Jan 07, 2014 Sean Albert
Small business owners often cite access to credit as the single most critical aspect of sustaining operations and growing as a firm, and entrepreneurs have experienced turbulence in this area throughout the past several years. However, the lending market continues to become more robust and accessible to small businesses, especially as the result of growth in the alternative financial services sector.
Businessweek recently reported that entrepreneurs have a variety of lending opportunities to take advantage of today, and a much higher diversity of options than what would have been the case only five or 10 years ago. For one, alternative lending has become a more viable option for small business owners, while other localized programs continue to become more prevalent across the nation.
For example, the source cited the rise of community development financial institutions (CDFIs), which generally target small business owners who have been denied credit from traditional banks. According to the news provider, these entities disbursed roughly $1.5 billion in the past five years, helping local firms and nonprofit organizations thrive despite economic turbulence.
However, Businessweek noted that the U.S. Small Business Administration is still the champion in this area, as it backed $30 billion in entrepreneurial loans in fiscal year 2013, which ended in September. As the delinquency rate continues to drop and various other economic segments improve, including a resurgence in consumer spending and optimism, lending conditions will likely become more preferable for the average small business owner.
In today's financing market, entrepreneurs have countless options when it comes to lending products, and as such they should always research all programs available to them before making a final decision. While traditional bank loans might be preferable for some companies, alternative financial services can come in handy for a diverse and wide range of lending needs.