Jun 10, 2013 Sean Albert
The small business lending sector was among the hardest hit by the recent economic crisis in the United States, though entrepreneurs have discovered a variety of new methods to obtain the credit they need to start or expand their companies. Alternative financial services have largely picked up the slack left by the financial fallout, which caused many major banks to decrease their lending disbursement volumes.
When in need of a commercial loan, small business owners should always look into every possible option to ensure that they are getting the best deal on the credit. While bank lending will sometimes be best, alternative financial services offer a much greater variety - as well as better approval ratings - for entrepreneurs than their more traditional counterparts.
Keeping the dream alive
CNBC recently reported that despite the fact that small business lending among larger banks seems to be gradually recovering, entrepreneurs are still struggling to access the credit they need to keep operations running. According to the news provider, many small business owners have suffered throughout the years following the Great Recession, struggling to get timely approvals on loans and the cash flow necessary to remain open.
The source explained that entrepreneurs are turning to alternative lenders, as well as smaller banks, to acquire the credit they need. While keeping the sector afloat, improvements still need to be made to strengthen the overall economy, as small businesses are the biggest job creators and producers in the U.S.
However, CNBC explained that alternative lenders are using advanced technology to improve the speed with which applications are approved, while still maintaining necessary risk management procedures. For example, analytics technology has become more popular among alternative financial services companies, and many are using simple web searches, such as Yelp, to discover more about their applicants.
The news provider noted that Main Street needs more support in the form of better access to credit to keep pushing the economy in the right direction.
Reversing the trend
The Mortgage Introducer recently reported that alternative lending has overcome potential recessions in several nations, and are posting significant and consistent gains each year. The source stated that one example is the financial services market in the United Kingdom, where organizations have outpaced their traditional counterparts in a relatively short period of time.
In the U.S. and nations abroad, small business owners have a variety of new and beneficial options when it comes to loan acquisitions.