Today, Bob Coleman reports on the “2014 Joint Small Business Credit Survey“, a study compiled by the Federal Reserve Banks of New York, Atlanta, Cleveland and Philadelphia, that reveals that one in three small businesses that received credit in the first half of 2014 came in the form of a SBA loan.
Maria Contreas-Sweet was sworn in as SBA Administrator on Monday. Here are some quotes from her acceptance speech (hat-tip to Bob Coleman):
“The American Dream has always been about the opportunity to earn a good education and the keys to own your home. But the expanding American Dream is also about the opportunity to start your own business. I’ve lived that dream. And as the SBA Administrator, I’m determined to help others realize theirs as well.
“SBA is a driving force that helps propel this economic activity. SBA provides access to capital, contracting opportunities, and consultation through a national network of partners, and of course, disaster relief loans.
“Two out of three new jobs in America are created by small businesses. Millions of middle-class families are working for folks who depend on the SBA’s ability to facilitate access to capital, counseling and contracting opportunities. We must draw on technology to streamline the process of working with the SBA to make it easier for borrowers to access capital and easier for lenders to lend. The SBA must be nimble, agile to keep pace with our digital age.
Grabbing a look at a good blog piece from our friends at Fundera: “…there are a few common and easily-corrected mistakes that small business owners make when applying for a loan. To help you avoid these pitfalls, we’ve put together a list of five things to watch out for in your own application…”
You’ve got bad credit (and are unrealistic about it)
You let your books become sloppy
You have ongoing credit payments, and not enough income to support more
Your business plan is problematic (or non-existent)
You apply to a lender that has rejected you before.
“When a small business can’t get a loan from a bank, they’ve increasingly been turning to alternative lenders. These lenders … are willing to take on more risk, provide capital faster, and require less documentation than the big banks.” – see the infographic here
Small businesses should be careful of lenders, however, who promise fast cash – and keep an eye on the interest rates!
“(Reuters) – U.S. small businesses borrowed more money in January than they did a year earlier, signaling continued growth in the economy despite a spate of cold weather that has been blamed for weakness in many other indicators of activity.”
“The U.S. Department of Treasury has authorized an additional $27 million in federal funding for the California Small Business Loan Guarantee Program (SBLGP) to provide loans to California small business owners and entrepreneurs.
“California’s small businesses owners will have even greater access to capital, which will allow them to expand their businesses and create jobs,” said Teveia Barnes, the executive director of the California Infrastructure and Economic Development Bank (I-Bank). “The Treasury’s allocation of additional funds further demonstrates that the state is effectively managing our small business lending programs and the I-Bank will continue to offer to expanded loan opportunities to business owners across California.”
“Cash flow may be the lifeblood of a small business, but the ability to create accurate projections and forecasts for your business is what moves it forward. Knowing what’s coming in and what’s going out, and being able to use that knowledge to plan and act is the only way a small business owner can effectively pursue and manage growth opportunities.
“…By understanding the financial implications of a business growth plan, small business owners can estimate their funding needs, ensure operations are able to handle growth, monitor progress against critical variables, and make real-time adjustments. Here are five key metrics small business owners need to know when developing their forecasts.”
At BusinessUS, we spend a great deal of time getting to know your small business, to understand your numbers, and look ahead to how a small business loan by BusinessUS will help you achieve your goals. We’ll keep seeking information like this, and hope you’ll send us any we’ve missed.
C-Level Boost: 27-Year Veteran Stephanie Bitters Joins SBA Lending Team at BusinessUS
Stephanie Bitters, an experienced SBA lender with track record at several of the most successful small business lenders, joins Norris Lozano and AZ Zate at BusinessUS, a national non-bank lender that provides SBA 7(a) small business loans. The C-level hire will help the company compete in target markets, including franchises nationwide, and traditional small businesses in Southern California and New England.
“It’s a legacy of the financial crisis that hasn’t quite faded away: Banks are still hesitant to loan to small businesses, constraining the growth of a part of the economy lionized by politicians and the public alike. While these businesses often rely on credit cards to finance operations and expansion, that’s a risky strategy, given that they still don’t have the legal protections against fees and unannounced changes that were extended to consumer cards in 2009.
Could pawnshops be a good alternative?”
“Ideally a small business borrower works with a loan provider who can do more than just loan some quick cash,” says Norris Lozano, CEO of small business lender BusinessUS, “there is so much more to running a business, which an experienced lending team can provide.”
“So, who are these borrowers (sourcing loans from pawn shops) exactly? … it’s the sole proprietor operating without much savings and not the best credit history who needs money fast, with no strings attached.”