The
Difference Between Bank and Non-Bank Financing
Obtaining
a bank loan can be a long uphill struggle. National
Banks would focus on borrowers with high earnings,
excellent credit history, strong balance sheet and
predetermined debt service ratios.
Non-bank asset-based lending attracts those companies
which would not qualify under national bank lending
standards, which may apply to certain borrowers with
high leverage, negative net worth, recent losses, and
those faced with fast growth/expansion needs. Under
traditional lending guidelines these borrowers would not
qualify.
Non-bank lenders in determining the lending criteria of
a potential borrower would look at the company's
business model, good diversification within the
receivables, the basic capabilities of management, and
the ability to generate eligible sales.
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Asset
Based Lending for Continued Success
