ExpertCEO

I've been haggling with my bank (we have an SBA loan with them) to get a receivables line of credit. I've filled out the paperwork (almost as bad as the SBA), collateralized my youngest child, etc. Now the banker tells us that "you guys have good receivables but the chief credit officer does not the line being limited to one receivable." I've got a couple more forthcoming, but I can't help but think I'm getting the runaround here.

Do the board members have recommended lenders?

Thanks.

I would suggest you contact Sand Hill Finance here is a link to their website:
www.sandhillfinance.com/default.htm

Credit lines have become more challenging for all small businesses. You may have a problem getting a line secured by receivables unless you place your depository (operating checking) account with the new bank. Likewise, you may violate your SBA loan covenant by moving your depository account from your current bank. So you may have to play whatever game your current bank is playing.

If you're shopping for a bank for a new line, I suggest smaller community banks -- those with 3-10 branches. They're generally more flexible. If they say you have to have a depository account, keep in mind that 2 operating accounts wouldn't be unheard-of, especially if you have EFT capabililties between the two.

You'll need to get your story dressed up, put together a complete "package" on your company, and call on about a dozen banks.

Here's an article you might find helpful: bit.ly/9F5iHO

A completely different idea? Borrow from another business -- forget the banks. Lots of people are. Article: bit.ly/cmkIwc

I agree with Terry's comments. Life has become a lot harder for small businesses and you will likely have to jump through a lot of hoops and do a good job marketing yourself. I've had a long term relationship with Comerica's Technology and Life Sciences group, including a receivables line, and would give them high marks for being supportive and understanding of start-ups. Beyond that, go with Terry's recommendation and find the small, business banks in your area.

Thanks for the insights, guys.

The bank that did the SBA loan is a local community bank--we found this financing at a time when nobody else would make these loans.

Given the possibility (stated below) that this bank may consider our receivables as collateral on the SBA loan, it seems most sensible to pursue the credit line with them very hard before looking elsewhere.

Morgan

As an update, our bank is moving forward with the line. It took a little cajoling, and a couple colleagues tell me that I should take the guy to lunch! Additionally, we'd been doing the bulk of our banking through BofA, and as an olive branch, I moved our funds into the smaller bank. I'll breathe a sigh of relief once I'm funded!