Search

Turned Down For Financing?

With all that is going on in the world, businesses are finding themselves in difficult financial times. If they are not there now, they may see tight cash flow months on the horizon. So what does a business do these days when faced with tight cash flow situations?

In the past if the company had solid credit score sand had positive equity their traditional bank would extend them a line of credit of straight loan that would be able to help them through tougher months. Unfortunately, those days of traditional financing with ease have come to a close. Banks do not like uncertainty and when uncertainty enters the market, banks become conservative. Now this does by no means state that traditional banks will no longer finance companies, it means that deals that had more risk in certain times would take reasonable risk and finance businesses that may have had rough times, has a solid business plan and assets to back the loan. Those riskier loans are the loans that will not be financed in times like now. But in times like we are going through right now, even businesses that are on solid ground may find it hard to receive traditional financing.

So what does a business do during these times?

Get Creative!

Now I do not mean creative with your books and records, that is unethical. What I mean is your financing strategies have to be creative. There are lots of options beyond your traditional banks that lend money. Each option carries its own risks and expenses. Loans such as cash advance loans are one option, though I would use this as a last resort. These loans often come with a daily payment required, high interest rates and short (3 to 6 months) payback. Another option is credit card financing in which the financial institution gets paid back out of your credit card processing, so each time someone swipes their card at your business the loan company receives a percentage of that sale. These are usually a little less risky but still high interest rates. There are a lot of different options for financing including an equity partner and for a company that has a lot of hard assets, leaseback financing. The leaseback financing is exactly what it sounds like. You put up your machinery/equipment as collateral and the company provides you with financing based on the value of that equipment.

There are a lot of possible financing options out there beyond the traditional banking. For a free 1 hour consult to discuss what your situation is and what options may be available for your business call us today!


1 view0 comments

Recent Posts

See All

Charity

With the holiday season upon us, I felt it the right time to discuss charity. In years gone by not only could you feel good about giving to charity but you could treat your good deeds as a tax write o

Falling Behind?

Tax extensions are designed for individuals and businesses to have more time to gather the proper documentation that is required to file a proper tax return. The common misunderstanding is that with a