Reasons 2019 Might Be The Best Year Ever To Get A Small Businesses Loan

small business loan applications rose to another post-recession record (27.8%) at big banks ($10 billion+ in assets) in August, according to the latest Biz2Credit Small Business Lending Index™ . Meanwhile, regional and community bank approvals of small business loan applications inched up two-tenths of a percent to 50.3% in August from 50.1% in July.

SBA Loans help spur small business lending. The government guarantees on the loans make them very attractive for regional and community banks. It’s a very positive sign that approval rates continue to climb above the 50% benchmark.

“The SBA loan guarantee encourages lenders to say ‘yes’ to small business owners who might otherwise be turned down under the banks’ own underwriting criteria,” said SBA New York District Director, Beth Goldberg. “Thousands of jobs and hundreds of millions of dollars enter the New York economy with the help of SBA’s loan guarantee.”

Goldberg added that through August of FY2019, 32 lenders have made SBA guaranteed loans in the New York District that did not participate in the program last year.

Additionally, institutional lenders are playing an increasingly important role in small business financing. Their approval rates rose one-tenth of a percent to 65.8% from July’s figure of 65.7%. They, too, lend at attractive interest rates.

The Federal Reserve will mull over another interest rate cut that could result in another one-quarter point drop in the cost of capital. The Fed’s next policy meeting is scheduled for September 17-18. Lower interest rates, naturally, are good for borrowers.

However, even if no change is made, interest rates are attractive right now. If someone has been sitting on the fence waiting for a lower rate, it might not ever come. Do not expect rates to drop to near zero as they were a couple of years ago. Anyone looking to borrow money should consider starting the process now while rates are low and the economy is strong.

While bank lending is robust for small businesses that have good credit scores, those who cannot qualify for traditional bank loans or SBA loans still have a viable option with alternative lenders. While non-bank lenders' approval rates dropped two-tenths of a percent to 56.6% from 56.8% in July, still more than half of applicants secured funding. Alternative lenders typically strike deals with companies that banks have rejected.

For instance, a recent Biz2Credit study of small business categorized by industry found that restaurants and retail ventures, generally considered as riskier propositions, are finding success through non-bank lenders.

Small business lending is as strong as ever at big banks and at regional and community banks, and institutional lending is on the rise. Alternative lenders still play a key role, and although credit union lending is not as strong as it once was, it can still be a viable source of capital. Credit unions climbed back up to the 40% mark in August, after slipping to 39.8% in July.

The year 2019 may indeed be the best year in history for entrepreneurs seeking bank financing, so long as they have a solid credit history when they apply. For those who have less than stellar credit scores, there are still options available, although at higher interest rates from alternative lenders. The key is to take steps to improve credit scores by examining operations and trimming fat, paying off high interest credit cards to free up cash flow, and paying bills on time.

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We may never see capital flow more freely to small business owners than we do today. Approval rates for small business loan applications rose to another post-recession record (27.8%) at big banks ($10 billion+ in assets) in August, according to the latest Biz2Credit Small Business Lending Index™ . Meanwhile, regional and community bank approvals of small business loan applications inched up two-tenths of a percent to 50.3% in August from 50.1% in July.

SBA Loans help spur small business lending. The government guarantees on the loans make them very attractive for regional and community banks. It’s a very positive sign that approval rates continue to climb above the 50% benchmark.

“The SBA loan guarantee encourages lenders to say ‘yes’ to small business owners who might otherwise be turned down under the banks’ own underwriting criteria,” said SBA New York District Director, Beth Goldberg. “Thousands of jobs and hundreds of millions of dollars enter the New York economy with the help of SBA’s loan guarantee.”

Goldberg added that through August of FY2019, 32 lenders have made SBA guaranteed loans in the New York District that did not participate in the program last year.

Additionally, institutional lenders are playing an increasingly important role in small business financing. Their approval rates rose one-tenth of a percent to 65.8% from July’s figure of 65.7%. They, too, lend at attractive interest rates.

The Federal Reserve will mull over another interest rate cut that could result in another one-quarter point drop in the cost of capital. The Fed’s next policy meeting is scheduled for September 17-18. Lower interest rates, naturally, are good for borrowers.

However, even if no change is made, interest rates are attractive right now. If someone has been sitting on the fence waiting for a lower rate, it might not ever come. Do not expect rates to drop to near zero as they were a couple of years ago. Anyone looking to borrow money should consider starting the process now while rates are low and the economy is strong.

While bank lending is robust for small businesses that have good credit scores, those who cannot qualify for traditional bank loans or SBA loans still have a viable option with alternative lenders. While non-bank lenders' approval rates dropped two-tenths of a percent to 56.6% from 56.8% in July, still more than half of applicants secured funding. Alternative lenders typically strike deals with companies that banks have rejected.

For instance, a recent Biz2Credit study of small business categorized by industry found that restaurants and retail ventures, generally considered as riskier propositions, are finding success through non-bank lenders.

Small business lending is as strong as ever at big banks and at regional and community banks, and institutional lending is on the rise. Alternative lenders still play a key role, and although credit union lending is not as strong as it once was, it can still be a viable source of capital. Credit unions climbed back up to the 40% mark in August, after slipping to 39.8% in July.

The year 2019 may indeed be the best year in history for entrepreneurs seeking bank financing, so long as they have a solid credit history when they apply. For those who have less than stellar credit scores, there are still options available, although at higher interest rates from alternative lenders. The key is to take steps to improve credit scores by examining operations and trimming fat, paying off high interest credit cards to free up cash flow, and paying bills on time.

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In 2007, I co-founded Biz2Credit, an online small business financing platform that uses technology to streamline the funding process. Previously, I worked for Deloitte C...