The recession appears to be over based on many reports, but even with small business lending up recently, many of the effects remain.
In some ways, it is a whole new world. Small business owners face obstacles now that were not there just a few years ago, before this most recent recession. Following below are just a few, and some ideas on how to overcome them.
Even the most diligent, successful of businesses took a credit hit during the recession. This can make it tough to get any kind of funding. The financing that is easy to get either has higher rates or terrible terms. The best way to overcome this obstacle is to bide your time and fix your credit. Go over your credit report with a fine toothed comb. Make certain that there are no mistakes, pay your bills diligently, and if you must apply for financing before your credit is in order, use other forms of proof of good credit if possible. Many utility companies will provide letters of good standing when asked, although they do not report to credit agencies.
Banks Have More Stringent Regulations
Many lending institutions were burned during the recession. The ones that are left standing have put much stronger regulations in place in an effort to shore up and keep further losses from occurring. This means borrowers have much more work to do, the process is longer, and fewer are eligible. There is no way around this, but simply being prepared makes a huge difference. Give yourself plenty of time, provide what they ask for as promptly as possible, and be organized.
Community Banks Are on the Decline
Community banks have long be known as friendly to small businesses. The problem is, they are on a major decline. Many have consolidated or closed, causing a reduction in number from 14,000 in 1985 to 7,000 today. Overcoming this obstacle means seeking out community banks when possible, and simply being diligent and prepared if you must use another type of lender.
Regardless of whether you are looking for real estate financing options, financing a law practice, or trying to secure merchant cash and capital, Biz2Credit is the place to start. We offer a comprehensive network of over 1,300 lenders that rely on us to send them quality borrowers. They offer a wide range of financing products meaning there is something for virtually everyone. Visit Biz2Credit today for more information.