We're here to talk about lending and creative lending that is, you might, I might add to that. We all know the traditional banking side, but a lot of us don't know the alternative of that as well. So I am proud, very, very proud to have Sarah Weldon on with TrueFinCo, who is a TikTok star, but also just a straight badass when it comes to lending. So Sarah, without further ado, welcome.

Sara Weldon, Owner, TruFinCo:
0:25

Thank you. Thank you. I don't think I can take credit of a TikTok star, but I appreciate it. Thank you. You got 90,

Stoy Hall, CFP®, Host:
0:31

000 followers. That's a star. That wins. Thank you.

Sara Weldon, Owner, TruFinCo:
0:36

Yes. I'm trying.

Stoy Hall, CFP®, Host:
0:37

Well, why don't you tell us about your background, um, and how the hell you got into, to Alternative Linux?

Sara Weldon, Owner, TruFinCo:
0:44

It was definitely not intentional. I will tell you that, Stoy. Um, never in my wildest dreams would I have thought I would be involved in lending money of any kind, ever. If you had said that to me 10 years ago, I would have thought you were on some strange drug or something. It's, it's not what I intended, ever. Um, I have always been an entrepreneur, so definitely started that journey young. And… Prior to COVID, I was actually working. I took a break from being an entrepreneur. I was working for a software company, traveling to some amazing hotels and resorts all over the world, loved it. Um, and you know, it was fulfilling my need. I love helping people. So I was, I was. doing that. I was traveling. It was great. Uh, I met a great guy and he was managing a finance company and I thought it was interesting. I need to talk about work and he like, Sarah, you'd be so good at this. And I would just look at him like, are you kidding? Money is so stressful. I don't want anything to do with money. Like get away. I, people that lend money are like, Shady and yucky. And I just thought, no. And he kept pushing and I was like, stop it already. I am not going to get into this industry. Go away. And COVID happened and my amazing job turned into. Data entry, which if you know me, that is like the worst possible form of punishment ever. I don't like running numbers. I do not like sitting behind a computer. I love talking to people. And it was just not at all what, what fit for me anymore. So Rick was right there at that moment saying, all right, now's the time. And I quit my very secure job and jumped into the finance world and haven't looked back. And that, that's a very edited version, but, um, you know, we, we actually at the time joined a different company, um, had a different partner and it very, very quickly was apparent. This was not a good fit. It was somebody that was exactly what you think of when you think of lending. Right? So shady liar, just out for money. And, um, I did something I've never done in my life. I quit on the spot, which. Do you know me? I'm like the person that gives like three months notice. I never want to hurt anybody or put them out and we quit and I'll be honest. It was really scary. We weren't financially prepared. We were not working with someone like you, so we weren't prepared and, but we knew we, we wanted to help people and we knew what was important to us. And I had gotten a glimpse of the alternative world of funding and had seen what it could do for people. And I was like, We got to do this. This is amazing. And we took our own funding, which is strange to say, but we took 20, 000 in business credit. And started our company and I'm gonna be honest. It wasn't easy. The phones didn't start ringing. The money didn't come in. Um, my partner or Rick, my husband. Now, he was, um, donating plasma to make make ends meet, like driving several times a week, donating plasma, but we stuck at it because we knew we knew this is what we want to do. We knew we could really help people and. Here we are several years later, and I, I would never do anything different.

Stoy Hall, CFP®, Host:
4:10

That's amazing. And I love the part about where you're speaking about caring about people more than money. You're literally dealing with money and giving people money, but your whole background and just thinking about how can we help more people. And ultimately that is the most important thing for a business owner. I believe, and I think others do too. If what you're doing, your purpose of your actual business is just to help people, which all of ours should be. Then the money will come, you'll be well off, it'll all take care of itself. If you are focused only on making money, then shady things happen. Shady shit happens, right? Uh, whether it's you shortcut it, uh, take advantage of, all of those things happen and those end up not being really good people and, or forced into a decision they don't want to make even if they are a good person. So I applaud you for that,

Sara Weldon, Owner, TruFinCo:
4:59

for sure. Thank you. Thank you. I love it. So

Stoy Hall, CFP®, Host:
5:04

you're a business owner and jump right into it head first. How is being a business owner overall? Be real.

