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What to Do About Working Capital Loans When a Bank Says No |
Article Submitted by: karle donald
Monday, 01 March 2010
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A prudent starting point for commercial borrowers is likely to be an extended discussion with a small business loans expert for helping to adequately evaluate how to get working capital financing and other business finance help when their bank says "no". This step is likely to be critical to eventual success in formulating a strategy for obtaining new sources of small business funding, but finding and selecting such an expert will not be a quick or easy task for business owners. One aspect that should not be overlooked in locating a viable expert to help is to ensure that the selected commercial finance expert is totally independent and not affiliated in any way whatsoever with the bank which has already said "no".
Some of our earlier advice is now likely to be especially relevant for many businesses because of a deteriorating commercial banking environment. Banks are currently saying "no" more frequently than they have in decades, and we provided advice a few years ago about what actions business owners should consider if their bank rejected a business financing request.
Even for businesses which are both long-term and profitable customers, banks are routinely saying "no". Because this has become such a widespread business lending problem, it is now common to hear phrases such as "thinking outside the bank" and "business loans without banks" when talking about options small business owners might need to analyze.
The process of replacing a bank is rarely an option which is openly pursued by a small business. However, an astute business owner will quickly realize that they have little recourse but to pursue such a path when their bank says "no" to routine requests for business financing. Improvements to the overall financial health of a business will be achieved in a pleasantly surprising number of cases even though this search for new commercial finance choices is undertaken under protest by most commercial borrowers. It might be appropriate to note that one or two banks operate in a near monopoly environment in a surprising number of communities and cities. Small business owners are usually pleased to discover that they can not only replace existing bank financing satisfactorily but also improve their bottom line in the transition when they have literally been forced to find new commercial finance choices.
There are two financing situations that businesses should especially be prepared for banks saying "no". One of these involves working capital financing (including business lines of credit) and the other commercial real estate financing. While a small number of banks are still proving to be reliable sources for some business financing options, recent nationwide business lending reports clearly show a drastic reduction in business loans for commercial mortgage loans and working capital loans.
As emphasized in this article, small businesses are increasingly hearing their bank say "no" to requests for the working capital loans and business financing which they require. For most commercial borrowers this represents uncharted waters and they are often not sure what to do next. While a bank saying "no" is not a result that any business owner would seek, as discussed above in many circumstances it can eventually lead to an overall improvement in business finance alternatives.
Stephen Bush has offered effective advice to business owners for 25 years and delivers working capital financing and commercial loans. Steve and AEX Commercial Financing Group are a reliable source of business financing services Article Source: http://www.ArticleBlast.com |
About The Author:
Learning what to do if their bank says no to a request for business financing and working capital is on a growing list of high priority tasks that small businesses cannot ignore in the face of commercial banking complications.
Learning what to do if their bank says no to a request for business financing and working capital is on a growing list of high priority tasks that small businesses cannot ignore in the face of commercial banking complications.
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