Bad Credit, No Credit — Working Capital is Still in Reach

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.

The Right Time to Apply for Working Capital

What factors should small business owners consider when applying for working capital?
For small business owners, the question of when to apply for working capital is a common one. To keep business thriving, every company needs working capital to cover the costs of operation, if not for other costs that come along as your business grows. And although all small businesses need it, the answer of when to apply for financing is not the same for everyone. With that in mind, here is a quick look at the different times you may need working capital and the options available to you.

What are your short term needs?
Think about right now, next month, or even the next 6 months. Are you heading into a slow season? Have you experienced cash flow problems regularly for the last few months and feel the strain when you try to cover your operational expenses, payroll, etc.? If so, getting working capital will help you get through the slump, give you the funding you need to pay your team, and allow you to ensure that your company keeps on thriving.

What are your long term goals?
Now, think about the future. Where do you see or want to see your company in the next year, two years or five years? Has the thought of expansion got you excited and thinking about the possibilities of adding new locations, or new products and services? If so, you already know that you’re going to need working capital to help you fund your growth. Growing a business is one of the most common reasons small business owners look for financing.

If you’re planning on an expansion, are considering implementing new technology, hiring more staff or ramping up your marketing efforts, a good time to apply for working capital is right away. You don’t want to wait until your expansion is underway or you’ve plotted out a new strategic marketing campaign and find yourself coming up short with funding resources.

What are your options for working capital?
In the last decade or so, small businesses have faced challenges when it comes to getting loans from traditional banks for various reasons. Bad credit, not enough credit and too short of an operational history are among these reasons. Luckily, companies like ours, which offer alternative financing solutions are helping small businesses get the funding they need.

Asset-based loans are a practical and more flexible option than attempting to obtain the working capital you need from your business bank. Using your company’s assets as collateral, you can apply for a revolving line of credit which gives you a constant source of capital to seize growth opportunities. This will get you through cyclical slow downs or help cover the costs of operation when you need it. So taking advantage of the strength and value of assets like your accounts receivables, inventory, equipment and owner-occupied commercial real estate puts you in a great position to getting working capital when you need it.

If your small business is ready to get bigger or you are facing a situation where you know you’ll be needing financing, talk to us about our various options. We can customize a solution that will fit your needs.