Business Loans Direct Reports Why Small Businesses No Longer Want Bank Loans
Bank funded loans were the go-to source for small businesses to receive the funds they need. However, according to new surveys and data, more and more small businesses no longer seek financial funding from traditional bank loans. Business Loans Direct is here to explain the shift in business funding.
Although the economy is slowly recovering, it is still playing a large role in the amount of small business loans applied for through traditional banks. The fear of financial uncertainties is causing business owners to look at their funding options more closely. While many small business owners feel their financial performance is improving, they are looking to alternative funding to receive the financial support they need.
Due to the past economic situation, business owners don’t have an optimistic outlook on borrowing money and investing despite the historically low interest rates. Instead, business owners are choosing to operate on their current cash flow, while seeking out alternative lenders should funds run short.
Alternative lending has grown tremendously over the last several years, with an estimated worth of over $3 trillion in the United States according to the Bank for International Settlements and is expected to continue to grow among small businesses.
Alternative lending has turned into a huge deal for business with a revenue of under $5 million to raise financial funds. In addition to the economy, this is also due to the fact business owners are becoming more aware of other financial resource options.
Along with the alternative financial options, businesses are preferring alternative lenders, like Business Loans Direct, because the application process is quicker and less strict. Not to mention, the collateral required isn’t as severe and the repayment terms are easier.
Basically, there’s less risk involved when working with alternative lenders, even for those with poor credit, when compared to working with traditional lenders. Business Loans Direct understands the demand for alternative funding, which is why we work with small businesses to help receive the funds they need by avoiding traditional banks. We offer a number of lending opportunities to help small businesses receive the funds they need to maintain a strong business for future growth.