Solutions for the Small Business Financing Puzzle

by

Stephen Bush

The current commercial loan stakes for commercial borrowers could not be higher because their business survival could very well be hanging in the balance, and the comparison of small business financing to a puzzle is not meant to diminish the critical importance of success by business owners when they encounter commercial lending difficulties. The practical thought for using a puzzle analogy in this article is to help in describing a complex commercial financing and working capital management situation in a more understandable fashion.

This analogy provides an invitation to evaluate the commercial loans puzzle represented by commercial lending challenges as something that tests the ingenuity of solutions by small businesses. An increasing number of commercial borrowers are comparing what they are finding to a puzzle with pieces scattered everywhere when reviewing the current small business finance environment. A reasonable reflection of the underlying problems that cannot be ignored by a prudent business borrower is provided by the ongoing descriptions of commercial financing in terms of solving a puzzle. Such an analogy no doubt also reflects the growing confusion represented in small business owner interactions with their current bank concerning available business financing options. Recent experiences by many commercial borrowers with their business banker probably resemble a constantly changing level of difficulty for an already confusing small business finance puzzle. It has become a common experience for banks to take over two months for a working capital financing process that should realistically be completed in three weeks or less, and in many cases even then the lender does not complete the process for providing the requested working capital to the business which has been waiting without any awareness that funding might not be finalized. Suggestions that commercial lenders have misrepresented what is required to finalize commercial loans are emerging in too many reports for borrowers to ignore. For a number of years most business financing has been more complicated than borrowers realize. Primarily because the eventual results have changed so drastically, recent events have made these complexities more obvious. It is situations like those noted above that cause business borrowers to feel like some of the required puzzle pieces have been removed from the board. Because fewer banks are now providing small business financing, that is in effect exactly what has happened. A business owner is indeed likely to feel as if the commercial finance puzzle pieces have disappeared when this happens with the bank that a business has previously relied upon for their small business finance needs. By continuing the puzzle analogy, there are two practical options for commercial borrowers to analyze and consider. First, in an approach which can lead to a small business finance puzzle which will involve “fewer pieces” if executed successfully, business owners should assess the potential for a reduction in their commercial debt requirements. Second, by looking for alternative commercial lending sources, small businesses should attempt to find the “missing pieces”. Both of these as well as any other realistic commercial loan choices should be thoroughly reviewed with the help of an experienced expert because of anticipated business financing complexities.

Stephen Bush is a

working capital financing

expert who has worked with business owners for 30 years. AEX Commercial Financing Group provides business cash advances and

small business financing

programs

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ArticleRich.com