Bridging the Disconnect Between Banks and Borrowers
US Capital Partners’ approach to small business lending bridges the divide between traditional banks and borrowers, thereby providing optimal and efficient financing solutions.
Traditional banks have been eager to limit their loan exposure, but have simultaneously been under strong and mounting pressure to lend to small businesses. Many have responded to these conflicting pressures by reporting that there are simply not enough smaller businesses looking for loans that meet their lending criteria. Meanwhile, smaller businesses continue to report that they are being turned down for loans, or that loans have been called in early or availability suddenly reduced—often despite good business performance.
Smaller Businesses Seeking Financing
This seeming paradox in fact highlights something important: an ongoing divide between traditional banks and borrowers. Evidence suggests that there continues to be strong demand for loans. According to one recent report, 39% of businesses with annual revenue of $5–100 million attempted to raise outside financing in the past six months. The difficulty is that many such businesses don’t know how to find the right lenders for their particular needs. Also, when they do approach a lender, they often don’t know how to present their application in the most favorable way, from a lender’s perspective. As a result, their application is rejected, or they don’t receive the best availability and terms.
Traditional Approaches to Small Business Lending
Meanwhile, traditional lenders may not always take the trouble to properly understand a business. This is because they tend to view themselves solely as “lenders,” rather than as “business partners.” Consequently, some banks will fail to adopt a strategic perspective that furthers the customer’s long-term interests. As a result, they may set up financing structures that are short-term in outlook and that in the end constrain the company and hinder its growth. Also, they may ask for more collateral than they actually require, or impose covenants that create unnecessary problems for the business later on.
Adopting a Partnership Approach
US Capital Partners, LLC recognizes that what small to lower middle market businesses need is not simply short-term financing, but an ongoing partnership that allows them to prosper and grow. A lender that understands your business is less likely to bail out if your company meets any unexpected challenges down the road. By understanding your business, US Capital Partners is also able to maximize your availability. US Capital Partners takes a strategic approach and places its best financing technicians at your service. As a direct lender, arranger, and co-lender, it has full flexibility to engineer optimal debt and equity financing solutions for your business.