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Is Your Company Getting The Funding It Needs From The Banks?
By staff writer

Are businesses in need of cash getting the funding they need from the banks? It has always been more difficult and sometimes impossible for struggling companies to borrow money from the banks unless they show the bank that they are making money.

In addition to good credit, a company has to meet certain financial ratios, including that ever demanding ratio called the Debt Service Coverage Ratio (DSCR) or the Fixed-Charge Coverage Ratio (FCCR), these are numbers the bank or lender establishes after reviewing the bottom numbers of your company’s financial statement, which tells the bank if you are a good risk to pay the loan back.  And with banks there is little flexibility, they are FDIC regulated institutions with much tighter and stricter underwriting criteria.

However, there are still funding options for these companies that cannot borrow from the banks due to financial or credit difficulties. Companies about to give up on funding should realize that they may be sitting on readily available cash in the form of accounts receivables and/or purchase orders, and non-bank lenders are very willing to fund your business on these assets irrespective of your company’s financial or credit situation.

Choosing a non-bank financial institution can offer flexibility to a company that failed to meet the bank’s financial or credit criteria, a non-bank lender looks at the bigger picture, including your projected financials and the credit strength of your customers, and with these funding options you are not creating debt.