Credit Tightening Creates a Pipeline of New Business
We’re currently in a cycle of high inflation and fed rate raising. From a historical perspective, rates aren’t that high, but they are compared to where they’ve been more recently; and businesses have become used to those lower rates.
Add to that supply chain issues and we’re in the type of environment that impacts companies’ operational issues. The effect: marginal businesses struggle more. Banks see that and they tighten up on credit.
While for the past few years banks could justify hanging on to marginal clients, in this environment, it’s a different story. If the trends we’re seeing continue, and marginal clients further deteriorate, banks that continue to hang on may not be able to get out at all. But there’s more to think about.
The sooner banks send marginal clients to alternative lenders who will help these businesses get back on track, the sooner this pipeline of newly re-bankable business will come back.
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.