If you have watched prime time television over the last few months, you would think that business loans are easy to get and literally driving the economy. The large banks, like Bank Of America, are running very heart warming commercials touting their successes and their commitment to the little guy.
The ads run the gamut from Small Town America to the mean streets of Los Angeles, but true to form, they are nothing more than clever marketing strategies to counter the bad press they have been receiving on other fronts. For the chosen few there certainly are business loans available from the big monster mega banks but these are the exceptions and not the rule at a time when small businesses need help.
If you refer back to the countless mentions of the Small Business Jobs Act of 2010, you will remember that this legislation was touted by Politicians as the way to turn the economy around. Getting business loans into the hands of small business owners to hire and expand was seen as the best way forward, and for anyone just interested in photo ops and fluff, it was a momentary political victory.
But, for the small business sector, it yielded little fruit. The business loans programs were certainly a good idea but government red tape and mismanagement clogged the pipeline and the money did not begin to trickle down until early July 2011, a mere 6 months before the program was slated to end. However, the well intended funds were never meant to fall into the hands of the undeserving.
Extremely attractive borrowers were the ultimate target for these business loans so for those trying to stay afloat in this down economy, help was never really on the way. The majority of small businesses who are “burdened” with fixing the economy are drowning in the debt they have taken on over the last 3 years in order to survive. Even the most successful ventures could not have foreseen the rough waters ahead so letting their business credit scores slip and overextending themselves may have seemed like the best option at the time.
But believing that the easy access to capital promised by government officials was on the way was a pipe dream for most, and seeing commercials about how their friends and neighbors are flourishing due to the help of banks with well endowed advertising budgets should be seen as nothing more than time fillers between contestants on Dancing With The Stars. The fact remains that small business owners with decent track records and solid business plans are being routinely turned downed for SBA business loans regardless of what the banking industry’s creative statistics show.
Where To Get Business Loans
Bankers are not shy about pointing the finger at the SBA for dragging their heels but are skiddish on making realistic business loans to reasonably qualified applicants due to perceived risks. Pushing through applications is no longer the goal of originators who are spending more time trying to figure out how to keep more cash on hand as assets.
The only real solution for small business owners to find suitable business loans is to turn to small community banks and non-banking lenders. The community banks are more willing to lend than their larger counterparts but their underwriting guidelines are increasingly stringent. However, the ability to cultivate relationships with local banks will be helpful if not for now, but for the future. Getting on the radar screen of your local lenders can pay off down the road.
For those with less than stellar business credit there are myriads of non-banking lenders out there to serve you. Learning about unsecured business lines of credit might actually surprise people when they discover the friendly terms and ample loan amounts. These types of business loans are generally easy to secure, easy to apply for and have lightning fast turn around times.