While more traditional sources of financing may be opening up to small businesses, overall the market remains constrained, encouraging companies to seek new options, including short-term lending.
Among the creative solutions businesses are using are asset-based lending, lease-back and cash advance strategies. An article from The New York Times points out that these solutions vary in effectiveness based on the audience. Short-term loans, for example, are primarily utilized by restaurants and other retailers because they typically aren't borrowing against factories the way more industrial businesses must, the article claims. "The days of yesteryear when you could go to your corner bank are over," Kenneth Walsleben, professor at the Whitman School of Management at Syracuse University, told The New York Times. "Small, emerging, growing businesses have few traditional sources to turn to. You have to get a little creative." However, even as economy begins to right itself, such solutions are unlikely to disappear, as larger financial institutions continue to uphold the most stringent of lending requirements.