Accounts Receivable lending still good option

by Michelle 10. August 2010 11:15

I was recently reading an article about access to credit for small businesses and thought, geeze…what’s a business owner to think these days?  Are things getting better?  Are banks lending…or not?

Here are a couple of quotes from the WSJ.com article, “For Small Business, Slow Gains In Credit,” dated July 13, 2010;

“Overall, the survey data seem to suggest that current economic conditions for small businesses, though still quite challenging, are less dire than they were in 2009.” This is a quote from Robin Prager, and assistant research director at the Fed.  She was quoted recently at the Fed’s forum for small business lending.  Sounds promising, right?

Well, not so fast…just 2 paragraphs later in the same article, Fed Chairman Ben Bernanke is quoted as saying, “The formation and growth of small businesses depend critically on access to credit.  Unfortunately, those businesses report that credit conditions remain very difficult.”

So, as a business owner who needs credit to start or grow their business I’m sure many are left wondering, “I can perhaps, maybe get a loan or not with my local bank…they more or less may or may not lend me a small amount of money???”

Sometimes I think we would all be better off reading tea leaves…but I digress.  On to the main point…

All of this uncertainty leaves many small business owners deciding not to hire or grow until they can get a better feel for what they can reasonably expect from lenders in their area.  And to speak to the other side of this equation, local and regional banks are nervous about what types of businesses to lend to due in part to the many regulatory rules and a general perception that in these times any risk may be too risky. 

The good news is that accounts receivable lending through factoring or asset based lines of credit remains an excellent option for small to medium sized businesses who don’t qualify for a traditional loan.  Our industry continues to see allot of activity and we are actively working to help as many business owners as possible.

In these perplexing times alternative lenders are a good option.


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