Small Business Loans: Non-Traditional Lenders Seeing an Increase in Applications and Loan Approvals

Online, April 13, 2010 (Newswire.com) - Over the last two years, the financial sector - banks and other traditional lenders - has contracted severely. Toxic assets, bad or highly risky loans, mortgage derivatives have wreaked havoc on the balance sheets of major banking companies - many of whom were forced to seek government bailout money to survive. Some banks have even failed completely, going out of business going through a takeover by another firm. As the financial sector contracts, so does the available pool of money available for small business loans.

Lending practices and standards have tightened, making the already cumbersome and time-consuming process of applying for a small business loan more difficult and in many cases, impossible. The fact is the many banks simply do not have the money available to lend that they have in the past. Without the credit provided by small business loans, firms struggle to increase inventory, pay employees or effectively manage their cash flow.

With unemployment at historic post World War II levels, many 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). Younger business owners, particularly recent college graduates and those without an established credit history have been hit particularly hard by the lack of available business loans and credit. A recent study revealed that more than one in five (22%) people between the ages of 18 and 34 have been refused a mortgage, small business loan or personal 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.

It has been said that small businesses are the engine that fuels the U.S. Economy. There are just under 30 million businesses in the U.S. classified as small businesses. Easy access to small business loan funding has in the past, been the "lubricant" that makes the economic "engine" work efficiently. As the economy rebounds, small business loans are likely to become more important than ever in financing the recovery.

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