A recent report posted by PayNet suggests that the significant growth that small business lending has seen this past year has leveled off, and is essentially at a standstill – indicating that the entire economic recovery has hit a snag. It may not be quite as bad out there as this report may imply, however, as some sides of the business are actually seeing something quite different.
One of the big reasons for this economic slowdown may have to do with the fact that big banks have tightened underwriting standards, hence making it harder for small businesses to get the approvals they need. As a result, things seem to have really picked up on the alternative lender front. This March, Direct Capital had seen the highest number of loan and lease approvals in the last two years, topping February of this year with a roughly 13% increase. Perhaps the best news, however, is that this upward trend looks like it will be continuing. All of this suggests that small business owners are still actively looking for financing, but are perhaps seeking out more alternative options than ever before.
The reason? Alternative lenders are more likely to be flexible with small businesses and will likely be more willing to work with a less than perfect credit score. A Working Capital Loan* is often a great option for small businesses.
In a separate report, PayNet noted that small business owners are also continuing to pay back their debts on time. Delinquent accounts (those more than 30 days past due) fell to 1.46 percent in February from 1.54 percent in January, and again this looks like it’s going to keep getting better.
See? It might be better out there than you think.
Photo credit to iStock
*Working capital not available in the following states: AK, DE, ND, VT