Far too frequently, small and mid-sized businesses are being rejected from traditional bank financing. The reasons vary for each business - too small, not profitable enough, too young. One thing each of these businesses has in common, however, is the need to Get Bank Ready.
We think of Getting Bank Ready as using alternative forms of capital to prepare your small business for a traditional bank loan.
This goes beyond lending and includes utilizing different resources to improve your company. If your business is in need of this guidance and is looking to Get Bank Ready, try following these three tips:
1. Finance your working capital needs.
Pick a lender who understands your business and is aligned with your business goals - it is especially important to pick a team that will work closely with you and build a long term relationship. Try going beyond the fast-cash, online options (find out why here) and choosing a company that tailors solutions to each client.
2. Leverage your lender's resources.
Once you have picked an appropriate lender, be sure to use their resources and professional network. These can include outsourced bookkeepers, operational consultants, legal counsel, and investment bankers or advisors. However, your lender's network should extend beyond this. Lenders should also be able to connect their clients that may benefit from each other's experiences, investors and services.
3. Continue executing on your business.
Maintain that growth and focus on getting the business profitable. Banks will want to see a certain level of maturity in your reporting and at least two years of profitability. Once you've reached that point, you are Bank Ready. Use your lender's network again, and when the time is right, get proper introductions to a bank that will best suit your business in the long term.
By following these tips, you will find that not only can asset-based lenders provide financing, but also guidance based on their industry expertise. At Dwight, we leverage these resources and think of ourselves as more than just lenders - making it our goal to fund our clients' growth and connect them with our bank partners as they qualify or bank financing.
Dwight Funding looks to partner with great companies that are not yet Bank Ready by providing better working capital solutions. We seek to fill the gap that banks have left in the working capital space due to size, industry, profitability, or otherwise.
Book a call with Dwight Funding today or call us at 212.960.3750 to learn how we can help.