Sara Weldon, Owner, TruFinCo:
5:14

There's lots of pluses. I work from home. I work in my pajamas if I want. Um, I live on a farm, so, you know, it's, it's got some benefits, but there's some hard parts. I will be honest. The nature of my personality, I love helping people. That is what. I always at the front of every thought, but unfortunately I tend to overdo it. Right. So it's hard to sometimes find that balance of Sarah, you got to shut it off. I'm the person that leaves no stone unturned. I find a solution. I get back to every single person, you know, so sometimes, you know, I feel like I'm, I'm pulled in a lot of directions and my, my tank is empty, but you know, but then I get this great client that tells me that what I did for them. Change their life and, and save their business. And it's like, all right, this is totally worth it. I'm I I'm okay. I can make it another day now. So it's, it's a mixed bag. I will say that.

Stoy Hall, CFP®, Host:
6:16

Yes. And I always tell every business owner. I said, it sucks. Right? Being a business owner sucks. Embrace it. Um, but it is so worth it. It is, at the end of the day, so much more worth it than clocking in and clocking out. Now those people, I love them, I respect them. We have to have people who are nine to fivers, but for the business owners, you have to realize it's gonna suck. And there's a lot of sucky parts. But, it is so, so worth it too. So let's talk about alternative lending and whatever the hell that means, um, and all the parts that go into it. So why don't you walk us through if, as if I'm coming to you, um, as we'll just say a startup or business that needs funding. How does that work? What does it look like? What the hell am I getting myself into?

Sara Weldon, Owner, TruFinCo:
7:04

It's a great question. And that's the thing. I live in the alternative world of funding and most people are like, what, what the heck is that? Most business owners that come to me, most people in general, have all been brought up to believe you've got to go to the bank to get funding. You have to provide financials. That's it. And you have to fit into that perfect box. And so alternative funding is We live in this different space that focuses on what really matters instead of all the nonsense, the paperwork, the documents, the financials and really gets down to what matters. So, for the business owner coming to me. I embrace them. I'm like, welcome to this amazing world where there's so many options. And for example, startups right in, in traditional lending, good luck. If you're a startup, yes, there's some SBA options, but they're not always going to happen. You walk into a bank and say, Hey, I want a startup loan. They're going to send you on your way. You know, don't let the door hit you on the way out. Whereas in my world, alternative lending, we have options for startups, right? We have options. That don't need income that don't need financials. And most people, when they hear that, they're like, you've got to be kidding. Like what? And that's the part I love about it because I get to help startups make it a reality and follow their dream. Is it normal funding? No. Do they have to be creative? Absolutely. They've got to think outside the box a little, but if they're willing to do that. It's just a whole new world. And there's so many possibilities there. And, and that's, what's amazing about alternative lending. You couldn't pay me a million, a million dollars. I would never go into traditional lending ever. Like it's painful. And I mean, I help people in traditional lending. I take their declines because they can't help them. And I'm like, welcome. I, I embrace you. Let's get this done. And it's, it's lovely. I feel like my role, I get to be. I mean, an educator because nobody knows about alternative lending, but also I kind of get to be like this superhero a lot and, and I'm, I'm a gentle superhero. I'm not the super, you know, I'm, I don't have this arrogant ego. I'm like the superhero, like, let me hold your hand. Let's do this together. And it's, it's pretty amazing.

Stoy Hall, CFP®, Host:
9:34

It is, it really is ultimately. And let's back up to the traditional side for those that we've, they've never been through it. Uh, traditionally speaking banks, if you're going there to get a loan, they're going to want two to three years of personal and business tax returns. Yep. Usually that's the start of like, well, if you're a startup, I don't have it. Like it's not there. So good luck starting that with that, that way. Right. Um, yes, you have to have a solid credit score on top of all of that. And. Usually you have to be cash flowing. Uh, and so those three things for most businesses that are either young or startups. I mean, you're not checking all those boxes for companies that are needing funding or maybe they're expanding or doing certain things. Sometimes you don't have that cash flow to see, right? Sometimes it's just not there for it. So then again, traditional, um. Hurts you or potentially can hurt you if you go into the traditional side on the real estate side You're looking at 25 30 to 40 percent down without even trying Ultimately, right and so those are all of like the giant hurdles that traditional banking has for all of us to deal with Which is good because they have regulations and all that stuff to protect them, cool. Uh, but it's bad for, you know, majority of all small business owners because we all have situations that need the creativity. Absolutely. Until you are very, very successful. Even when you're very, very successful, you still need to have that creativity because things happen or you want to do something that is just non traditional

