Tag Archives: small business financing

Current Trends in Small Business Lending

Business environments are probably as dynamic as Mother Nature. Something that seems normal and stable today, might turn as a thing of the past in days, month, years or decades and the probability of people predicting anything accurately each time, is almost as good as it would be just by chance.

What indicates something that is important to focus on and understand in any present scenario, is likely to be a trend. Trends are temporary in nature, but can last for days, seasons, years and even decades. This applies for almost all industries and businesses and the business of small business lending is no different. These trends affect both lenders and borrowers, which means that as a business owner/stakeholder who may consider funding, it would be a good idea to understand some current trends that relate to it.

In this article, we shall discuss a five key trends that are impacting the small business lending market keeping in mind not that the ongoing pandemic but also what the future seems to hold in store and various other factors.

Trend 1. SBA Loans are Still Easy but the Pandemic did Reduce Approvals

Ever since the concept of SBA loans was put into practice, lenders and borrowers of such loans have seen great value in it. Yes, qualifying for one was never a sure shot, but approval rates have been good by large and the deals tend to remain attractive for businesses that can qualify.

However, certain trustable sources indicate that off late, there has been a slight fall in the approval rate of loans that are being applied for. This is understandable given that risk in lending is on the higher side these days for most industries.

Trend 2. Non-Bank Alternative Lenders have increased and Competition is rising

Non-bank alternative lending is playing an increasingly important role in the market by not just opening up opportunities for a much larger set of potential borrowers but also influencing the way the traditional lending system operates. With enhanced services that are easier to deal with, these loans tend to be expensive versus most other options. However, there is more competition now and this is allowing borrowers to get better deals. This ought to be an advantage for borrowers who prefer such loans or qualify for just these loans for various reasons.

A brief online application form is all that it takes to initiate a loan query from us BusinessCapitalUSA. We are providing competitive deals to small businesses and shall be happy to serve you.

Trend 3. Traditional Lenders are Strengthening Risk Assessment Processes

A natural reaction by the banking system during times of elevated risk, is to strengthen control over risk in lending. It is an important step for ensuring economic stability. Traditional lenders have been advised to strengthen their risk assessment processes until the global economy is out of the danger posed by the ongoing global pandemic.

This trend has played a role in moving some demand towards other forms of lending which were already seeing a rise.

Trend 4. Mobile or On-the-go Lending didn’t pick up well

A trend that went against the majority of expert opinion, is that of mobile or on-the-go lending. It was forecasted by the vast majority to pick up well. It had started to, but if recent times are to be considered a good indication, things didn’t go as most people estimated. The market share rose and fell. The fall didn’t exactly come with the pandemic as just weeks before the news started spreading, the market share of mobile lending in both personal and small business loans reportedly lost share. This trend carried on into the pandemic days too.

Trend 5. Cash Flow Still Remains Absolutely Vital

We have published articles about the importance of cash flow in businesses. Liquidity and availability of funds to circulate cannot fully be replaced by any other forms of assets and investments. Tough times and times of increased dynamism exaggerate the need the healthy cash flow and liquidity in businesses. The recent times have seen many businesses get devastated simply because of the absence of such readiness while many other businesses don’t just seems to sail through but also seem to grow thanks to well managed cash flow.

Borrowing remains a significant source of capital for liquidity in times of turmoil for many small businesses in the US. We at BusinessCapitalUSA provide loans for all purposes that a business may need to borrow money for, after just a few simple checks and verifications. We welcome you to fill out our brief application form to get in touch with us.

When to Take a Loan While Running your Business

Reasons to Secure a Business Loan

Every business sees phases of profits and losses during its tenure. At times, we may face financial trouble but may not want to completely shut down because of our belief that it may do well further down the line. Even during times when our business does exceptionally well, we may want to borrow money in order to scale up.

Here are some of the reasons why people apply for business loans:

While Facing a Trying Time, Financially

While running a business, you may come across a time when you feel the need to secure extra funding while facing a depreciation in your financial graph and may not have the amount of money that you may need. A business loan can help you get through your rough patch by providing you with the funds that you need to cater to the basic expenses of your business. For example, electricity costs, rent, salaries, etc. can be covered with the help of a business loan.

