Articles Archives - Celtic Capital

Bank Lending V. Asset-Based Lending

Banks and asset-based lenders – two capital sources but with some significant differences in assessing to whom they’ll lend:

Banks:
Typically rely on a company’s creditworthiness and cash flow projections.

Asset-based …More

Factoring V. ABL – It Does Make a Difference to the Borrower

When exiting a client, bankers usually will make a referral to either a factor or an asset- based lender. The differences between the two are significant and can matter dramatically …More

You Really Can’t Run a Successful Business Without Cash Flow Planning

Arguably the best, but often underutilized tool to run a successful business is cash flow planning (CFP). CFP tells you what cash you have coming in, and when, which enables …More

Using ABL To Get Your Business Back on Track

Companies that come to asset-based lenders (ABL) are in some form of distress (e.g., losing money, under-capitalized, growing too quickly) and banks can’t (or won’t) help them. When turning to …More

Portfolio Management During a Rising Interest Rate and Inflation Environment

One of the effects of a rising interest rate and inflationary environment on companies is a strain on cash flow. Borrowing costs increase, influencing profitability and debt servicing abilities. It’s …More

Benefits of Asset-Based Lending

Asset based lending offers non-bankable business owners a viable financing solution by leveraging their tangible assets (accounts receivable, inventory, equipment and real estate) as collateral which provides more availability and …More

President’s Message (January 2024)

In my Letter last July, leads were up; fundings were up; and my spirits were up. 2023 was on a path to be a good year for Celtic Capital, and …More

Asset Based Financing v. Factoring

Asset based financing (ABL) and factoring are two distinct methods of obtaining working capital for businesses:

ABL involves using a company’s assets (inventory, equipment and accounts receivable) as collateral to secure …More

When Real Estate Is a Deal Component

Sometimes, financing deals have real estate components to them. Some lenders lend against real estate; some don’t. We don’t but we have contacts in different market segments who do, to …More

Tips for Business Owners To Re-Build Bank Relationships

The pandemic’s impact on businesses was widespread causing strained banking relationships for many. To regain trust and access to bank financing once again, in addition to fixing whatever problems the …More

Acquisition Financing

Many times, new deals, or our existing clients, are presented with opportunities to acquire existing businesses and we’re asked for help. Our help is two-fold. First, we’ll analyze and provide …More

The Importance of a Sound Accounting Department

Small, growing businesses with inadequate people in their accounting departments could be in for a rude awakening if they can’t plan and manage cash flow correctly. Cash flow is critical …More

President’s Message (July 2023)

Rapper 50 Cent made a movie called Get Rich or Die Tryin’. One of the lines from that film was, “When I’m right, I’m right…and when I’m wrong, I could …More

You Broke a Loan Covenant. Now What?

You broke a loan covenant. Though not ideal, it happens. But should it? Technically, no because you should be monitoring your covenants. With monitoring, you’d know if you had an …More

Equipment Loans at Celtic Capital

Please use this as a quick reference guide. It outlines the parameters of Celtic Capital’s Equipment Loan Program.

Equipment-Only Loans

For existing manufacturing equipment owned by the Company in a facility (where …More

What Does Your A/R Turn Rate Say About Your Business?

Accounts Receivable (A/R) Turnover is a financial metric that measures how efficiently your company is able to collect customer payments. It’s an important metric in that it provides insight into …More

Negotiating an Intercreditor Agreement

Intercreditor Agreements are used when there are multiple lenders financing multiple assets from the same borrower. They establish the priority of each lender’s claim on the borrower’s assets and set …More

Why Cash Flow Planning Is Critical

Cash flow planning (CFP) is essential to manage your financial resources effectively. It involves projecting future cash inflows and outflows to ensure that your business has enough cash on hand …More

Navigating Uncertainty in the Banking Industry

Given the two recent bank failures (Silicon Valley Bank and Signature Bank), one of the main questions now is how this will impact the industry as a whole. We’ve already …More

Top 10 Reasons Borrowers Choose Celtic Capital

For struggling businesses, finding a non-bank lender can be challenging. Let us make it easier for you. Here’s a list of the top 10 reasons our clients turn to …More

Three Benefits for Banks Working with Celtic Capital

#1
When a bank exits a client to Celtic Capital, we don’t require the banking relationship to move away from the bank. That gives the bank a foot in the door …More

Asset Based Lending V. Merchant Cash Advance Loans

Asset based lenders (ABL) are focused on collateral (receivables/inventory/equipment) and lend against the value of those assets. Merchant Cash Advance lenders (MCA) focus solely on cash flow and not on …More

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; …More

Bankruptcy V. Self-Liquidation

When a business decides to cease operation and file for bankruptcy, everything stops until any interested party gets relief from the stay through the court, and this can take weeks …More

President’s Message (January 2023)

In my last Letter (July 2022), I was pretty upbeat which was a refreshing change from the previous couple of years. And even though deal flow in the second half …More

Equipment-Only V. CapEx Loans

At Celtic Capital, we make equipment-only loans on existing manufacturing equipment (and/or rolling stock) that’s company-owned and housed in its own facility. As we’re looking for the equipment to be …More

The Importance of Keeping Your Business’ Governance Documents Up to Date

Oftentimes, when you (business owner) set up your business, you set up Articles of Incorporation with the state along with Bylaws of how the company will be managed and run. …More

