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Small business loans set to decrease in 2013

Feb 24, 2013 Sean Albert

When just starting a new business venture, many entrepreneurs have to secure loans to get their enterprise off the ground. They may approach investors, try to raise money themselves or apply for a loan. However, many financial experts believe that in 2013, these individuals will have to expand their efforts, because loans won't be approved as frequently.

The Small Business Administration recently noted that startup loans took a dive in the second half of 2012, and predicted this trend will remain unchanged through the first quarter of 2013. The organization recommended having a strong, detailed business plan in place, which can influence sponsors or loan companies.

However, a less than stellar credit history can negatively affect an entrepreneur's chances for funding. For many lenders, if a prospective client can't handle personal financial affairs, granting that person a business loan would be a risk. However, these corporations may want to take a look at the applicant's Payment Reporting Builds Credit score, as this information can give a better bearing on the situation.

This score, which is comprised of evidence showing a strong history of repayments for utilities accounts, can give lenders a more comprehensive view of an individual's financial responsibilities.