Sara Weldon, Owner, TruFinCo:
11:08

for sure. Absolutely. Well, and, and as you know, Stoy, as a business owner on taxes, you write off as much as you can, right? You don't want to show a huge income. In traditional lending, they look at that bottom line to see if you qualify. And that's what's so backwards and why so many people. Don't don't get very much money. I mean, you could have a multimillion dollar business, but your bottom line, because you have a good accountant could be, you know, maybe a couple hundred thousand and the bank's like, no way. Are we going to extend you, you know, a large line of credit. So that's, that's really the painful part about traditional lending.

Stoy Hall, CFP®, Host:
11:44

Absolutely. So in the alternative space, is there like a thousand programs, 15? Like what are, how many programs are usually. Are involved in alternative side.

Sara Weldon, Owner, TruFinCo:
11:54

So, I mean, there are a lot of programs. There are, I try to just keep a few that I like that are solid, because I think if you give someone too many options, it's very overwhelming and they're like, Oh, I, I go with what I know works well, the simple options, the fast options, the least amount of. Paperwork documentation pain. Um, so it's, it's pretty simple, right? And, and that's the best part about it.

Stoy Hall, CFP®, Host:
12:24

Yeah. And I, and I agree. Hey, I'm a client. Uh, my wife and our client, uh, we took on some business debt when. Um, I left my business partner earlier this year and some of that sitting on personal credit cards. So we wanted to get some business credit and figure that out. Traditional was, there's no chance in hell in regards to that. And some of it is because of cashflow, but a lot of it was because of change of ownership as well. And even though my businesses have been around for, let's see, the oldest one was 2016, I believe. The others are in 2020. That's like three years. That's plenty. But ownership change in April looks at it as a brand new business, which never makes sense to me, traditional banking, how make it make sense. Um, so we're also clients, so we've been through it. Um, and it is relatively simple and easy. Do you have to be creative? Do you have to be organized and understand what you need, how you'll achieve it, and then implementation? Absolutely. Absolutely. And that's why we're talking, right? That's why we're partnering together to help those that do this. So what we can put a plan together. They know what's going on and we can move forward implementation and everything is happy and they don't get that overwhelmed feeling. Uh, clients. I know specifically my clients don't like being overwhelmed. My job is to make sure they're not overwhelmed and simplify things. And that's what you do on your side too. So let's not get it wrong. It's not super simple as in traditional, um, but it's not overly creative and complex where it takes a PhD to get through. It just takes a little bit of organization on the front end and the back end and otherwise relatively

Sara Weldon, Owner, TruFinCo:
14:02

easy. Absolutely. And I think it's, it's also down to understanding what you're doing and getting into. And that's where the lending industry fails in so many ways, because I, I look at people out there and they explain things in such complicated ways. They use really big, fancy words, so they feel really important, but then it leaves the average person like me thinking, okay, I could never do that. That makes no sense. Forget about it. I don't have any options. So, you know, I really try with With all clients and even on social media, I explain things in a painfully simple way so that people understand they don't feel intimidated because that's the worst thing. And then a lot of times people get intimidated and they agree to funding that they shouldn't because they're too embarrassed to admit, like, Hey, back up, explain the fine print on that. What does that really mean? Because this person has been using these big, fancy words and they don't want to appear stupid. So it's, you know, it really comes down to understanding it as well.