Business Owners: How A/R Turn Affects Your Business

True or False. Take this short quiz to see how much you understand about A/R (Accounts Receivable) Turn and its importance to your business:

Your A/R Turn rate tells you how …More

Commercial Bankers: Before Exiting a Client…

Bankers looking to exit a client would benefit from taking a look at the borrowing base criteria from the standpoint of a non-bank lender. Why? For one, it’s impractical to …More

Communication With Your Lender Is Key to Managing Your Borrowing Base

When you’re not financing (or unable to finance) your company with an open line of credit through a bank, your company’s cash flow is managed one of two ways – …More

Deals Don’t Always End Up the Way They Start Out

Every deal is different. Every deal has challenges. Some of the challenges (and possible solutions) are known up front; others come out of due diligence. ABLs must be willing to …More

Why Having a Handle on Cash Flow Matters

Over the last couple of years, COVID PPP, EIDL and ERTC refunds flowed into the market saving a lot of struggling businesses. Now that we’re past COVID (from a business …More

Understanding the ABL Monitoring Process

We’re often asked why we do field exams three times a year along with ongoing verifications. The general answer (and as is the case with all lenders) is these processes …More

President’s Message (July 2022)

I’m happy to report that this Letter is filled with good news. What a refreshing change.

When I wrote my January Letter (in December, 2021), I said that EIDL were set …More

Concentration As It Applies to SMBs

Concentration is the amount of accounts receivable (A/R) due from a single customer or when a few customers represent a sizeable portion of a company’s total sales. Lenders may impose …More

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 …More

Some Basic Differences Between ABL & Factoring

When you need to find an alternative to bank financing for your business, you have options, the most common being asset based lending (ABL) and factoring. Understanding some of the …More

How Celtic Capital Evaluates Equipment

If you’re looking to offload a client and there’s an equipment piece, it’s a good idea to show us any existing appraisals you have on the equipment. That way we …More

Commercial Bankers: You Can Say “No” and Still Have a Happy Client

It may sound farfetched, but here are two scenarios in which banks can say “No” yet keep their clients happy:

A bank has a line of credit with a client who …More

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 …More

EIDL Subordinations: The Long and Short of It

We’re coming to the point in time when banks will be looking to exit companies propped up by government-sponsored stimulus money and programs (PPP and EIDL). While PPP money poses …More

5 Tips for Moving Out of EIDL

Tip #1
If you’re carrying an Economic Injury Disaster Loan (EIDL), be aware that for any change in financing you want to do, you need to deal with your EIDL first …More

’08 Recession V. COVID-19 Pandemic

We thought it might be interesting to compare and contrast the ’08 recession to the current COVID-19 pandemic. We found some notable differences:

In ’08, with no credit available in the …More

Are Your Loans Secured or Unsecured?

As a lender, this question comes up when asking potential borrowers about their bank payoffs. We go through the balance sheet with them to clarify what other secured creditors they …More

President’s Message (January 2022)

You’ve undoubtedly heard the phrase, “May we live in interesting times.” These past two years, as the pandemic has wreaked havoc on the small lending community, have definitely been interesting …More

Celebrating 40 Years in Business

I’m proud to announce that 2022 marks a new milestone in the history of Celtic Capital – our 40th Anniversary in business. Over the years, we’ve helped hundreds of businesses …More

Mark Hafner Inducted Into SFNet Hall of Fame

A Letter from Alex Falo on Mark Hafner’s Induction Into the SFNet Hall of Fame

November 2021

It is with great honor that I write to you about Mark Hafner’s recent induction …More

5 Tips To Overcome Lender Objections

There are generally three scenarios in which business owners can’t get bank financing:

Their loan is non-performing, and they’re asked to find new financing.
The business doesn’t fit capital, debt or profit …More

Don’t Risk Losing A Client When Our Equipment-Only Loans Can Save The Relationship

Lenders – when you’re not comfortable extending additional credit to a borrower, Celtic Capital can help. We do Equipment-Only Loans that will enhance your existing client relationships; not compete with …More

When Will a Bank Take Me Back?

We’re often asked: “The pandemic led to my business losing money and my bank asked me out. When will the bank take me back?” Our answer is, “If you do …More

How to Turn Your Turndowns into Clients

Given the pandemic, you’re probably seeing many prospective business clients that are un-bankable. They may have suffered losses in 2020, gone through their PPP money or are finding their EIDL …More

PPP and EIDL’s Impact on Business

If you own or run a business, when you think about COVID’s effect on your business, the perspective is really about the effect of any PPP money you received and/or …More

A/R Turn Rate Never Lies. What’s Your Turn Rate Telling You?

Do you know the turnover rate of your receivables? You should. It’s one of the most important numbers to know because it tells you how long it’s taking your customers …More

Commercial Bankers: Given COVID, Where Are Your Marginal Clients Now?

With inflation an issue and an economy that may take a dip in the fourth quarter once COVID spending is behind us, now is a good time to begin assessing …More

President’s Message (July 2021)

In January, I closed my Letter with, “Wishing everyone a better year.” We’re now halfway in and while Celtic Capital’s new business activity and number of proposals issued have improved, …More

What Asset Based Lenders (ABL) Look for Besides Collateral

Business owners often ask what lenders want in their relationships with borrowers. For Celtic Capital, it’s two things:

Good Communication
Timely and accurate reporting

Good communication because lenders need to understand what’s going …More

Resources & Tombstones: Articles