Banks are not currently and probably will not be lending to small, growing businesses anytime soon. They view these small firms as too risky and banks are just not taking on any risk (any risk at all). netedition
But, that does not mean that your business cannot get the money it needs to start or grow. You just might have to go about it in a different manner which, in the long run, maybe benefit you and your business.
For most small businesses, banks are not lending as they don’t want any loans with any risk on their books. While they do want your deposits and other account business, they are just unwilling to let money walk out the door.
They blame these small businesses for items like poor credit, inadequate cash flow, or undervalued collateral but in truth, many of these banks are just not in a position to lend to what is deemed risky businesses. And, if your business does not need a loan, then it is deemed risky. freelancerfunda
What Can Your Small Business Do?
For established small businesses, if your banker is refusing to take your call (and most are) then you should be looking at some of the alternative methods of financing that have been around for decades or that have recently cropped up to fill the lending gaps left behind by the banks.
Know that banks are not nor have always been the only and best options for small businesses. Banks tend to look at your overall business’s profits before making a business loan decision. Alternative financing options tend to look more at the need of the business and its ability to covert financial assets to cash.
1) Look to factoring. If you have customers in the wings but lack the working capital to get these jobs started, factor those job orders for 100% of the cash you need to complete those jobs. Or, Rainmba if you are sitting on a bunch of unpaid invoices, look to use them to get the working capital your business needs to meet immediate expenses or start that next order.
2) Look at SBA loans. While these types of government-guaranteed loans still have to go through banks – the SBA’s 504 programs are leading the way in helping many local small businesses acquire and finance property and equipment. With the SBA’s 504 programs, your local community development corporation will work with the SBA and your bank to finance hard assets. As they all spread and share the risk, your chances of getting funded increase dramatically.
3) Let your business finance its own growing needs. There are a lot of growing businesses that tend to have a lot of sales but are still losing money (more cash out than in). This is not a reflection of the economy or any market but of how the business is managed.
Look for ways to reduce costs while maintaining your current level of sales or if that is not possible then look for ways to increase prices. You should always be looking for ways to reduce costs – even if your business is highly profitable.
Keep shopping around for lower-cost suppliers and vendors. Look to technology to improve processes or for ways to reduce staff expenses. And, ERTCbucks constantly review your service providers – no sense in overpaying for services like phone, internet, etc. If you can get your costs down and bring your profits up, you might not need outside financing at all.
Business is not easy and is getting harder the longer our economy remains stagnated. However, people and businesses still need products and services to get through their days. They look for products that either make their life easier or save them time and money. And, while many are being more selective in what they spend their money on, they are still spending – good news for your business.
Getting and keeping customers (letting them know who you are and what your business offers as well as keeping your business on the top of their minds) is always a challenge. But, successful businesses get out there and find creative ways to meet and overcome those challenges. The same is true in financing your small business.
If you need capital to either get your business off the ground or to finance your current growth, you might as well just forget about the banks and get creative. Banks are just not ready to take chances.
If you can’t demonstrate (sell) ventsmagazine your business’s potential to the many different financing options out there (some that want to work with your business) then you might start thinking about another career.