Covenant Breach
This is normally missed by borrowers. Every loan contract has clauses requiring the borrower to meet certain requirements. Everyone is aware of payment requirements. However, many contracts also contain financial requirements and clauses that forbid certain actions or conditions. An example is maintaining a minimum debt to income ratio. There are many others. You may have inadvertently violated one of these covenants. That prevents you from any further borrowing and may result in your loan being called.
Because banks are so heavily regulated , they must be careful to ensure that they are complying as well as being diligent in reducing their risk exposure. They are,
after all, responsible for proper care of
their customer’s money. This can make
it difficult for some businesses to qualify for a loan. The alternative financing industry offers a variety of potential solutions, enabling those businesses to have access to the capital needed. They are usually not regulated so they have
more freedom in choosing the type of loans they fund. They also tend to specialize in a certain type of business financing, allowing them to use expertise to customize a loan to a business’ need.
In short, if your business is not quite ready for bank lending, an alternative financing solution may be the answer.
This article was written by Brian Dineen, CEO, Trinity Capital Partners.
Automation and Pallets: Modern Materials Handling’s Latest Survey
No surprise, automation is driving the need for better quality pallets, according to a September 2019 report from Modern Materials Handling. Bottom board issues stood out as being the biggest issue identified in their survey. Laszlo Horvath, director of the Center for Packaging and Unit Load Design at Virginia Tech University, commented that pallet quality problems are increasingly frequently encountered as companies move to automation. They are concerned that the pallets they have been using in the past will pose problems as they migrate to automation. The primary culprits, he said, are low-quality pallets that clog and jam automated systems.
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SEPTEMBER 2019