Access to Small Business Loans Has Improved over the Past Decade

Posted on by Forest in Banking, Guest Posts, Saving Money & Finances

There have been two severe business cycle retrenchments in the past decade, but even though our credit markets have tightened considerably as a result, there has been a revolution of sorts in how small business loans can be accessed.  The growth of the Internet has broadened the playing field.  No longer are banks or government secured financing the only paths to consider.  Small business loans can also flow from a variety of private sources with favorable terms and conditions.

Today’s small business CEO will most likely be a former marketing executive or an IT professional, capable of driving all-important sales growth or building the latest electronic innovation that will sell itself.  Both of these types, however, rarely have the financial acumen necessary to approach and access the financial community when it comes to acquiring adequate operating capital, the primary reason most young businesses fail.

Access to adequate financing is critical at the beginning of a company, but it must be continually managed throughout each phase of its development.  Following the recent recession, many banks have balance sheets bloated by toxic mortgage loans, and credit ratings for small businesses have dropped so precipitously that banks are less willing to support additional risk in this arena.  High-valued collateral and heavy owner guarantees are demanded, and these requirements make it even more difficult to obtain credit from other venues due to their all-encompassing nature.

Private monies seeking higher returns are filling this vacuum.  There are numerous search engines on the Internet that will help you access small business loans from this market.  Approvals can occur in a few days, not weeks or months.  Here are a few more of the benefits professed by these new lenders:

• Most state that small business or personal loan approvals will only take 48 hours;
• Most loans do not require collateral or assignments of home equity values;
• There are no restrictions on the usage of funds.  Banks typically require that only hard assets may be purchased, leaving working capital issues unfunded;
• Experienced professionals will help you, most likely former employees of banks that have been merged or closed;
• Terms are more favorable, especially regarding fees or prepayment penalties;
• Applications are simple and 100% satisfaction is guaranteed;
• Lastly, you do not have to leave your home or office to access funding.

Small business owners have an abundance of issues and priorities to deal with in running their chosen enterprises, but accessing adequate financing need not be the daunting task that it has been in the past.  The Internet has changed the rules and allowed the private sector to play an expanded role in the process.

This is a very interesting guest post. I’d love to hear any thoughts or comments you have related to it.

Tags: small business loans