Small Business Lending Slowly Recovering
In the year following the recession, small businesses are still seeing the recovery of financing and lending. The impact has left many businesses needing more options for financing. The Wall Street Journal recently reported that small business lending has been slow to recover, with stricter standards and requirements boxing some out of the market.
For this reason, alternative lenders like National Funding have stepped in to help small businesses get the working capital they need. Forbes reported that there is actually a boom in small business lending, signaling that now may be a good time to apply for a small business loan. According to report from Biz2Credit, the chances of getting a small business loan at a big bank are just 19 percent.
By comparison, small businesses that are qualified have a much better chance of getting a working capital loan from alternative financiers, such as National Funding.
The Journal reported that although the economy has improved over the last few years, financing for the 28 million small businesses in the U.S. remains a challenge. However, there are some good signs, according to the Journal. Citing data from the Federal Reserve, business loans were up 9 percent on March 31, totaling $2.49 trillion. During the second quarter of this year, loans and leases grew at their highest quarterly pace since the end of the financial crisis. Data shows that lending standards have remained tight for small businesses, but have loosened more for large and mid-size companies.
And yet the uptick of small business lending from sources other than big banks should be an encouraging sign for owners, as small businesses create millions of jobs around the country and contribute to the overall economic recovery. As small business owners seek to expand, they can be encouraged by the steady improvements across lending conditions.