Firms With Collateral Gain an Edge

January 21, 2011  |  

(Wall Street Journal) — For small businesses, collateral is taking center stage when it comes to grabbing the attention of banks as they begin to loosen their purse strings.  Companies that hold tangible assets like buildings or other types of property are getting a first look by banks, even when their cash flow and creditworthiness aren’t as strong as businesses with less collateral.  BoeFly.com, which connects lenders to borrowers, says many of the 570 institutions that use its service are favoring loan applications from restaurants, hotels, manufacturers, retailers and real-estate companies, all of which are typically asset-heavy. “That doesn’t mean they’re getting the loans, but they are getting a look,” says BoeFly Chief Executive Bobby Tannenhauser.

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