Quality of Loan Portfolio

A high quality loan portfolio means that the bank?s loan loss experience is at or above levels set by regulatory agencies. One can infer that the bank therefore takes fewer risks. Bankers are not supposed to be entrepreneurial or take risk. A banker has never been rewarded for taking risk! The banking system rewards those who can decline any borrowing request outside of the underwriting parameters. Loan portfolio quality that?s high = low loan accessibility to business owners. It stands to reason that banks are not risk takers based upon the low returns they are willing to accept.
Banks with four star excellence ratings seek out commercial customers who are stable and have limited need to borrow. The other 72% of business customers are left outside the circle of these banks. Where do these businesses turn to Cash Flow the Working Capital needs of their business? Where do they go to fund opportunities for growth and development of new market niches? More often than not they turn to the widely accepted world of non-traditional funding sources - preferred SBA lending companies for real estate and fixed asset needs, leasing companies for equipment needs, and Factoring companies for Working Capital needs. These non-traditional funding sources evaluate opportunities to participate by lending funds to small & medium sized businesses. Non-traditional lenders rates on borrowed funds may be higher than traditional bank rates, but their mission is to employ funds to obtain a return, not to let cash sit idle on the sideline in order to obtain a four star excellence rating. Their pricing reflects the perceived risk. And, they are not restricted by regulatory bureaucracy or fear of losing their four star rating as banks are.
In this ever changing world, business owners are advised to explore opportunities outside of the traditional financing channels. Before a need arises a business should be familiar with alternative funding sources. And perhaps, when your bank informs you that they continue to achieve a four-star excellence rating?it would be wise to investigate your options pertaining to Working Capital and Cash Flow solutions