Stoy Hall, CFP®, Host:
15:06

Oh, 100%. I think really understanding what your, your plan and your story is only helps your job, by the way, but it helps everyone to understand, okay, uh, you know, we've got this, we're trying to do X and this is exactly what we need. Then let's build a plan off of that. So everyone knows what's going on, the timing, et cetera, that goes into it. I believe now going through the process that has to be done on the front end. It should not be somewhere where you're, someone's just calling you and going, Hey, I need a hundred K and let's do it. They need to have not necessarily a business plan, but they need to have a plan in place to help you put the plan together for the lending so that together. Everything can work together as opposed to if they don't, it could take longer. It could not be enough. It could be too much, which we talked about that on, on the call with you is like too much is okay. As long as you don't go waste it, but also just, it makes sense to make it efficient and make sure everything is good to go. So in my humble opinion, I might be biased is to hire someone, a planner, a strategist, something, uh, prior to speaking with you and then have them with you. So that way this plan can be built and everyone's on the same page. Okay. Second to that is then that person you hire should be me. I'll walk you through it with Sarah and her team, and it'll be as seamless as possible.

Sara Weldon, Owner, TruFinCo:
16:34

I agree, which is why I was so happy to find you. You, you really are the missing piece to this because I can give people the money, but I'm not skilled like you. I can't look, I mean, I. But I can't help someone plan it out and really look at those numbers and say, does this make sense? Is this going to help me? How am I going to use this effectively? That's where you come in. So I feel like we're the perfect, you know, combination for, for lending. It's also something you never get in the traditional world. I mean, would you ever go into a bank and have, you know, someone like you coming in and going, let's talk about this, let's run the numbers. No, you know, none of that happens. So I agree. I think there's value in what I do, but I think it becomes even more valuable when working with you because it's, it's done so much smarter and effectively.

Stoy Hall, CFP®, Host:
17:27

Absolutely. So we've hit upon, um, some ideas from a business perspective. What about real estate? Is, is there alternative things to real

Sara Weldon, Owner, TruFinCo:
17:35

estate? Yes. Yes. And that's my favorite world. Um, yes. So. There are private lenders and it's very different than the traditional lending and by private lenders. I want to be clear It's not some rich guy. I go to behind that sits behind a desk. It says here's money Sarah That's what everyone assumes. These are actually companies, but they're backed by investors. So it's it's different It does function. These are still loans, right? It's still legit legal everything It's just a better process. So traditional lending Focuses entirely upon your personal credit profile, income, you have to fit into debt to income. All those pieces when you're buying an investment property, such a buy and hold, fix and flip. Instead, private lenders focus on what matters, which is the property itself. What's that going to cash flow? And is that rent going to exceed your monthly mortgage payment? Brilliant. It's not that complicated, but what's beautiful about that, and people are always amazed by that, you don't have to provide tax returns. You don't have to provide proof of employment. They, I mean, I joke, they don't care if you have a job. I, I don't mean that, but really none of those pieces are required. And I work with a lot of brand new investors and man, it is just, I love it. Cause they're like, do I send you my tax returns? No. Do you need to know where I work? No. And they're like, are you okay? Like, what's wrong with this? When are you going to tell me what's wrong with this? And I'm like, no, this is welcome to my world. And you know, they, they focus on the right things and they do it fast and effectively, you know, a bank might take several months. I get things. I mean, I've got one guy I've I'm on property number six. I'm closing in five days with him. Five days for each loan. So it's, it's a much better alternative really.

Stoy Hall, CFP®, Host:
19:26

And what type of real estate investing is it like just single multifamily? Is there commercial involved? Does it matter?

Sara Weldon, Owner, TruFinCo:
19:34

Everything. So it can be single family. So either if you're buying a distressed property, you're going to rehab it. Or if you're buying one turnkey, you're going to rent it. You can do multifamily. So duplex, triplex, quadplex or apartment complex. Um, it's commercial even. So you want to buy the building that you're going to operate out of, or you want to buy a building and have, you know, Some nail salon, a coffee shop, it's all of that can be done through the private lending world, even ground up construction. So really everything.

