loans require weekly or even daily repayments, with interest that spirals at a frightening rate, and most businesses just can’t sustain this level of debt.

Loan stacking puts pressure on your cash flow from every angle, stretching your resources to breaking point, and therefore begins to actually restrict what you can do and how you can grow (which is the opposite of what you intended when you took out the loans). You might even find yourself taking out new loans in order to repay the existing ones, which is never a healthy cycle.

With more than one creditor at your door, there’s a higher risk that you will default on at least one loan, and this would seriously damage your credit rating for the future. Many lenders even include anti-stacking policies in their loan agreements to protect themselves against having to compete for your resources and assets; they are well aware of how risky this practice is and how unstable your business could become, and they want to be sure that they’ll be able to get their money back.
In this scenario loan stacking is bad for business because taking out multiple loans simultaneously could therefore invalidate your initial loan agreement, sending you into automatic default and even risking legal proceedings.

So What Are Your Options?

Loan stacking is most risky when used for emergency cash flow, and when the loans are all similar products. Any loan you take out should have a distinct function and an obvious return: what are you using it for and how is it going to benefit your business?

At Loan Solutions OU, we offer a suite of different products and financing options for everything from equipment and property to debt consolidation, so even if you do take out more than one loan, they each have a clear role to play in your business strategy. They don’t compete with each other because they don’t cover the same functions and rely on the same assets. From bridge and asset-based loans to a merchant cash advance, you can select the product and repayment terms that support the way you do business.

Many online lenders pride themselves on being quick and easy, without tons of credit checks, restrictions and hoops to jump through, and of course this is appealing–especially if you need funds fast. But this does make it easier to stack up multiple debts that soon become crippling for your business, and some lenders will even intentionally exploit this. At Loan Solutions OU, we guarantee an easy application process and fast approval so that your business doesn’t suffer while you wait for much-needed funds, but we make sure to understand your situation and offer the products that are most appropriate to you.

Don’t put your business at risk for a quick fix! At Loan Solutions OU, we believe in supporting your business to grow and thrive in the future by helping you to make smart financial decisions today. Call us now to find out what we can do for you.

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The full-length article, which spans Mark’s entry into the financial world and subsequent journey within it, can be read at deBanked Magazine. Here, we explore some of the characteristics that make Mark the perfect candidate for the deBanked cover story.

Teamwork

When Mark joined loan solutions ou in 2007, he taught his then-small team of account advisors to “do right by customers, each other, and the company as a whole.” He believes that loan solutions ou wins together or not at all.

However, Mark does more than teach the philosophy: he lives it out in day-to-day practice, whether meeting with potential business partners or mentoring new employees. On the road, he relies on the team to provide the data and support he needs to close sales. In the office, he offers advice and guidance, helping team members improve upon their jobs, and perform them with passion.

Persistence

Mark also encapsulates the quality of persistence. loan solutions ou’s latest win, a partnership with Office Depot, took time, effort and some sweat to accomplish. Mark spent the better part of a year meeting in person with potential financing partner executives and conducting regular conference calls.

He encourages the loan solutions ou team to act in the same manner—becoming singular points of contact for their clients and accounts. Because of his example and teachings, loan solutions ou account executives do more than just make sales. They guide small business owners through financing application processes, follow up with clients following the capital disbursement, and ensure their overall success.

Customer Service

Customer service, as well as the customer experience, stands integral to loan solutions ou’s growing success. Some of the focus on it can be attributed to Mark’s personal employment record. He spent his high school summers working odd jobs like construction, landscaping and flower deliveries.

Those experiences, not to mention his own hard knocks, give him an understanding and empathy for small business owners. Mark wanted to go pro as a quarterback but blew out his throwing arm during his college days. He regrouped, considered his options and threw himself into academics, coming to land on financial services as a career path.

Measurement

Mark knows, though, that persistence and teamwork only pay off when accompanied by measurement, analysis and refinement. When he first joined loan solutions ou as National Sales Director, he established key performance indicators (KPIs) for success.

The company’s trajectory and Mark’s reputation speak to the subsequent results. Through measurement, the business has made their work ethic of teamwork, persistence and customer service all the more effective.

Growth

After Mark’s football career dissipated, he knew he couldn’t stand still and hope for the heavens to part with illumination. He chose to try new things, including several internships (three in politics and one with Morgan Stanley), so that he could figure out how to get to where he wanted to go.

He takes the same approach as Chief Revenue Officer at loan solutions ou. He attends conferences and meets with potential company partners in order to turn his dreams for loan solutions ou into realities. So far, he’s been highly successful because he doesn’t daydream about company growth—he ambitiously pursues it with persistence, dedication and the backing of the entire company, from the smallest sales unit to the Chairman and CEO.

Mark truly is the perfect cover story for deBanked.com. His perseverance and commitment to excellence and company growth make him an innovative financial executive to watch now and well into the future.

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