Small business owners looking for financing have been encouraged by the slight thaw in conventional business lending earlier this year. Unfortunately, banks are still not lending at pre-recession levels which may force many small business owners to see working capital elsewhere.
Bank lending overall has rebounded significantly, nearly 10 percent since 2008. However, small business lending is still 18 percent lower than it was at its peak in 2008. There is a marked difference between lending patterns at small banks, which have gradually increased their number of small business loans, and larger banks that are still reeling from a slew of bank failures at the beginning of the recession.
Lending indexes showing increased small business lending are encouraging, but are also based on unadjusted numbers. Lending increased at nearly identical rates as the number of small businesses in the economy. Another source of small business loans, the Small Business Association, is also lending at lower levels than they were before the recession.
Stricter criteria for obtaining a small business loan have prompted many business owners to simply not try. Pristine credit ratings, a steady history of revenue, and assets to pledge as collateral are all things that every business owner wants, but for small businesses in particular are difficult to actually keep. Women-owned small businesses are at a particular disadvantage due in part to their typically shorter tenure and lower revenue.
If you are a small business owner who needs a fast infusion of cash to maintain your operations, there are alternatives to traditional small business loans that can help your company without the restrictions of a secured loan. Unsecured business loans do not require collateral or a perfect credit score, and qualifying borrowers can obtain up to 90 percent of their monthly sales with same-day funding. Higher interest rates are offset by longer terms.
Of course, the ideal funding option for many small business owners is a small business factoring program that caters to their industry. Instead of creating new debt on your balance sheet, simply sell your unpaid invoices to a factoring company that will advance you up to 90 percent of the invoice within 24 hours! Factoring rates are low, and Factor Finders’ funding partners are competitive nationwide. Approval is based on your customers’ creditworthiness, and you can get started in as little as 3 to 5 business days.