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Small Business Financing Heads in a New Direction
By plrprousers | October 1, 2009
Small business financing is heading in a new direction. The journey for small business loans is likely to have all the adventure and uncertainties experienced by a wagon train over a century ago. As historians know, wagon trains often encountered serious obstacles even when they were led by expert wagon-masters. Results for commercial borrowers will be confusing, uncertain and painful at times based upon what we are observing with commercial financing. Business owners should anticipate unexpected challenges along the way but nevertheless have better results, particularly with the help of a business loan expert.
One of the key factors impacting the new directions for working capital financing is that banks and other commercial lenders have changed so dramatically in a very short period of time. For the most part, these charges will probably be permanent. Numerous banks have reduced or stopped their small business loan activities, and some commercial lenders have gone out of business altogether. For special-purpose working capital financing and business financing such as funeral home financing, this has proven to be especially true. Many banks have announced that they are lending normally while their actions suggest otherwise. Commercial lines of credit and most non-collateralized business loans have been eliminated by numerous banks. Multiple reports of banks telling business owners that they have only a few weeks for refinancing their current loans elsewhere have been all too common. The new directions for commercial borrowers are not optional or voluntary with these multiple bank examples. Business owners might find themselves without reliable business loan and working capital financing if they do not quickly move in a new direction for their business financing.
For businesses needing help with specialized business financing such as funeral home business loans and golf course loans, the choices when seeking new directions will be more limited. Sworking capital financing was already difficult in most cases for special-purpose commercial property. But what might turn out to be advantageous for the owners of funeral homes and golf courses is the urgency of finding new commercial finance sources. In many cases (for both these or other commercial properties), commercial borrowers have frequently not looked for new business finance sources unless they absolutely needed a new lender. A surprising number of business borrowers are finding better commercial loan terms than they previously had now that many golf course and funeral home owners (as well as many other business owners) have literally been forced to find new sources for their commercial mortgages.
Different lenders are emerging to replace the old ones, largely because business lending is so competitive. The banking industry is starting to look like other aging industries such as automobile manufacturers as commercial financing moves in new directions. Although the similarities to automobile manufacturers are surely not welcomed by bankers, small business owners might now find that their working capital financing and commercial financing choices have improved.
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