8 Aug 2017

Financing Success: Finding funding when the bank turns you down

For businesses large and small, a loan may be needed to overcome financial distress, purchase real estate, or acquire equipment to make their jobs easier. Business loans come in all sizes and for use in every aspect of business. Depending upon the size, age, and niche of your business, you can find available funding for every financial need that you can think of. The problem isn’t the availability of funding, it is the turndown rate of traditional banks that makes obtaining these loans so difficult. Businesses which have been turned down for a loan by a traditional bank often meet their ultimate end through failure. This is because business owners and representatives do not realize that alternative lending options exist and that they are easier to obtain than you may think.

What is Alternative Funding?

Dominion Lending Centres Leasing provides financing options for businesses who have been turned down for a traditional loan or for businesses that do not meet the requirements for a traditional loan. DLC Leasing matches businesses with lenders and investors within their network to provide funding outside of the traditional finance institutions. Brokers will assist business owners in finding the right loans to suit their needs and they will help with the application process as well.

Alternative funding is often grouped into specific niches. Lenders and investors will provide funding for certain needs rather than generalized financing. One lender may choose to provide funding for businesses which are in the construction field while another may choose to provide funding to businesses in retail or food service. This choice will often reflect the resources and network of the lender and will give the borrower a greater picture of where the money is coming from.

What Type of Loan Do You Need?

Every business is different and the needs of those businesses vary just as much. Where one company needs funding to pay for employee wages or utility bills, another may be looking for funding to purchase another location. The size of your business will be a determining factor for the amount of funding that you can receive. A larger business, with more income, will receive a larger loan where a small business will receive a lesser amount. Besides the size of your business, your loan broker will need to see detailed financial records, copies of your tax statements, and may even need to evaluate your accounts receivable.

When applying for a loan of any size, it is important to know what type of loan you need ahead of time. Here is an example of some of the most popular business loans available:

  • Equipment loan – Funds are used to purchase equipment for business use. Either to replace old equipment or to upgrade to more modern equipment. This can be used for large machinery and production equipment as well as office and restaurant equipment.
  • Real Estate loan – This type of loan is used to purchase real estate for business use. It cannot be used for personal real estate and will likely be calculated based on the business income.
  • Hard Money loan – Typically secured by real property and are often a few months to only a few years in length. Hard money loans provide funding to assist in a temporary financial situation or while your business is waiting for long-term financing to be approved
  • Accounts Receivable loan – The amount of this loan is based on your current accounts receivable and can usually be used for any financial needs of your business. This type of loan provides funding to help you get through financial distress because of money that you are waiting to receive.

Once you have decided the type of loan that your business needs, you will need to find a reliable, honest and knowledgeable commercial finance broker to work with. Research your broker to make sure that you are protected throughout the entire process.

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Jennifer Okkerse

Jennifer Okkerse

Dominion Lending Centres - Director of Operations, Leasing Division
Jennifer is part of Dominion Lending Centres Leasing Division based in Port Coquitlam, BC.

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