Published By Janet Gershen-Siegel at June 12, 2018
We reviewed Yellowstone Capital, one of several lenders in the online space.
Written by Janet Gershen-Siegel
Yellowstone Capital offers Business Capital. They are an ISO (independent sales organization).
We look at the specifics and drill down into the details.
Yellowstone Capital is located online here: http://yellowstonecap.com/. Their physical address is in Jersey City, NJ.
You can call them at: (855)972-2748. Also, you can contact them at: [email protected].
Here is a link to their About page: http://yellowstonecap.com/about.
In 2015, they had in a $1.5 million deal which, at the time, was their largest ever deal.
Yellowstone offers what are called C and D paper loans. These are sub-prime loans.
These are types of alternative, or non-conforming, loans, often for borrowers with poor credit. The term “paper” just means when a lender makes a loan, it takes back a promissory note and security interest like a mortgage. And those are pieces of paper.
Non-conforming loans are more risky than conforming ones, and are alphabetically classified as according to risk. Non-conforming C loans are less risky than D loans. D loans have the lowest classification.
There are far fewer lenders who want to make C and D loans. Hence there is less competition for these borrowers.
This causes interest rates to be higher. Also, most lenders view these borrowers as being more risky and more desperate.
That perception also, understandably, pushes up the interest rates.
Sometimes alternative loans can be seen as predatory. Borrowers in such a situation should always be careful that there are no significant prepayment penalties. Those are common with non-conforming loans, and they can prevent you from refinancing.
This online lender offers same-day approvals. Yellowstone Capital funds merchant cash advances. They will handle high-risk borrowers. And collateral is not necessary for working with them.
Yellowstone Capital’s flat fees are generally x1.4 – x1.6 of the amount advanced. However, the origination fee and APR are not known. This is because their website is not very informative.
Advantages include fast approvals and acceptance of high-risk borrowers. Also, they offer flat fees.
Disadvantages include a lack of transparency regarding fees. Their website has very little information. However, a high-risk borrower may have few other options. Also, any borrowers in the C and D paper categorizes should know the interest rates will be high.
And this is by definition.
Any business owner should always be wary of funding sources which are not transparent with their fees. Maybe Yellowstone Capital online lending reveals all once you apply. But why should any business owner have to wait?
Companies which will work best with Yellowstone Capital are high-risk borrowers. This is because they may have few other options for C and D paper loans.
However, other borrowers should press for more transparency. Or they should be ready to look elsewhere if Yellowstone Capital is not forthcoming.
Because this should always be basic and easy to find information.
And finally, as with every other lender, always read the fine print and do the math. Go over the details with care. Better yet, work with a financial professional with no affiliation with the lender. Decide if this option will be good for you and your company.
In addition, consider alternative financing options that go beyond lending. These are options such as building business credit.
However, only you can best decide how to get the money you need to help your business grow.