How Secure Are You with Your Bank Financing?
If your business has been impacted by COVID, (regardless of whether or not you received PPP money) you should be talking with your bank. Show your banker 2020 year-end results and ask what the bank’s position is during COVID vs. “normal” times. Specifically, you need to know from your banker, “Will you hang in with me or not?” If you did receive PPP money, ask how that factors into your banker’s response – does the bank look at the loss if it doesn’t show as PPP?
Bottom line: find out the bank’s posture relative to COVID and ask, “Should I be thinking of replacing you?” If your bank does want you out, ask for the timing and ask for a referral to an alternative lending source – an asset-based lender (ABL).
ABL instills discipline in financial reporting, provides guidance in operational performance and the time for companies to fix the issues that got the business in trouble in the first place. They take on companies that banks don’t want and help them get back in shape, usually in one to three years, so that they can return to bank financing.
It’s difficult enough managing your business during COVID, but if your bank is thinking about letting you go, it will be much less disruptive to your business if you’re proactive and in front of it.
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.