Finance & Lending


01 30 2014

01 30 2014

Small Businesses Able To Obtain Loans

As the country emerges from the depths of the Great Recession, small businesses are finding it easier to get the funding they require than in the past several years. According to data from the National Federation of Independent Business, as reported by USA Today, only 4 percent of small-business owners indicated that all of their credit needs were not met in December.

It seems that small businesses are able to obtain low-rate interest loans more easily now than several years before.

This information is helping to boost the confidence of small-business owners, as the NFIB’s small-business optimism index jumped to 93.9 in December, up from 92.5 the month prior and 91.6 in October, reported Dow Jones Business News. Small-business owners are looking forward to stronger economic conditions. They indicated that their sales will increase at a faster pace than inflation and, as such, are beginning to increase their capacity to be ready for the predicted business.

According to the report, 64 percent of small businesses made capital outlays during the last half of 2013, which is the highest percentage for nearly a decade. Of the companies that reportedly made investments, 43 percent bought new equipment, 26 percent purchased vehicles and 16 percent expanded or upgraded their facilities. In addition, the end of 2013 saw the best hiring statistics for small businesses since early 2006.

There are a few factors playing into the fact that small businesses are finding it easier to obtain loans than in the past several years. However, it mostly comes down to the market. After the 2008 financial crash, lenders tightened their standards. As many businesses, large and small, were not showing the necessary profits to qualify for loans, they were denied funding. In addition, it is not unusual for small-business owners to leverage their home equity as collateral against a loan. When the housing bubble burst, home values plummeted, leaving homeowners without the necessary equity for a small business loan.

Small business loans and the economy

The benefits for small-business loans go well beyond growing companies. The Support Center, a community development financial institution, recently released a new report examining the economic impacts that small businesses have on their state’s economy.

According to the report, funding money into small businesses allowed the local economy to grow and flourish. Not only did the small businesses save the state millions of dollars and even provide significant profits, but it saved and created hundreds of jobs.

Still, though small businesses are continuing to flourish in this recovering economy, they also need to continue to focus their funds on things that matter. They can save money across the board through smart choices like leasing business equipment and other smart options.

While small businesses are seeing some success through traditional banks, many others are finding the funding they need by looking to less-traditional lenders. Any entrepreneurs or small-business owners who need a cash advance for business should reach out to National Funding today to explore their options.


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