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The
Difference Between Bank and Non-Bank Financing
Obtaining
a bank loan can be a long uphill struggle. National Banks
would focus on borrowers with high earnings, excellent
credit history, strong balance sheet and predetermined debt
service ratios.
Non-bank financial services companies, such as 1stFactoring, attracts those companies that would not
qualify under national bank lending standards, which may
apply to certain borrowers with high leverage, negative net
worth, recent losses, and those faced with fast
growth/expansion needs. Under traditional lending guidelines
these borrowers would not qualify.
Non-bank lenders in determining the lending criteria of a
potential borrower would look at the company's business
model, good diversification within the receivables, the
basic capabilities of management, and the ability to
generate eligible sales.
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