2 Secrets Your Banker Won't Share

SECRET 1:

Banks are more than happy to have you use your line of credit for short term liquidity issues or for ease of use, but with rates at all time lows companies should not finance long term assets with their line of credit.

A company’s line of credit with their bank is on a floating rate and when rates start to climb, and they will, you don’t want to be stuck with a long term asset and your payment going up each month. Instead, a company should obtain a long term lease to take advantage of the historically low interest rates that Connext can provide.

SECRET 2:

The second thing your banker won’t tell you is that at some point a company will max out their ability to receive loans. This is especially true if the company continues to borrow money for long term assets. Your banker will continue to encourage you to use them to fund all of your transactions. However, you wouldn’t want just one company as a customer so why would you want just one place to get access to capital.

It is true your banker is the lifeblood of your company, but bank should be used for short term liquidity only and a few long term borrowings. Connext Financial can help your company obtain long term financing while allowing you to retain your ability to gain access to short term liquidity from your bank.

If you found this article interesting, you may want to read the following:

• 3 Ways Banks Evaluate Your Credit
• Why Is It So Hard to Get a Loan From My Bank?