For decades, a bank was the place to go for lending. Banks were a part of the community and the bedrock financial institutions of American life.
That has changed. Now, with the economic crisis and some dunderheaded moves by major banks like Bank of America, the public’s faith in banks has never been shakier. A recent poll found that only 21 percent of Americans have faith in their banks, which represents a low water mark.
Perhaps that’s why small businesses are so reluctant to go looking to banks for their financing, and certainly the reasons for this are glaringly obvious. Small businesses have found that since the recession, banks are less and less willing to lend, and more and more willing to retreat into their shells. That means that small businesses who need a critical loan to improve their company find themselves shut out again and again.
We said back in 2009 that we expected the independent lender to fill the void, and that’s exactly what has happened. Direct Capital grew by 60% last year and is well on the way to another year of booming growth, all of that coming in the form of loans, leasing and other specialty financing for small businesses across America. The demand has not gone away. The banks have.
This is a reality the small business community has begun to adopt to, as lending volume slows ticks upward among non-bank sources. Independent lenders are simple more nimble and capable of lending for a wide variety of needs, and no one ever accused small businesses of having simple or unvaried needs. A working capital loan*, for example, can cover everything from taxes to advertising to hiring. That’s what today’s small businesses truly need.
We hope you’ll check out Direct Capital when you’re looking for financing. What do you think of independent lenders?
Photo credit to iStock
*Working capital not available in the following states: AK, DE, ND, VT