Now, when we talk about small business loans, we mean just that – small business loans. We are not talking about a $1 million loan to purchase some commercial real estate or $500,000 to buy some investment property. We are not talking about a $3 million credit line just to show capital on a balance sheet. And, we are not talking about a $250,000 equipment loan for a regional construction company.
We are talking about true small business credit – loans under $150,000. Capital amounts that the 22 million small businesses in this country could use at some point in time for working capital, to renovate their location, purchase inventory, marketing, meeting payroll, developing new products or to simply have the capital on hand to acquire and satisfy customers (what business is really about).
But, we have heard ad nauseam that banks are just not lending to small businesses – claiming there is too much risk in smaller firms. So, many small companies are not even applying for credit anymore out of fear of being turned down. And, as a result, we are seeing small businesses not reach for or obtaining their full potential – essentially letting profitable opportunities slip by.
However, just because banks don’t see the true value of small companies, that does not mean that others don’t – others who are willing to do what they can to fund your business.
The Benefits Of Small Business
There are some 22 million small businesses in the U.S. and they are quite the power house.
According to the Small Business and Entrepreneurship Council, small businesses;
- Provide two-thirds of all new jobs in the nation.
- Contribute almost 50% to our Gross Domestic Product.
- Account for 97.8% of all exports. And,
- Create 16.5% more innovation than larger firms.
All items that help make America the country that it is.
But, if banks think these firms are too risky, that is OK, because given the entrepreneurial spirit in this country, other financing firms (lenders) are stepping up to cover the small business loans that banks and traditional lenders will not. So now, you don’t have to be afraid of being turned down anymore.
3 Sources That Will Fund Your Small Business
1) SBA Loans: Sure, SBA loans have to go through banks – which are not lending. However, banks might not be lending for their own loan portfolios but they are lending under the SBA’s programs.
Did you know that over the last three years, the SBA has been growing the number and dollar amount of the under $150,000 loans they back – even given that banks (who originate these products) are not approving them?
From the latest SBA data;
In 2012, the SBA guaranteed 14,520 under $150,000 loans for a total loan amount of over $802 million. In 2014 (two years later), the SBA increase the number of these loans to 16,043 with a total volume of $955 million – with a down year in 2013.