Commercial Financing for one business is not likely a fit for the next business.
Commercial Financing. Each company is unique, just like its owner. Many Business Lenders, such as banks, will create “pigeon holes” where they try to place companies into when they design financing programs. This is just is not the best method. Those businesses that do not fit into the pigeon holes, just fall away as unimportant misfits.
What happens to these “misfits”? Most often, they will be doomed to a limited existence and not be able to grow but some businesses find “specialty lenders” that cater to the needs of “un-bankable businesses”.
Bank Commercial Financing Misfits
Many times these “misfits” of Bank Commercial Financing are turned away from the bank for reasons such as:
- Too short of time in business: Banks will often require a business to have at least 2 years of audited financial statements and 2 years of tax returns. This means, in order to be eligible, the company must be in business for 3 years or more to meet this requirement. Businesses that are operating for under 3 years, are the businesses which most often need commercial financing.
- Non-domestic customers: Many banks have a discomfort to say the least, when a business sells to businesses outside their own country. As such, if you work hard to get customers from different countries, you may find your key assets “Accounts Receivables” not eligible for your bank borrowing base. This will either reduce or eliminate your bank commercial financing options.
- Rapid growth: Whether a company is new or well-seasoned, when they come into a period of rapid growth, most bank commercial financing will not allow for rapid growth. When this happens, the lack of flexibility on the bank’s part will result in lost opportunities for the company as you will not be able to fill those new orders.
- Credit issues: Life happens and things outside of your control will happen. Whether the bank wants to believe it or not. Just because you may have bruises on your business credit, should not disqualify your business from getting the funding it needs, and deserves. Alternative commercial financing options exist for businesses that have experienced such issues. An example of these issues could be a bad debt which strains cashflow, resulting in missed payments or other credit related problems.
What To Do?
Fortunately, there are alternative commercial financing lenders who tailor to situations as described. They will be more than happy to provide the financing your business needs. To these commercial finance lenders it will not be relevant how long you have been in business. It will also not be critical of where your customers are located. In addition, if your business is growing quickly it will be considered a good thing. Plus, if you have some isolated credit issues that will not mean a denial.
IMMFinancial.com is one of these alternative commercial financing lenders. We have products such as:
- Accounts Receivable Financing,
- Equipment Finance (Leasing),
- Purchase Order Finance,
- Small Business Loans,
- Trade Finance or Export Finance,
- Letters of Credit,
- Asset Based Finance, as well as
- Merger and Acquisition Finance.
See the IMM Financial YouTube Chanel for more videos.