Working Capital Loans And Commercial Finance Funding

 

According to The Working Capital Journal traditional working capital loans are only available from a decreasing number of commercial banks. These business lenders are not part of the small number of larger banks that have received bailout funds. It is important for small business owners to know which commercial lenders still offer this type of financing How To Find The Right Investor.

 

Most cases, the commercial lenders who are active in this type of commercial financing are not allowing working capital loans to businesses that are current with their debt payments and have a net profit (based upon recent financial statements). These two conditions can often be met to obtain new commercial loans. This is for refinance of lines of credit or term loans that have been recalled by many lenders. Alternative funding options are available for businesses that do not meet these requirements. These include business cash advance programs.

 

Many small-business owners also depend on personal credit lines to finance their business operations. Many reports have come out about widespread cancellations or reductions in these lending programs, particularly those that involve lenders who have received multi-billion dollars of taxpayer money. This money was meant to facilitate the lending to consumers and businesses.

 

Lenders have had to cancel many personal and business credit lines due to decreased ability to pay and worsening business conditions. According to The Working Capital Journal, a large percentage of borrowers had excellent payment records for recent credit line cancellations or reductions.

 

 

There are several noteworthy conclusions based on recent commercial lending activity.

 

(1) Businesses should be more prepared for life than relying on traditional bank lines of credit. Instead, they should consider alternative sources of financing like business cash advances. These are working capital that is based on future credit card processing activity.

 

(2) It would seem that the recent inability of most lenders who have received bailout funds to report in any meaningful manner how and where they were used is a clear sign that these lenders are likely in worse financial health than they are reporting.

 

(3) Government funding should be directed at commercial lenders who have a track record of making good loans and not bad ones.

 

(4) When faced with difficulties in obtaining working capital loans or commercial loans from dependable lenders, business owners should be open to exploring commercial finance funding options beyond their existing banking relationships.