Recovery is Slow for Small Business Lending
While the economy slogs along at a snail’s pace and businesses of all sizes continue to persevere, banks remain steadfast in reigning back loans for small businesses. Even though loans to small businesses were up 1% from last September, they are still 18% less than what they were in 2008 according to the Federal Deposit Insurance Corporation.
Traditionally, small businesses were able to obtain necessary working capital loans through small local banks. For decades, local business owners sat down with bank executives and built relationships that were beneficial for both the bank and the business. However, since the housing bust in 2007 which caused numerous bank failures, many of the surviving banks have changed their underwriting practices and have literally converted loan approvals into a checklist. Relationship lending is virtually gone now and small business owners have had to consider alternate forms of financing to maintain their livelihood.
Some business owners have tapped into their savings or retirement plans, mortgaged their homes, asked money from family and friends, and some have even turned to high cost, short term loans to keep their entrepreneurial hopes alive for just a little bit longer. While a majority of these borrowers have good credit and more than two years history of being in business, local bank failures over the past few years and the Dodd Frank to big to fail bank legislation have caused the remaining banks to shy away from small business funding. Instead of developing the necessary expertise to handle small businesses accounts, they instead choose to penalize small businesses by showing them the door.
Although some small business owners have found it difficult to obtain the necessary capital they need to maintain and grow their businesses from their local bank, options do exist. Fortunately, Capstone Business Funding, LLC has the solution.
Capstone Business Funding, LLC has been helping small to mid-sized businesses for years obtain the necessary working capital they need to sustain and grow during uncertain economic times without all the red tape you normally get a bank. Capstone Business Funding, LLC specializes in Single Invoice Factoring (“Spot Factoring”) for firms in need of immediate cash. Spot Factoring provides flexible, no contract invoice selling in exchange for working capital from Capstone Business Funding. Call Capstone at 347-821-3400 and speak with a representative today.