To Expand or Level Up In Your Business

When a business does well, wanting to take things a step further is natural. No businessman ever stops trying to grow and an expansion is always part of the pipeline. In situations where one’s company sees a lot of scope, one may not want to lose out but may not have the funds to scale up. Business loans help owners expand; be it to open a new branch, shift to a better location or renovate their current workplace. Nobody should lose out on an opportunity to grow and business loan lenders online ensure that even owners of small businesses aren’t denied that opportunity.

Seeking funds for expansion can take place due to the following reasons:

Hiring new people: Investing in an employee undoubtedly costs a lot. With the need to keep one’s team happy with a juicy salary and added benefits entails a fair amount of money and the opening of new positions in the firm adds to that. Compromising on hiring the best of the best shouldn’t be an option when you’re already putting in so much money. If you don’t have enough to employ the best then taking a business loan can certainly be beneficial and can help you hire the right professional for your firm, thus adding value to your company.
Buying new equipment: New inventions in technology and equipment never die because everyone is always looking at making things easier for humankind. One wants equipment that can serve the purpose it’s been purchased for in very little time. Of course, one can make do with equipment that aren’t that efficient, but for the best outcome it is important to invest in the right one in order to improve quality and reduce time. A business loan can help you invest in the right kind of equipment for your firm and help increase productivity and efficiency.

A business loan can certainly help one in many different ways and can cater to the needs of different business owners. Be it expansion or a slowdown in your business, these loans are meant to help your firm succeed in the long run and applying for one after a thorough research about your long term goals and understanding why you may need it can undoubtedly help you.

Explore when and why you should consider Small Business Loans.

Small business needs improvements occasionally and it also true that it takes money to make money. Hence, depending upon the type of industry, a small business may involve working capital to reinvest in business by buying equipment, covering marketing and advertising costs, managing cash flow; placing in real estate, etc. However, small business loans can facilitate in financing both the anticipated and surprising shifts in your business and thus enable you to reap high returns.

Know how Small business funding is a smarter option and taking it can help your business grow:

Buying equipment or machinery

Exceptional business performance may require some or the other improved equipment or machinery to complete the job. At times, having got the required equipment appears insufficient as the costs of unforeseen repairs or replacing of defective equipment can go beyond your planned budget. Additionally, broken machinery can result in delayed services that in turn can ward off your potential customers. Thus, dent the business credibility, gradually. However, when considering equipment, you have options- to buy or to lease it. A straightforward cost-benefit breakdown can help you make a wiser and quicker financial decision. Small business funding, apart from aiding you to deal with equipment costs competently, it also serves to hold your business coordinated with the technical advancements.

Expanding your business operations

If you are aware that your small business is flourishing and it has exceeded your present office location, then it is time for expanding your physical location. However, realize that expanding business means hiring additional staff, increased advertising costs, renovations, etc. If you lack decent funds for such a big shift, you can also consider loans for small businesses for putting in an opportunity to expand. Yet, employ a revenue forecast and determine how the supposed expansion would influence your business before buying a second location for your business. Since purchasing real estate is a healthy business indicator; banks can easily approve your loan request. Nevertheless, if you want convenience and fastness, small business funding from Business Capital USA is your best bet as it maintains your business operational costs undisturbed.

Purchasing additional inventory

Addressing inventory costs is often a challenge for many small business owners. In order to sustain the customers’ growing demand and allow uninterrupted service to them, you constantly need to refill your inventory with ample options. This turns even harder to handle when your small business is a seasonal one such as a retail business. Moreover, buying bulk inventory without even gaining the return on investments can is high-risk. A well-established sales projection can render ease and confidence while making this unmanageable financial move. As a small business, you can make the most by applying for a small business loan prior to the holiday season and repay conveniently with the sales profits from the recurring sales. Thus, opting for small business funding can easily make up for the chief expenses- inventory overheads.

Boosting working capital

Holding a steady cash flow is not possible always. Sometimes, you need extra money to address routine business operations. Cash flow issues can turn more intense when you have unsold inventory, rent, staff, utilities, etc. to deal with regularly. Such a scenario demands small business funding to cover up the working capital requirements until the business’s earning assets recover substantially. Availing loans for small businesses can thus extend the necessary financial cushioning during periods of low sales.

Small business loans can thus grant a greater prospect to retain cash flow throughout the low business season, deal with usual operational costs, compel revenue, compensate for losses, preserve customers, etc. Moreover, it also offers ease of application, speedy online processing, and quick funds transfer.