Non-Bankable Businesses Have Alternative Financing Services Available
Although bank lending has become somewhat easier over the past couple of years, it is still very difficult for many small businesses to obtain a bank loan.
If a business cannot obtain a bank loan at a particular point in time, it is considered “non-bankable.” The reasons for being “non-bankable” can range widely. For example, the company may be relatively young, with little credit history. It may be experiencing financial difficulties, with a large debt burden relative to its earning capacity. It may be in a turnaround mode. It may be in or close to filing for bankruptcy protection. It may be in an industry that is experiencing temporary weak demand.
In any of these situations, without sufficient financing, a company will not be able to grow or to turn itself around. For example, it may be experiencing slow payment from its customers – often waiting 60 days or longer for invoices to be paid. If it wishes to remain in business and grow, it will need a cash infusion to finance its current operations, and to invest in marketing, sales and other growth-generating activities.
If your business is non-bankable, you can still obtain the financing you need. There are alternative financing methods for you to obtain the cash flow you require to keep your operations going and to invest in your growth.
For example, you can avail yourself of such programs as accounts receivable financing, invoice financing, purchase order financing, and non-recourse financing with credit protection. Accounts receivable financing provides almost immediate cash upon submitting qualified receivables to a financing firm.
After an initial set-up period, you can obtain funding in as little as 24 hours from the time you submit your receivables. You’ll get an advance of 75% to 90% of the face value of the receivables accepted for funding. When your customers pay down their invoices, you get the balance of the receivables’ face value, less a small fee for the financing firm’s services.
The amount of receivables financing and related techniques can grow with your business. As your receivables grow, so will your access to receivables financing. Furthermore, whatever your industry, you can take advantage of receivables financing.
At Paragon Financial, we’ve been providing alternative financing to non-bankable businesses for more than 20 years. We offer a full range of non-recourse accounts receivable financing and po financing structures.