Asset Based Lending Is a Short-Term Fix
A bank turns down your loan request or you’re with a bank and your banker asks you to find new financing. What should you do? In both cases, it’s important to understand why you’ve been turned down. Is your business growing too fast? Is there enough capital in the business? Have you broken covenant? Ask the bank what the issue is and what it will take to get back in (or have a loan request accepted). That’s number one.
Number two: it’s important to understand that just because you’re not bankable doesn’t mean financing is unavailable to you. There are other sources of capital – asset based financing being a good option. The goal of asset based lending is to get your business back to mainstream financing as soon as possible.
Asset based lenders are what is referred to as “transitional” lenders. That means the third thing you must do is view asset based financing as a short-term solution; one that will cost more than bank financing because these lenders are taking on the risk you’ve learned that banks won’t take with you, but you won’t be with them for long.
The best news is that asset based lenders will help your business with a forced discipline that will be the roadmap for getting you back to a bank.
About Celtic Capital
Companies looking for working capital to cover operating expenses, fund growth, increase buying power and take advantage of vendor discounts and rebates turn to Celtic Capital. With an appetite for the more complex transactions, Celtic Capital has a history of success in crafting creative, flexible asset based financing solutions from $500,000 to $5 million with no financial covenants.
As an independent lender, working with companies nationwide, Celtic Capital is willing and able to alter price and deal structure and expand lines of credit to handle its clients’ increased revenues; and when cash flow is an issue, will look toward providing an inventory facility to help offset lost cash flow.