Strategically Navigating Business Financing Complexities With Ami Kassar

Ami Kassar is the Founder and CEO of MultiFunding, a company helping businesses achieve their growth goals through creative and personalized funding solutions. He authored The Growth Dilemma, is a regular contributor on the current state of the financing market through his weekly articles in Inc., and has provided valuable advice to the White House, the Federal Reserve Bank, and the US Treasury Department. Ami has been interviewed by numerous national publications, including The New York Times, Huffington Post, The Wall Street Journal, Entrepreneur, and Forbes.

Here’s a glimpse of what you’ll learn:

• [03:23] Ami Kassar on the inception and business model of MultiFunding
• [10:13] The importance of choosing the right SBA lender for acquisitions and expansions
• [16:27] How to execute smart business financing strategies in uncertain times
• [20:46] Why Ami advises against overcommitting to lower monthly payments
• [21:38] Weighing the benefits of SBA loans for expansion despite potential interest rate risks
• [25:24] The value of having the right debt instruments
• [39:50] Ami shares the lessons he learned from his father and immigrant upbringing

In this episode…

In a dynamic business landscape where financial challenges can make or break a company, how do entrepreneurs effectively navigate the complexities of business financing? This is a question that many business owners grapple with as they seek to grow and stabilize their ventures.

According to Ami Kassar, a renowned expert in business finance, the key lies in understanding and strategically utilizing various financing options, such as SBA loans and debt management techniques. Ami emphasizes the importance of a clear understanding of one’s business model, the right approach to equity investments, and the necessity of adapting financial strategies in response to changing market conditions. This approach to financial planning not only mitigates risks, but also paves the way for sustainable growth and resilience in the ever-evolving world of business finance.

In this episode of the Inspired Insider Podcast, Dr. Jeremy Weisz is joined by Ami Kassar, Founder and CEO of MultiFunding, to delve into the intricacies of business financing. They discuss strategic approaches to managing debt and leveraging SBA loans, the impact of equity investments on a company’s financial options, and practical tips for adapting to economic uncertainties.

Resources mentioned in this episode:

• Ami Kassar on LinkedIn
• MultiFunding
• AmiSights Podcast
• The Growth Dilemma: Determining Your Entrepreneurial Type to Find Your Financing Comfort Zone by Ami Kassar

Special Mention(s):

• The Entrepreneurial Operating System
• The Growth Dilemma: Determining Your Entrepreneurial Type to Find Your Financing Comfort Zone by Ami Kassar

Related episode(s):

• “How to Sell More And Save Time with Robert Hartline of Absolute Wireless” on the Inspired Insider Podcast
• “[Top Agency & Israel Business Series] The Art of Building Brands Across Continents: Insights With Eitan Chitayat” on the Inspired Insider Podcast
• “[SaaS & Israel Business Series] Cybersecurity Threats: Detecting and Mitigating Risks With Ran Geva” on the Inspired Insider Podcast

Quotable Moments: 

• “If you think money is going to fix all your problems, it’s usually going to make them worse.”
• “If you need money, you need to have a good idea about what you’re going to use it for.”
• “The money is going to cost you money, you’re going to pay interest on it.”
• “You have to have a strong thesis about how you’re going to make a lot more money than the interest is going to cost you.”
• “Your EOS experience is really as good as the person who’s helping you get through it.”
• “SBA is an incredible tool if you want to buy a business or buy an apartment.”
• “Treat people like we would want to be treated.”

Action Steps:

• Review your business plan for growth and identify specific areas where a strategic investment could make the most impact. A solid plan clarifies the purpose of potential loans, reducing the risk of exacerbating financial strains.
• Explore SBA loan options and the unique benefits they offer, like low to no down payment for expansion loans. SBA loans provide long-term payment options that maintain cash flow, vital for sustained business growth.
• Understand the importance of monthly payments over APR when considering business loans. This perspective prioritizes cash flow stability and flexibility, which is crucial for navigating unexpected business fluctuations.
• Stay informed about the true dynamics and commitments associated with taking on investors or partners. Knowledge in this area protects against potential equity issues that could hinder future financing opportunities.
• Empower yourself with financial projections and business models to make informed decisions for growth. Understanding economic drivers and forecasts allows for strategic risks and measured investment in areas like marketing or acquisitions.

Episode Transcript

Intro 0:01 

You are listening to Inspired Insider with your host, Dr. Jeremy Weisz.

