Conventional financing operates under the premise of the 5 C’s:

Cash, Collateral, Capacity, Character & Conditions

  • Cash refers to the contribution borrower will invest.
  • Collateral refers to assets to be pledged, i.e. home, retirement, etc.
  • Capacity refers to the measurement the lenders use to determine borrowers ability to repay loan. I.e. cash flow, existing debt, etc.
  • Character refers to a borrower’s reputation. i.e. credit report
  • Conditions refer to the loan amount and the interest rate the lender would consider acceptable risk to lend to borrower.

As entrepreneurs we are often willing to sacrifice one or all of these in order to achieve the dream. So what if you don’t have the 5 C’s? Don’t panic, here are 10 options to secure capital from alternative resources:

  1. Factoring
  2. Asset Based Lending
  3. Merchant Funding
  4. Contract/Purchase Order Financing
  5. Hard Money Loans
  6. Debtor In Possession (DIP) Financing
  7. Equipment Leasing
  8. Asset Backed Working Capital/Sale & Leaseback Funding
  9. Business Loans
  10. Micro-Loans

For more information on planning, funding, starting, and growing your business

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Author: Andre F. Wilson Sr., Managing Partner, Altima Business Solutions

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