Being non- bankable is not like wearing a scarlet A (although it can feel like it at times). Being non- bankable just means you have to be more creative in your small business financing than other companies. And the beauty of this is you’ll discover other options that might even suit your business better than traditional finance means — at least for a time.
The Commercial Finance Group specializes in alternative financing options for small to medium sized businesses that are considered non- bankable. We offer factoring and asset-based lending in order to get you the working capital you need to continue operating and continue expanding. As the best factoring company, we do our best to get to know you and your cash flow needs in order to determine the best course of action for you on your road to bankability. In this blog post, we’ll review some of the options available for alternative financing if you’re not bankable. Contact us today!
Factoring is an amazingly simple process that more small business’ should take advantage of for their lending needs. Factoring is where you borrow against your accounts receivable in order to receive the cash upfront. Technically, you sell your accounts receivable to a factor in exchange for cash.All you pay is a fee (or a discount) that is usually a percentage of the total amount of accounts receivables sold.. So, rather than wait 30 to 60 days before you get paid by your customer, you can sell your receivables on day one and get cash immediately. You also don’t have to worry about making collection calls or performing credit analysis on your customers; this is performed by the factor and is included in the “discount” you pay the factor.This working capital can then be used by your small business as you see fit.
The Commercial Financial Group is a great factoring company, who can partner with your small business or start up to help you grow, even when others say you’re not bankable. As long as you have solid customers, qualifying for factoring is easy. This fast access to cash can be available to your small business or start-up in as little as a few days. You will be able to extend payment terms to customers confidently, knowing your cash flow is not a problem thanks to our factoring program.
Asset-based lending for small businesses is another often overlooked option for small companies considered non- bankable. Asset-based loans use your company’s assets as collateral for a loan, which you can then use as working capital. A lot of asset-based loans are structured to work as lines of credit, enabling you to draw upon the funds on an as-needed basis.
Companies that are experiencing rapid growth and need access to cash fast are good candidates for asset-based business loans. Any company can procure an asset-based loan as long as their assets are not pledged already to another lender. If this is the case, the other lender may be willing to subordinate its position, meaning agree to take second-place in priority with regard to collateral. The Commercial Financial Group excels at finding the right financing solution for your small businesses.
The amount you can borrow under an Asset Based Loan is determined by a “borrowing base”. The borrowing base is the amount of money that the asset based lender lets you borrow. The borrowing base is a percentage of the value of the collateral that has been pledged. Generally, companies can borrow 75% to 85% of the value of their accounts receivable. However, on other assets, such as inventory and equipment, the amount is usually only 50% or less since inventory and equipment are less “liquid” than your accounts receivable. As your company grows, so do your assets and with an Asset Based Loan, your financing grows with you. Think of it this way, it is like a revolving line of credit that goes up and down based on the growth or decline in your accounts receivable and inventory.
THE COMMERCIAL FINANCE GROUP DIFFERENCE
The Commercial Finance Group specializes in helping businesses who are non- bankable. We believe a promising small business or start-up should have access to the working capital to grow their business and help shape this economy by providing valuable jobs to others and goods and services to consumers or other businesses. If you’re a small to medium-sized business or a start-up and are having trouble obtaining funding, we’re here to help you get to the next level. Contact us today to get started for your alternative source of working capital!