Pulled from the Washington Post “On Small Business” section today, this article:
“Since January, the Thomson Reuters/PayNet Small Business Lending Index, which measures the volume of new commercial loans to small firms, has averaged 110.4, up substantially from an average of 103.6 in 2012.
That marks that fourth straight year-over-year improvement, with the average previously jumping from 74.2 in 2009 to 80.7 in 2010 to 94.6 in 2011. The scores are indexed so that the volume of loans from January 2005 equals 100; so the measure is now above pre-recession levels.”
“Credit health is up, delinquencies are down, and many indicators are pointing toward upward growth in small business lending activity,” says Norris Lozano, CEO of BusinessUS, a non-bank lender making SBA 7(a) loans to small businesses in targeted markets nationwide.
“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.”