There is a sad but true story happening all over Canada this Valentine’s season and that is the story of bankers breaking up with their clients. Broken dreams, confusion, denial, anger, and frustration are the range of emotions business owners can feel after being declined for a needed loan or when lines of credit are denied or shut down.
It does not have to be this way! As a business owner you need to know there are more fish in the financing sea – lenders who, regardless of your business cycle, will think your business is amazing and provide you with capital customized to your cash flow needs. In fact, prudent business owners often keep a strong banking relationship for certain products like lines of credit and current accounts while using non-bank lenders to finance and lease capex purchases.
Dating references aside, diversification is still a winning strategy that affords owners more control over their business. No one lender is meant to be all things for its clients no more so than your business is not meant to be all things to your clients. Statistically banks have higher credit decline rates, so drop the guilt or feelings of rejection and understand your bank simply isn’t always the best fit for all your needs. Here are just a few of the inherent risks when dating – I mean borrowing, from the bank for Capex spending:
- All credit lines are due on demand.
- More cash down required.
- Short notice periods to pay back loans if needed.
- Continual financial reviews with financial test that needs to be met.
- Capex bank loans will reduce access to important revolving lines.
When you go outside the bank to finance equipment and capex purchases you can access a wide range of lending sources and options like:
- 100% financing
- Asset specialization
- Non-demand and non-callable debt
- Fixed rates and terms
- Soft cost financing
- Seasonal payments
- Potential accelerated tax benefits
- Purchase new or used from nearly any source
In business there is no need to be married to just one lender. As a business owner your love for your business and its success means you may need to work with more than one financial partner and the best fit can often be outside the bank.
Patron West works with multiple lenders who would love to work with your business right now – lets make this Valentine’s the best one yet for your business and call us for a free consultation. We have been arranging successful client/lender matches for nearly 20 years!