If entrepreneurs were getting a small business loan a generation ago, they may have gone to their nearest bank. However, if numbers from non-traditional lenders are any indication, more and more business owners are turning to other sources to secure funds.
The Main Street Pulse Report found that applicants for non-traditional loans jumped more than 300 percent during 2013 for one online lender. Residential construction contractors submitted four times as many applications for loans in 2013 compared to the year before, which can be attributed to both the popularity of non-traditional lenders and the rebounding economy.
Other industries that put up impressive numbers when it came to 2013 loan applications included restaurants, with a 102 percent spike, and the auto repair industry, which saw a jump of 95 percent. According to the report, these numbers are indicative of the pent-up demand for financing coming out of the Great Recession coupled with the fact that traditional lenders are failing to meet the needs of small business owners.
Predictions for a strong year
The spiking number of non-traditional loans over the past 12 months is just a small piece of the economic puzzle, as there are plenty of indicators that should give small-business owners cause for optimism. Crain’s New York spoke to Evan Stein, the owner of CMIT Solutions, an IT sales-and-service franchise, who has a finger on the pulse of the small-business sector.
Stein said that, from what he can see, budgets for small businesses are on their way up along with plans to hire more employees. In New York City alone, 110,000 jobs were added between November 2012 and November 2013. James Brown, a labor market analyst for the New York State Department of Labor, told Crain’s that small businesses are a huge driver for the local economy.
“The city is on track to post its third-straight year of 2 percent-plus growth in private-sector jobs,” he said. “The only better period was four straight years between 1997 and 2000. This current growth was achieved even though the city’s large financial sector has been basically treading water the last two years and is not expected to improve significantly in 2014.”
While it’s clear that small businesses are on their way up, many business owners are not finding the financial assistance that they need through traditional banks. If entrepreneurs are looking for working capital, contact National Funding today.