Did you know that, according to the Small Business Association (SBA), small businesses created 65% of new jobs over the last 17 years, and 50% of American employees work for small companies? The economy is not doing well, and small businesses are working to change that. As such, supporting small businesses may very well mean supporting the U.S. economy. Why are small business loans becoming increasingly popular, and how can companies choose from traditional and alternative lenders?
Why is Small Business Lending Popular?
The Portland division of the SBA promised $457 million in small business loans, including new business loans and working capital loans, according to the Portland Business Journal, and just two years ago, 800,000 small businesses funded company operations and expenses using business loans. Director of the Portland SBA branch, Camron Doss explains, “Helping small businesses gain access to capital is an important part of helping them grow and create new jobs.” New business loans typically fund employees, inventory, and necessary equipment.
Traditional or Non-Traditional Lenders?
Forbes reveals that as many as 543,000 small businesses crop up in the U.S. per year. Although lending is on the rise, companies should carefully consider what loans suit their particular needs best. What lenders do small businesses have to choose from?
Traditional lenders include banks, and other dependable financial institutions. Banks screen small business applications for an average of 30-60 days. Traditional lenders typically offer lower interest rates, but they can also have strict criteria for approval. (Credit scores and financial history will, in this case, matter.)
Loan companies, and independent companies, make up non-traditional or alternative lenders. These lenders are, on a whole, able to be much more flexible. Some may offer cash advances, and most approve loans within as little as 24-48 hours. Although interest rates may be somewhat higher, alternative lenders can meet particular needs and often provide capital faster.
A growing number of lenders are realizing that small businesses may help turn the economy around. Small businesses can choose from traditional and alternative lenders for the new business loan that best suits their needs and particular company. Read more here.