Need To Switch Lenders? Here’s How.
If your bank isn’t giving you the capital you need or if you’ve been asked out of your bank, the first thing you need to do is ask, “Why?” Talk to your banker. Find out if it’s a balance sheet issue, a weak P&L, is your business too new; have them explain their reasoning because if you’re not bankable with your current bank, chances are you won’t be bankable to another bank either. If that’s the case, you need to look at alternative sources like asset based lending (ABL).
As you scope out asset based lenders, it’s important to understand what your business really needs; what’s most important. Is it access to money (more availability)? The cheapest price? Will the lender support your need for additional capital as positive opportunities arise? Do you want access to the decision-makers?
If you’re in a growing business, availability and access to capital is probably most important so don’t get hung up on getting the cheapest price (which typically has the most constraints). And don’t get caught in a covenant situation that could restrain growth. You need money and flexibility.
Remember, you’re only going to be with ABLfor one to two years, so the increased cost doesn’t really matter that much for such a short period of time. What does matter is getting a lender who supports you.
And if you have an EIDL, that’s an extra step in the process of switching lenders. Make sure you ask every potential lender if it has experience and expertise in EIDL subordinations. That will speed up the exiting process and get you much quicker access to the capital you need.
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.