Thought Leadership on Lending by Gibraltar Business Capital.
With the state of commerce today, small businesses may no longer need to turn to banks as their first choice for financing. Niche, early-stage and fast-growing, undercapitalized middle-market companies, already squeezed by vast gaps between payables and receivables, can’t effectively remain competitive without access to working capital. The result? Small businesses are turning to faster, more flexible non-bank lending sources to leverage new technology, grow business and simply keep pace with the competition.
Part of this trend is due to increasingly restrictive bank loan requirements, which may disqualify a commercial candidate because of issues like relatively poor credit, business immaturity or seasonal revenue fluctuations. The other proclivity stems from a positively shifting perception of highly adaptable “alternative” financing structures such as:
· Asset based lending: a revolving line of credit advanced against commercial assets such as accounts receivable or raw and finished goods inventory
· Factoring: a line of credit in which availability is generated by the sale of A/R at a discount to the finance company
· Capital advance: capital advanced on a portion of a business’ future sales or revenue
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