Business Loans: Small Firms Look To Non-Traditional Lenders For Financing

Online, April 15, 2010 (Newswire.com) - The recent financial crisis has caused banks - the traditional source of business funding - to tighten their lending practices and standards, making the process of applying for a business loan more difficult and time-consuming and in many cases, impossible. The fact is: many banks simply do not have the money available to lend that they have in the past. Without the credit available through business loans, small firms may struggle to increase inventory, pay employees or effectively manage their cash flow.

As a result of the credit crunch, many business owners have turned to more non-traditional sources of business loans - credit unions, private money lenders and finance companies such as America One Unsecured have seen an increase in business loan applications and loan approvals.

With unemployment at historic levels, many young college graduates are starting small businesses as an alternative to traditional employment. There were a total of 2.3 million unemployed college graduates in March 2010, 1.45 million more than in March 2007, with heavy layoffs in white-collar sectors such as finance. Younger business owners, particularly recent college graduates and those without an established credit history have been hit particularly hard. A recent study revealed that more than one in five (22%) people between the ages of 18 and 34 have been refused a mortgage, personal or business loan or credit card within the last year. That's more than twice the percentage of any other age group. Young people are four times more likely to report that they were turned down for credit than are people over the age of 55.

As the economy begins to recover, business loans will become more important than ever in financing the recovery.

If you are interested in learning more about how you can pre-qualify for a business loan, click here.