What is specialty financing?
Specialty Financing is a finance activity that happens outside the traditional banking system. Specialty financing is offered by non-banking lenders to small and mid-size businesses. Specialty financing is helpful to businesses having a hard time getting a loan from a bank.
What do specialty finance firms do?
In certain cases, banks’ strict policies prohibit them from lending to certain businesses. In these cases, specialty financing plays a crucial role by providing funds to businesses. Lending firms assess the company’s situation with balance sheets, cash flows, and other data to make a more personalized decision than a bank could
Why do these firms lend money when banks refuse?
Banks have a traditional “box” in which several borrowers may not fit. This does not necessarily mean the business is not going to be successful, so they turn to specialty finance firms.
Specialty financing firms take a higher risk by lending money to these businesses. Specialty finance firms reduce this risk by requiring collateral. Personal guarantees are required when the loan amount exceeds the value of the collateral.
Benefits of Specialty Financing
The largest benefit of specialty financing is that the businesses get money when they need it the most. When banks cannot help a business, specialty financing firms step in.
If your business is also struggling and are looking for options, talk to us about specialty finance.
Give us a call at: 646-629-6490.