Sabtu, 21 Mei 2011

How to Get Small Business Financing - When the Bank Says No

How to Get Small Business Financing - When the Bank Says No

Small business owners are increasingly hearing their bank say "no" to requests for needed business financing and working capital. For most commercial borrowers this represents uncharted waters and they are often not sure what to do next. As described in this article, while a bank saying "no" is not an outcome that any business owner would hope for, it can eventually lead to an overall improvement in commercial financing options under many circumstances.

There are two financing situations that businesses should especially be prepared for banks saying "no". One of these involves commercial real estate loans and the other working capital financing (including business lines of credit). While a small number of banks are still proving to be reliable sources for some business financing options, recent nationwide commercial lending reports clearly show a drastic reduction in commercial loans for commercial real estate financing and working capital loans.

Banks are routinely saying "no" to small businesses which are both profitable and long-term customers. Because this has become such a widespread commercial lending problem, it is now common to hear phrases such as "thinking outside the bank" and "business loans without banks" when talking about strategies small business owners might need to analyze.

For commercial borrowers to adequately evaluate how to get working capital and other business financing when their bank says "no", a prudent starting point is likely to be an extended discussion with a small business loans expert. Finding and selecting such an expert will not be a quick or easy task for business owners, but this step is likely to be critical to eventual success in formulating a strategy for obtaining new sources of commercial financing. 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".

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. Even though this search for new commercial finance alternatives is undertaken under protest by most commercial borrowers, improvements to the overall financial health of a business will be achieved in a pleasantly surprising number of cases. Keep in mind that in many cities and communities, one or two banks frequently operate in a near monopoly environment. When small business owners have literally been forced to find new business finance options, they are often pleased to discover that they can not only replace existing bank financing satisfactorily but also improve their bottom line in the transition.

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