Small Business Financing and Franchise Financing Blog

Small Business Loans – When Will the Environment Improve?

Monday, August 31
By Todd Taskey

When Will the Small Business Loan Environment Improve?

This is a valid question if you are an economist wondering when the macro economic environment will improve. If you are a small business owner looking for working capital or a business loan, it is irrelevant.

Better questions: Can I get approved for a business loan and how?
In case you have economic tendencies, let me answer the first question bluntly; Not soon. As I stated in an earlier post, there are many reasons why ARC loans will not work well for small business owners. Most of the comments on from this post are from business owners declined for an ARC loan.

Additionally, The largest lender to small business owners for each of the past 9 years has been CIT Small Business Lending Corporation. CIT is a bit distracted these days trying to avoid bankruptcy. Regardless of their advertising and rhetoric, Bank of America has made just 484 loans for $20 million in the 12 months ending April, 2009. Are you kidding me?

So, will the SBA come to the rescue with a SBA 7(a) loan? Would you if it was your money? Consider the SBA recorded $2.1 Billion of bad small business loans in 2008, double their previous record. Small business failures are climbing and payments are becoming more delinquent. Don’t expect the SBA to flush more money down the toilet by lending to companies that should not be in business anyway. Their lending dropped 30% in the past quarter

So, how about some good news? As the month of July comes to a close, we’ve helped real business owners of almost every credit profile, with the following funding. I offer this not to pat myself on the back but to offer evidence of real businesses I know received real money.
Golden Coral in Midwest received $140,000 on 7/28/2009.
Family Rehab Center in California received $100,000 on 7/30/2009.
Cigar Bar in Florida received $60,000 on 7/11/2009.
Internet Service Co in California received $95,000 on 7/21/2009
Ihop Restaurant in Idaho received $65,000 on 7/7/2009.
Mexican Restaurant in Mass received $40,000 on 7/16/2009.
Chiropractor in Virginia received $30,000 on 7/19/2009.

All of these companies received small business financing because they were focused on the "micro economic" issues of their business. Business credit score, time in business, revenues, timely vendor payments, current mortgage payments, etc. These factors make business loans available. In any business lending environment, loans get made to qualified business owners. Focus on being one of them and you’ll find that money is available for growth or cash crunch regardless of macro economic circumstances.

Todd Taskey has over 20 years experience helping small business owners be more effective financially. After 17 years as a Certified Financial Planner, Todd is now a Principal at Potomac Business Capital, an independent firm that helps arrange working capital and business financing through SBA loans, private equity, business cash advance, equipment leasing, traditional loans and other creative financing. Located in Bethesda, MD, he serves clients natiaonally and also blogs for Business Management Daily and Wrong Question.