Stoy Hall, CFP®, Host:
20:04

Let's talk about traditional. So traditional, usually what we have is again, we've already discussed traditional on the business side. It's very similar on the, on the commercial side. Um, aside from you also have to have the P and L's and make sure it cash flows as well, but also you're putting down. I think the last time I checked, we were on the 25 to 30 percent, um, and then rates, uh, I think last time they were in the sixes, fives and sixes. So when we compare that, um, what does that look like from alternative side? Right? So I'm over here, 25, 30 percent down. You just went higher. So seven percenters. Now, probably in the commercial side, what does it look like on the

Sara Weldon, Owner, TruFinCo:
20:42

alternative side? Yeah. So rates are similar. So I'm like a 30 year fixed loan, seven to 9%. So not that much different than the bank. Um, in terms of down payment, here's where it differs. So on, on DSCR loans, so straight rental loans. Yes. Initially it is 25 percent down. However, the caveat to that is private lenders do not care. They don't trace where that down payment comes from. So if you're doing the BRRRR method, You can, I mean, I, I help with this, but you can borrow that down payment, right? And not have to, and that's just in the case of rental. So, yes, 25 percent down for a DSCR loan. You can use borrowed funds. I help clients with that all the time. But when it comes to, for example, fix and flips, the more experienced you are, the better leverage. So you could get in with 10 percent down. Um, same thing with ground up construction. You've put enough into your project already. Okay. You can go up to, you know, 85 percent total loan to cost. So there is a lot more, um, flexibility with private lending. And I, I've gone head to head with banks where on a construction project, the bank wants the client to come up with 40 percent down. And we're able to come in with 15 percent down so. I believe private lending is really made for real estate investors. Banks have a great purpose. Sure. If you're buying your own home, but when it comes to real estate investing, and especially if you're self employed, they are, they are not friendly for at all. They're not your friend. Private lending really is. It is made for the self employed especially, and it's designed to help investors succeed. It's because they're

Stoy Hall, CFP®, Host:
22:29

investors themselves. Exactly. Ultimately, right? Exactly. Like that's where the money is coming from is they are investors. Investors understand one, they understand the risk, but they understand flexibility and are able to take on some of. I want to say risk. Obviously, it is a little more risk than banks, but like they can take on other issues, but also then negate some of the risk on the back end because they aren't regulated. They don't have, you know, everything that they have to deal with, with the banking regulations. So some people would say, well, that means it's more risky. Sure. If you're comparing it to FDIC, fine. It is more risky. But you can negate a lot of that on the back end because of the other things that are able to happen. Plus, you're also able to be an investor and have a lot more, uh, I guess emotional tie into it and more of a story, uh, for them as opposed to a bank. Banks won't care. Investors understand investors.

Sara Weldon, Owner, TruFinCo:
23:25

Absolutely. You explain things so much more practical than I do. You do. I have

Stoy Hall, CFP®, Host:
23:35

investors. I know investors, right?

Sara Weldon, Owner, TruFinCo:
23:37

Well, you have a great way of breaking everything down in a very practical way. So everyone understands the nitty gritty. I just kind of flit and float cause I get excited.

Stoy Hall, CFP®, Host:
23:51

Hey, I appreciate that. I appreciate that. What, um, what is one of the most important topics, ideas, or whatever that you have seen hit the most on your social media or that you always talk about, what, what would be that one key elements that in this episode, you want everyone to take away from it?

Sara Weldon, Owner, TruFinCo:
24:12

You know, one, one key element that often gets overlooked as a, even as a business owner is. Your, your own personal credit and that, that is the foundation, right? And if I can stress one thing, it's that if you can put some time into getting a strong personal credit score profile, that's going to benefit you even as a business owner, because in, in all these types of lending, yes, they're alternative. Yes, they're creative. Yes, they don't need financials, many of them, but they still need that strong personal credit score. So having a 500 credit score. Sure, I can help you, but your interest rates are going to be atrocious, whereas if you put in some work, if you, I can do some credit repair, you know, all those pieces, I'm telling you that that road is so much smoother. All those doors open up and and it's not. There's not all that friction that you'd feel if you had challenged credit. So that's not always everyone's favorite topic. I'll be honest when I talk about it on social media, not everybody loves it because it's like looking at someone's underwear drawer. When you talk about credit, I'm not, I mean, it really is. You're talking about their credit score and people are like, Oh, I don't want to tell you this. And, and I, I don't mind. I love talking about it. Like let's, let's all open the drawers and be honest, but you know, there's ways to fix it. And I just. I always want people to understand your credit score isn't a reflection of you as a person. It's not. It's a reflection of a period of time in your life. And the key is not to stay stuck in that period of time because it probably was an awful time, but to realize there is a way out and it is so worth fixing. It's so worth fixing.

Black Mammoth Compliance:
26:10

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