A common expression used in the alternative lending industry is “bankable”, to describe whether or not someone has the ability to get financing from a traditional bank. In a small business lending environment, we consider “bankable” to mean a loan amount that is sufficient to meet the borrower’s goals and a time to close that is actually convenient for the company.

I recently spoke with a small business owner I’ll call Jasmine, who had visited our website and received a prequalified offer that she decided to move forward with. As usual, I gave her a quick call to follow up and to learn more about her business and funding goals. After getting a sense of her very impressive cash flow, sterling personal credit, and 5 years in business I asked Jasmine the following:

“Have you tried talking to your bank? I’ll be the first to tell you, if you can get a traditional bank loan you should take it because they have the best rates around.”

As it turned out, she didn’t need the funds right away and could afford to wait out a bank process that was measured in weeks and months. I let her know that if the bank didn’t come through with an offer that made sense, that Dealstruck would be a fantastic option.

In the small business loan market, there are what I call BLINMOs or Business Loans In Name Only. Often, the business owner secures cheap funding pretty quickly from the bank by taking advantage of his or her (excellent) personal credit and outside net worth. The downside is that the loan, while technically a business loan, is underwritten more like a consumer loan and doesn’t have any underlying relationship to the economics of the company. Consequently, the loan or line of credit is often very small in relation to the overall size of the business. An inexpensive, unsecured $40,000 line of credit from a bank might be nice to have, but won’t necessarily move the needle for a company doing $100,000 or more in monthly sales.

However, if you can get traditional bank credit in an amount and timeframe that makes sense, you should absolutely consider it. As our CEO Ethan Senturia recently said at the 2014 Finovate Spring conference:

“Our greatest victory is when we’ve graduated our borrower into a relationship with a bank.”