Startup Financing: When Loans Are Not In The Picture

November 23, 2017 by CNH Finance, LP in category “Financing”

Launching and growing a startup business can be challenging. The lean business model means there is lower overhead, so entrepreneurs can focus on products, sales, and marketing. Yet finding adequate startup financing is difficult, and many traditional lending channels reject most loan applications. However, enterprising entrepreneurs are finding startup financing in unconventional places.

Banks And The Risks Of Traditional Startup Financing

Startups have been on the rise for almost a decade now. In fact, the economic downturn in 2007 almost necessitated the model, because operational expenses are minimal, allowing for higher profitability. But that same recession was also felt by banks, and they have since become more wary about approving requests for startup financing. Many traditional lending channels consider startups to be too risky, because most startups do not have an established financial history, and many financial institutions do not understand the business model, nor the products and services being offered. Regardless of bank decisions, there are still sourced for startup financing that do not involve debt or the long waiting times for arbitrary loan board decisions.

Asset Based Financing For Startups

Startup owners are turning to asset based financing for a source of working capital. Asset based financing created a revolving business line of credit around the value of items such as equipment, receivables, inventory, owned facilities, vehicles, and more. This revolving line of credit does not place any debt on the books, and helps to increase the purchasing power of startups, without needing to rely on traditional loans. Using fixed assets to create a renewable source of startup financing allows entrepreneurs to get more stable footing in the marketplace, while sidestepping the restrictions of traditional financing.

Startup Financing That Promotes Growth

Leveraging the value of fixed assets for startup financing gives entrepreneurs access to funding which grows along with their businesses. As startup owners increase sales, acquire equipment, and purchase larger facilities, the amount of financing available also grows. Instead of relying on loans and racking up debt, entrepreneurs can preserve their credit ratings and get access to increased startup financing simply by running and growing operations.

Learn More About Asset Based Financing For Startups

CNH Finance is a leader specializing in asset based lending solutions. If you are looking for startup financing, and want to avoid the red tape and debt of traditional loans, contact out offices. We will work with you to devise an asset based financing strategy to ensure long term success.

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