Jeremy Weisz 0:22 

Dr. Jeremy Weisz here founder of inspiredinsider.com where I talk with inspirational entrepreneurs and leaders today is no different. I have Ami Kassar of MultiFunding and Ami before I formally introduce you. I always like to point out other episodes people should check out of the podcast. And I remember I was at EO Eccentric and Ami came on stage for maybe 60 seconds. And what he said in that 60 seconds I went back to my friends in EO I’m like that was the best talk of the day. So we’ll talk about some of the things that you talked about in that 60 seconds. But in general, what you do and how this relates and really helps business owners but some past episodes include, since this is going to be part of the EO series as well. I do national member Robert Hartline.

He built up a chain of cell phone stores to over $100 million. He’s a software called Call Proof he sold that company — that chain of cell phone stores. And so that was a great episode. Another one was an EO Israel member, Eitan Chitayat. He’s an agency founder, he talked about working to launch Gmail in Africa, and how he’s helped build brands across continents. And also EO Israel member Ran Geva a founder of webs.io. And they help companies with brand protection, monitor the dark web and security for companies, and much more. So check those out on inspiredinsider.com.

And this episode is brought to you by Rise25. At Rise25 we help businesses give to and connect to their dream 200 relationships? How do we do that? We actually do that by helping you run your podcast we’re an easy button for a company to launch and run a podcast. So we do the accountability, the strategy and the full execution. Ami, we call ourselves magic elves that run in the background and make it look easy for the host in the company so they can develop amazing relationships and create amazing content. For me, the number one thing in my life is relationships. And I’m always looking at ways to give to my best relationships. And I found no better way over the past decade to profile the people and companies I most admire and share with the world where they’re working.

So if you’ve thought about podcasting, should you have questions, go to rise25.com. Ami also has a podcast and you can check it out on multifunding.com on their resources and podcast page. So just without further ado, Ami Kassar is the founder and CEO of MultiFunding. They’re a Philadelphia-based consulting firm that specializes in helping business owners across the United States. They develop creative and cost-saving alternatives for their business debt needs and structure. He’s also the author of the Growth Dilemma and speaks nationally and to entrepreneurs and business owners who desire money to grow their companies and improve their cash flow and or restructured debt. So, Ami thanks for joining me.

Ami Kassar 3:06 

Thanks so much for having me. Pleasure to be with you, my friend.

Jeremy Weisz 3:08 

So let’s just start off with I know, basically, you got fired on a Friday, and then started your company a couple days later. Start off talking about MultiFunding in what you do.

Ami Kassar 3:23 

So mission, we all love entrepreneurs. MultiFunding and our mission is to help them and help them succeed. And so really, what we do is we listen to stories people call us, because they think they need money, although sometimes they may or may not need it. Sometimes that may or may not be appropriate for them. And we listen to the stories and we try to understand where they are, and what their challenges are, and where they’re trying to get to.

And then take that story and put it into the debt markets, and help them understand what their options might be if there are options for them to get their business to the next level. Then if they want our help, we package up their information. And we take it out to a national network of lenders we felt and find them the best lender to get the loan done and allow them to move on with the next stages of their business.

Jeremy Weisz 4:33 

Talk about that for a second, which is a scenario where they thought they needed money and you thought otherwise. Because you have used some really, really good insights into when people come to you and you may make recommendations against maybe what that person is thinking and sometimes you probably get pushback.

Ami Kassar 4:59 

No, I mean there are a number of examples, but if you have a good strategy, and you run a good business, money’s the easiest thing to solve for. But if you think money is going to fix all your problems, it’s usually going to make them worse. So, sometimes people will call, and they’ll say, I need a million bucks. And the next question is, for what? And the answer is, I don’t know, I need a million bucks. The answer is, that’s not good enough. And then you’re helping me think of a story early on, when someone was adamant that they needed a million bucks. And I said, okay, tell me the story, your financials or your business.

And salad, like, if they were lucky, they were gonna give $100,000 where their business was. And I told him that. And he said to me, do you understand I need a million bucks, and someone told me they can get it from me? And under what conditions? Yeah, well, all I have to do is wire them $10,000, and they’ll get me a million bucks. That’s it. So if you need money, you need to have a good idea about what you’re going to use it for. The money is going to cost you money, you’re going to pay interest on it. And you have to have a strong thesis about how you’re going to make a lot more money than the interest is going to cost you and can you afford the monthly payments?

