Credit and money are still in really tight places, and this is absolutely no secret. What is unknown in the current economy is what small businesses should do and where they should go now. Many small businesses are finding themselves struggling and even drowning in an attempt to overcome the hardships presented to them by the credit crunch. What can a small business do in order to survive during this time of economical uncertainty?
The good news, above all else, is that there are absolutely still options out there. If you want to be able to find the money that you need to either start or grow your business, you may need to be a little more creative, focusing on looking for money in new and interesting places in order to obtain the financing that you need. The era of easy credit is certainly over, but that does not mean you are not without a variety of unique and creative options.
According to Senator John Kerry, the largest source of long term small business loans and capital has fallen by nearly 50 percent in comparison to the same period of last year. The SBA 7(a) loan program used to be the largest source of small business capital, but now it is facing some very bad news. So what happens next if your business needs capital and you are not sure where to go to find it? Here are some options for you -
- Bank loans are a good way to go if you are smart enough to avoid the large ones.
Small banks are still the friend to small businesses even when big banking institutions are unwilling to offer financing. Community banks are still handing out loans when necessary, as well as offering lines of credit. This is because small regional banks are run conservatively, so they do not have the same number of toxic loans that the large scale lending institutions do. They are usually local institutions, which mean they have deep roots coupled with significant assets. They have also proven over time to be better lenders in general, so they still have plenty of assets to lend to you.
- Credit unions are another way to go for a loan right now.
They are not exposed to the same risks that the large banks are. They have actually seen their small business loans portfolio increase, even during these times of economic struggle.
- SBA loans are a good source of lending, but a large portion of this lending is drying up.
These loans are most commonly government backed, so there are less loans to give, but that does not mean that SBA loans are not an excellent way to go in the right circumstances.
- Credit cards are also a traditional way to fund a small business dream, and this still remains true.
It is important that you do not get over your head however, as credit card debt is a large contributor to the rising amount of consumer debt in this country.
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Originally posted 2008-11-12 05:28:46. Republished by Blog Post Promoter
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