Small Business Loan Trend Predictions for 2016
As 2016 kicks off, small business owners can expect to see a few changes in the loan industry according to the U.S. Small Business Administration. According to trends in 2015, NerdWallet has released certain findings that they believe will carry over into 2016 and continue to gain momentum. Business Loans Direct has the information small business owners need to know about lending as they head into 2016.
Online Loans will Increase
As traditional lending institutes tighten their guidelines for lending money, online loans for small businesses and entrepreneurs will increase. As of now, online loans for small businesses account for 2 percent of loans; however, that number is expected to increase to 16 percent by 2020.
More Loans for Women
In 2016, it’s estimated that 43 percent of small businesses will be owned by women, which is predicted to increase to 50 percent by 2020. As a result, the industries for women entrepreneurs will require funding, raising the number of loans women receive by nearly 36 percent.
Small Business Loans will Grow
Despite the economic down turn, the average small business loan size has increased by 82 percent from 2007 to 2015, resulting in 63,000 loans totaling $23.6 billion through the SBA 7(a) program. This lending trend is predicted to continue its momentum as 2016 kicks off.
Small Business Owners will Turn to Credit Cards
According to JPMorgan Chase, Bank of America and Capital One, the number of business credit cards grew from 9.9 million to 10.1 million in a 5 year time. This trend will likely increase as lending institutes regulate who they approve for loans.
According to a 2014 Harvard Business School paper, experts predict entrepreneurs and small business owners will skip getting loans from banks and go straight to online or alternative lenders. As of right now, these alternative loans account for roughly 2 percent of small business loans; however, Morgan Stanley predicts the amount of alternative loans will increase to 16 percent by 2020.
As the world of small business lending continues to diversify, Business Loans Direct is here to meet the demands of small business owners requiring funding. Contact Business Loans Direct today to evaluate your options for business loans.