Many small businesses that need quick cash are getting business financing for the reason that their financial position is getting stronger and stronger over the past few years, as examined by lenders before approving the loan. The same is proved by the Small Business Lending Index, which monitor loan approval rates of alternative lenders, credit unions, institutional investors and banks.
According to the Index big banks are approving more than 20% of the small business applicants. While small banks approved more than 50% of the loan applications they received. Temporarily, the interest rates of lenders remain at the rock bottom.
As economy is improving, lending start increasing this year and every entrepreneur is striving to get some to grow. Few are putting off their expansion plans till the end of this year. There are some reasons to it:
- Many small businesses are looking to invest in their growth as economy improved. This is the best opportunity to expand your business and get some financing. And if you don’t, your competition may surpass you. Under this great financial opportunity, most small businesses are eager to apply for financing in order to expand. And if you withhold, you will hang back.
- Just like a telesales representative push hard as the month-end approaches, lenders also strive to close loan deals to make their financial books look better. 2014 hasn’t been as better as expected by the experts, but still it was a good one for small business financing.
- The jump back of the economy has been slow but sturdy, and lenders are keeping interest rates low to help small businesses get approved, creating major private sector jobs in US. However, if price rises, as economists predicted, the interest rates might increases next year. Therefore, it’s better to apply for financing now to avail attractive financing rates.
- Advancement in technology has enabled business lenders to approved businesses faster than ever before. Improvement in economy and rise in small business credit scores has alleviated the lending risk. Even merchant cash advance lenders have had to lower their interest rates, resulting in lower capital cost for small businesses. As competition is increasing in the small business loan marketplace, interest rates are also decreasing for small business borrowers.
Following these reasons, small businesses who have considered applying for financing and expanding had make a wise decision by taking the thrust now instead in 2016.