Otherwise, it’s a bad idea. Sometimes people also think they need more money than they actually do. So one time, I think I shared the story in the book, but a woman called and of all things, she had invented the world’s greatest portion worth of shampoo, for sure. Okay. Some junk, taking only $40,000, she had to write a business plan for a $5 million raise. If I’m taking the time to print out the thing, I would have probably killed a few trees. And she needed $5 million to buy her building and get her equipment and hire her management team. And I asked her, have you sold anything yet? And she said to me, you don’t understand. I can’t sell anything, until I have all this.

And I said, no disrespect, but you need to burn that business plan. And go find a co packing facility and go start knocking on doors and try to find a place and try to see if you can actually get customers buying this stuff. She didn’t like that, which is okay. I never heard from her again. But I can imagine she got her $5 million.

Jeremy Weisz 8:33 

Hopefully, yeah, just a minimum viable product to test the market.

Ami Kassar 8:42 

Sometimes, people should have like payrolls due on Wednesday, and they don’t have cash. And there are in the world, these incredible temptation of these predatory lenders, who are offering you the money in your bank account in 24 or 48 hours. And we don’t do those loads. We need to encourage that entrepreneur to do is to slow down, cut some payables, find some other ways to do it, stretch some things but these exorbitant fast moving high interest loans. Those are like oftentimes last nail in the coffin. I’m not in the business of putting the last nail on any.

Jeremy Weisz 9:43 

Let’s talk through, I mean, some scenarios, right? So we’ll talk through some scenarios where maybe someone wants to buy a business, maybe a scenario where someone’s gonna buy out their partner. I’m an expansion hiring people and that kind of goes into when you got on stage, your compelling 60-second talk that I still remember, start off talking about expansion loans.

Ami Kassar 10:10 

Well, let me just back up for 30 seconds if I can. When it comes to acquisitions, and in fact, in a lot of the work we do, we use the SBA products. And the SBA has a major branding problem. A little bit like EOS implementers. Okay. Some people think EOS in EO is religion. Your EOS experience is really as good as the person who’s helping you get through it. It’s amazing. Some of them conducting practice. VA loans, people think that their friends’ experience with an SBA loan is the SBA. People think that their experience with a particular lender, maybe historically as the SBA, and that’s not the truth.

There are about 1200 lenders in the country who do SBA loans, but only really about 100 who know what they’re doing. And so sometimes people get stuck with the wrong lender, or they get stuck in the big bank, where someone’s giving them misinformation about the SBA. So the key about SBA lending, if it’s the right thing for you, is being with the right lender, and we have hired and fired a lot of SBA lenders over the years. So, with that fabric, SBA is an incredible tool if you want to buy a business or buy an apartment, one thing people don’t know is if you a lot of people don’t know, if you want to buy a business that’s just like yours, the SBA will consider that to be an expansion loan.

And you can do that with 0% down. So it’s essentially 100% financing, on a 10 year note without any prepayment penalty. For an expansion loan, we’ve we do them all the time. It’s a business that is not like your business today, or you don’t have a business today, you can do 10% down or sometimes even 5% down. Again the benefit is 10 years to pay the loan back. And if you have a partner in your business who you want to buy out, you can also do that with 0%. You can be Jeremy if you want to go into some of the more important panics of an SBA acquisition.

Whether it’s a partner buyout, or straight acquisition or an expansion load, a lot of that’s going to come down to the appraisal. And the SBA lender is required by law to order an appraisal of the business by an SBA-approved appraiser. The laundry is essentially around cash flow. And so sometimes a great way to pop the air out of the bubble on these valuation questions is get the appraisal cost about $2,500 bucks even earlier on in the process, even if maybe you’re gonna have to order it again. And if the appraisal is the appraisal and then if the buyer and seller agree on that number you can move on and the same holds true for parlane. So if Jeremy you ever partner your business, and one of you wants to go it’s pretty easy. And you’re 50/50 partners, order the appraisal, say the appraisal comes in at $2 million your shares worth a million dollars.

And then you can decide, does one want to buy the other out, it provides some logic to think about businesses if you’re going to go buy a house or want to sell your house if I go into Zillow today. My house says it’s, my house is worth a million dollars. My house is worth somewhere between $900k or $1.1 million, but it’s not worth $10. Okay. And that’s what the appraisal process helps with in the SBA. And oftentimes, the transactions we help people with are actually quite friendly. An employee wants to buy a company from a business. That’s the legacy that the owner wants to leave. Sometimes it’s an inter family transfer, etc. Sometimes partners in a happy way, just want to go on and do different things.

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