We would like to touch further on our “Banks Not Servicing Small Businesses” blog from last week. As we mentioned, upon first hearing about Synergy Merchant Services’ cash advance program, many Canadian business owners reply that they can simply “go to the bank” if ever they are in need for money. This common misconception, we have come to understand, is based solely on the familiarity that people have with associating banks with money and nothing more.
The truth of the matter is, a small business owner in Canada cannot simply “go to the bank” for money anymore. In the small business section of yesterday’s Financial Post, John Greenwood unveils the glaring realities of today’s funding policies practiced by banks. In his article “Stifled Growth”, Greenwood outlines just how difficult it is for entrepreneurs to grow their businesses with the help of a bank.
One of the many things that our licenced funding specialists encourage our clients to use their cash advances for is renovations. Greenwood presents the story of Mark and Christina Bridgren, the owners of a three year-old sports and gardening equipment store who recently decided to do just that.
Like most small business owners in Canada, the Bridgrens figured that they could just “go to the bank” to secure a bank loan in order to grow their business, which had been enjoying increased success through the sales of their much sought-after inventory. Thinking that a loan of $25,000 would be just about right for their renovations, the Bridgrens had their sights set on taking their business to the next level.
The mid-40s couple was told by their local bank, however, that they had not been in business long enough. They tried another bank, only to be told that Mr. Bridgren’s credit rating was not up to snuff. Apparently, a late credit card payment from four years prior was enough to do the Bridgrens in. That is, of course, unless the couple was willing to put up their family cottage as collateral.
Mr. Bridgren’s response says it all: “I told them to go fly a kite. It’s so frustrating. Our customer base is soaring and we have the opportunity to grow, but you need a little capital to make it all come together, but the banks won’t help you.”
Sadly, many other Canadian business owners are finding themselves in the same boat as the Bridgrens. Their trusted banks, with whom they have maintained long-standing relationships, are continually shutting them down when seeking the necessary assistance to grow their businesses.
Meanwhile, Synergy Merchant Services stands steadfast behind its policy to require no collateral, liens or credit checks for the purpose of approval for our merchant cash advance program. With so many entrepreneurs in need of extra working capital to help their businesses grow, it appears as if going the traditional bank route is only cause for stifling that growth.