There’s a strange dichotomy we’ve noticed in the world of commercial finance, especially when it comes to small to medium-sized businesses. In the media, and in conversations with our peers, small to medium-sized businesses are praised as being the life blood of the economy. We admonish each other to shop at small businesses during the holidays and highlight their success stories on the evening news. But when it comes to the one thing that small businesses need more than anything else to survive, lending solutions, traditional financial institutions are nowhere to be found.

That’s right, for all their grand gestures and television commercials, big banks are actually reluctant to provide commercial loans for small businesses. Why? Because banks hate risk, and an untested entrepreneur sends up huge warning flags of risk for a cautious financier.

That’s where The Commercial Finance Group comes in. Unlike traditional lenders, we understand that small businesses need help to become “bankable.” Our asset-based lending solutions have made dreams come true for dozens of small to medium-sized businesses, and we’d like the opportunity to do the same for you. Contact us to learn more!

You May Have Assets Without Even Realizing It

Perhaps you’ve heard the term “asset-based lending” before, but thought that this lending solution didn’t apply to you because you don’t have any assets. It’s true that assets like inventory, equipment, machinery, and real estate are all assets that can help you get a loan. But did you also know that accounts receivables, i.e. invoices that are owed to your company, can also be considered assets? Now that you realize you’re in possession of some very valuable assets that could be used to secure a business loan, let’s take a look at some of the reasons why asset-based lending has become such a popular alternative for small businesses.

Benefits Of Asset-Based Lending For Small Businesses

  • Low Interest Rates – Not all loans require the presentation of assets, like home and auto loans. In these lending situations, interest rates tend to be higher because nothing has been put up as collateral against the loan in case of default. However, in the case of asset-based lending, there’s something for the lender to seize if they loan goes into default, whether property or accounts receivables. For this reason, interest rates on asset-based loans tend to be lower.
  • Greater Flexibility – Banks have very strict criteria for deciding to which businesses they’ll give a loan and which businesses they’ll deny. If your business fails to meet even one of these criteria, you could be deemed “unbankable” and your loan application rejected. The Commercial Finance Group specializes in building a bridge to bankability through asset-based lending solutions and other financing products. We realize that small businesses need flexible finance solutions, which is why we recommend asset-based lending.
  • Fast Funding – Applying for a bank loan is a lengthy and often complicated process. If you’re a business who is growing so rapidly that you’ve run out of room in which to put employees or supplies, you need a faster solution. Asset-based lending is a much simpler process than a traditional small business loan, and as such, can be funded much faster.
  • Adaptability – Small to medium-sized businesses seek out commercial loans for a variety of reasons. Sometimes it’s growth and sometimes it’s the need to solve cash flow problems that are threatening to disrupt their business. If you’re looking for a way to adapt to changing conditions in your industry, asset-based lending can give you the flexibility you need without increasing the liabilities in your balance sheet.
  • Fewer Covenants – As explained in Investopedia, “A covenant is a promise in an indenture, or any other formal debt agreement, that certain activities will or will not be carried out. Covenants in finance most often relate to terms in a financial contracting, such as a loan document stating the limits at which the borrower can further lend.” Asset-based lending typically comes with much fewer of these restrictions than a traditional small business loan.

Are you looking for small business lending solutions that deliver the benefits discussed above? Did you think that you had no hope for a bank loan, but now believe that asset-based lending could be the answer? Contact The Commercial Finance Group in Atlanta today.