Short Term Working Capital Financing

by

Allan Michael Taylor

Short-term small business financing has become difficult to obtain for most business owners. For business owners facing this situation, it might appear that all is lost if their bank cannot help them. Instead, learning that your banker is not up to the task of providing short-term working capital should simply be the starting point for seeking new and effective sources that are capable of providing sound commercial mortgage help.

There are at least five significant factors underlying the current difficulty for business borrowers attempting to obtain short term financing. Three of the factors are discussed below, and all of the issues are related to recent commercial lending chaos seen nationwide. First, unsecured lines of business credit have all but disappeared for many businesses. This is occurring in many areas and in most cases is due primarily to a bank decision to eliminate this kind of business financing rather than the payment history of the business owner. In a typical situation, the bank reducing or eliminating a commercial line of credit will provide the business owner with a 30 to 90-day period to make new financing arrangements. Second, bank requests for more commercial financing collateral are now a frequent occurrence. Providing additional collateral in a depressed economy is not feasible for most businesses because there are likely to be reduced valuations for commercial property and many other business assets. Third, many regional and local banks have exited commercial lending. Whether they have publicly announced it or not, a significant number of banks operating nationally appear to have made a similar decision. Many small businesses have been impacted negatively by at least one of the factors noted above. Although any business owner who has been (or will be) victimized by what appears to be confusing and perhaps unfair lending practices might not agree, there are some positive developments which will help many businesses. Although commercial banks have largely abandoned their previous commercial finance programs, new business lending options are rapidly emerging to fill the large void left by banks no longer active in this field. The most promising of these are new and flexible approaches to short-term working capital loans. Seeking the counsel of a business finance expert who will offer a candid assessment of the realistic prospects for a business seeking short-term working capital financing is a prudent decision because confusion can result for even the most experienced business owner. Small business owners should seriously consider the more effective options for small business financing and working capital.

Stephen Bush provides

working capital management

advice and

business financing help

. Steve specializes in

small business financing

and commercial loan programs.

Article Source:

ArticleRich.com