Slow Business Lending Continues Despite Economic Growth

When you hear that the market is doing well or that unemployment is low, you might assume that it’s the perfect time expand your business and finally apply for that business loan. Unfortunately, you’d be wrong.

Now, that’s not to say you shouldn’t grow your business. However, a business loan from a bank may not be the best way to do it. Despite a healthy economy, business lending remains slow.

While lending grew about 6.4% in 2016, from March 2016 to March 2017, bank loans and leases only grew about 3.8%. The numbers for business lending are worse.

The Current Business Lending Environment

October 2016 provided a rare growth of 8.9% in commercial and industrial loans, however, the numbers from March 2016 to March 2017 barely reflect that increase with a growth of just 2.8%. That’s a slow growth and it isn’t just puzzling business owners who are being rejected—it’s confusing economists, too.

So why is economic growth and stability not being reflected in bank commercial lending? Some point the finger at oil and gas, claiming that those companies are paying back their loans at an increased rate, which may skew the numbers. Others say that lending has slowed across the board and that the oil and gas hypothesis doesn’t account for that. Add to that the fact that everyone is still getting accustomed to a new political administration that is implementing new policies, and the possible reasons increase but with no added clarity.

Small Business Should Look Elsewhere for Funding

With banks barely lending, small businesses are the ones most hurt. While they are a vital part of a healthy economy and create numerous jobs in their communities, small businesses are too often overlooked by large banks and left trying to find alternative sources of funding. While borrowing from friends and family may help in a pinch, it is not a long-term solution and can end up damaging those relationships. Exploring other business funding sources should be a priority for small business owners. Rather than expending time and energy applying for business loans that have little to no chance of being funding, small business owners should look towards business funding companies such as Capstone Corporate Funding, LLC. to ascertain whether they are eligible.

Capstone Corporate Funding, LLC is an invaluable resource for contractors, importers, and manufacturers. By providing factoring and purchase order financing, Capstone Corporate Funding, LLC helps small businesses in need of quick capital.

Capstone Corporate Funding, LLC Helps Where Banks Don’t

Rather than expending time to create or gather the various documents needed to apply for a traditional bank loan, if your business invoices for work completed (for example, if you’re a construction company or a government contractor), you may be eligible for invoice factoring through Capstone. With various options available, Capstone can provide funding in a manner that helps companies quickly. Businesses that produce pre-sold products may be eligible for purchase order financing.

Both of these options are quicker—and easier—to apply for than a traditional bank loan. If your company has good credit and your clients have good credit, you have a much higher chance of receiving financing than you would from a bank.

Factoring and PO financing aren’t for everyone. By speaking with one of our trained specialists, you can learn more about what funding solutions may work best for your company. In business, time is money, so don’t hesitate. Give us a call today or stop by our website to request more information.