Alternative lending needs to step up in light of government shutdown
Oct 19, 2013 Sean Albert
The government shutdown has been one of the more troublesome threats to small businesses in recent memory, as millions of entrepreneurs who typically rely on the public sector for financial support have been starved over the past three weeks. Now, economists are becoming increasingly concerned about what the shutdown might mean for the financial situation in the United States several months down the road.
However, alternative financial services providers were among the most critical drivers of business growth and wellness during the harshest years of the recession, and are well-positioned to experience the same types of success amid the lack of government entrepreneurial lending. Small business owners in need of fast financing should always consider taking the alternative route to loan acquisition.
Paralysis sweeps the nation
The Washington Post recently asserted that the government shutdown has essentially paralyzed small businesses in virtually every state across the nation. Countless entrepreneurs had put plans into place to either start new operations or expand upon existing ones, working under the assumption that the U.S. Small Business Administration would make good on its loan promises.
Because the shutdown has completely closed the SBA, these entrepreneurs are in an extremely precarious position going forward. According to the news provider, the setbacks experienced by many small business owners are expected to be substantial, with only two weeks of public sector outages leading to more than a month of disruption for the entrepreneurs.
This likely could not have come at a worse time, especially considering how many small businesses expand hiring and production leading up to the busy holiday shopping season. Likewise, the coming months are critical for the annual economic performance of the United States as a whole. The source explained that the SBA has backed more than $60 billion in loans over the past two years.
Help on the way?
Alternative lenders have traditionally been highly advantageous in nature, looking for opportunities to penetrate emerging markets and capture some of the clientele who would typically go through banks. The government shutdown has threatened the economic wealth of the country, and one can only hope that alternative financial services providers will begin to expand their activities to support the at-risk small business owners who need loans soon.
Entrepreneurs should look into alternative lending options, especially considering the fact that these channels generally have higher approval rates and quicker turnarounds on applications than traditional avenues.