A company’s credit history doesn’t have to affect your ability to get working capital.
When it comes to securing working capital from a traditional bank, the first step they take is running your credit history. For many small businesses, this is an immediate concern because if you’ve gone through some financial struggles in the past you may have a low score. Unfortunately, credit history is the key factor banks use to assess your ability to pay your loan payments and therefore, a score that does not meet their criteria will likely lead to a rejection for a small business loan.
But the strict requirements of traditional banks don’t have to hold business owners back from pursuing the working capital they need. Today there are alternatives that don’t rely heavily on your credit history. Here is one practical option.
Your company assets can get you the capital you need
Take a look around your office, your warehouse, and even in your factory if you have one. What do you think all your company’s assets are worth? Thousands? Tens of Thousands? If you have machinery, a good amount of inventory, and accounts receivables, then you may have just what you need to secure working capital for your business. An asset-based loan is one solution you should consider.
Alternative lenders don’t focus on your credit
Alternative lenders who offer asset-based loans allow you to use your company assets as collateral and as a result, are less concerned with your credit history. Instead, they provide you with the opportunity to obtain funding based on the value of your assets like your owner-occupied commercial real estate, your equipment, inventory and accounts receivables. For the small business that’s had issues with credit in the past or that has a short credit history, this is truly an exceptional solution.
Assets-based loans are more flexible
When you’re in need of cash, an asset-based loan is not only easier to obtain, there are less restrictions to the business owner. Unlike traditional bank loans, asset-based lenders do not dictate how you have to use the capital, as long as it is used for your business. So if you’re looking to cover payroll and operational expenses during a slow period or if you are in a period of rapid growth or acquisition, you can use your asset-based revolving line of credit. Many small business owners use working capital to purchase new equipment, update their technology, hire new employees or simply to increase their liquidity.
Our financing solutions are designed to provide business owners with the capital they need to improve liquidity, foster growth and/or alleviate gaps in working capital during cyclical or seasonal slumps. We serve a diverse array of industries and provide comprehensive solutions that address all your needs. For more information on how we can assist you, get in touch with us today.