Do existing businesses have more financing alternatives than start-ups?
The lenders are very conscious of just how difficult the past few years have been for businesses. A business that has a good track record through difficult years makes a good impression on the lender, increasing the chance of obtaining financing for the new project. If the business has survived or maybe even grown during these past three years (revenues have grown, remained steady or recovered/now are stable, adjustments were made during the downturn to protect the bottom line, and the last four quarters show improvement) then a strong case can be made that the new project the business owner envisions can obtain financing.
Lenders always prefer seeing historic cash flow that is sufficient to service the existing debt and any new requested financing. But if the owner is able to demonstrate how the new project will increase cash flow through projections based upon reasonable assumptions, then there are programs such as SBA loans. SBA loans enable lenders to approve the requested financing based on those projections and not just on historical cash flow.
Do existing businesses have more financing alternatives than startups? Yes. While the startup is generally limited to a government guaranteed loan or a fully secured loan by personal assets, the existing business can tap into any of the standard commercial loan products and can even borrow against AR (accounts receivable), existing inventory, purchase orders, and more.