In the first part of my blog post about funding small business, I talked about a Wall Street Journal (WSJ) article that shared how banks were often still denying credit – despite the loosening of the credit market – for companies with under $1million in annual revenue. And, companies that exceeded that amount could be turned down for small business funding if they were in the “wrong” industries.
So, the question is, where does a “small” small business owner in the “wrong” industry go for cash to meet ongoing payroll (and other needs) to continue to grow? What can you do when the bankers are “actively recruiting the smallest of businesses –not necessarily to extend credit, but instead to process their deposits and help manage their cash flow” – so when they fit the bank’s definition of “small” and “they become ready for a loan or line of credit, the banking relationship will already be well-established?”
Funding small business: Look to invoice factoring for relief!
The answers may be found with various asset-based-lending products like invoice factoring, purchase order (PO) financing, merchant card advances and inventory fund. So, if you find yourself among the 59% of company owners who tried to get credit for business in the first half of the year and weren’t successful (according to the WSJ article), watch for additional blog posts describing these and similar products that could unlock additional cash flow for your company.