Seeking Sources for Small Business Loans

Money may be a headache for entrepreneurs as they start their businesses or try to expand. Crain’s New York Business reports that small business are seeking new sources when big banks turn them away or limit their credit lines. (Note: Crain’s may require free registration to read the full article.) 

At the country’s biggest banks, just a hair more than 10 percent of small business loans were approved in May, a drop from earlier this year, according to the Crain’s story. But experts disagree whether that’s a sign of trouble for times ahead.

A recent survey showed that businesses are growing more optimistic about their chances of getting a bank loan. Among business owners surveyed, “47 percent said they had been successful in getting a bank loan during the previous six months,” according to an Associated Press story. Almost a third of survey respondents “said they plan to seek new financing in the next six months.”

Lending can vary from state to state, not just from bank to bank. New Jersey reported an uptick in small business loans, according to a story in The (North Jersey) Record, while The Dallas Morning News reported that lending fell in North Texas last month.

A new tool may also help business owners find the best bank: Bank Grades, from MultiFunding, provides a report card to determine how friendly a bank is about its small business loans.

For more information about small business loans, visit the US Small Business Administration (SBA) (and read this New York Times blog post about SBA myths, while you’re reading). For another important viewpoint on whether bank loans are ideal — or even wise — for small business owners, check out Derrick Jones’ recent article on Upmarket: Why Banks Are Bad For New Entrepreneurs.

Image credit: Philip Taylor PT