Small Loans is Suitable For Small Business

While the ability of small businesses to obtain capital has improved in recent years, getting a traditional bank loan is still a tough obstacle, a new study finds.

Research from Pepperdine University’s Graziadio School of Business and Management and Dun & Bradstreet revealed that over the last four years, there has been a 13 percent increase in access to capital for small businesses. However, most are getting that money from personal assets and not banks or online lenders.

The study revealed that only 38 percent of small business respondents qualified for a bank loan within the last three months, compared with 70 percent of mid-size businesses.

It’s been even tougher to obtain a Small Business Administration Loan. Just 1 percent of the small businesses surveyed qualified for an SBA loan over the past three months.

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Although low credit scores might have precluded you from getting a loan in years past, today’s lending environment is more open to subpar credit ratings.

“While traditional banks may be restrictive when it comes to obtaining credit, there are alternative options,” said Michael Kevitch, president and founder of Small Business Funding.

Alternative lending sites such as Small Business Funding tend to base lending decisions on the financial realities of a business rather than the financial history of business owners. Specifically, Kevitch said, alternative lenders take a close look at business performance, industry type, time in business and cash flow before handing out a loan.