When independent owners realize they need additional funding to cover the costs of a store expansion, purchase supplies for an upcoming holiday weekend or pay off the expenses of new equipment, they should understand which financial resources are the most small business-friendly. To help owners navigate their options, Five Point Capital is offering the following information about small business lenders.
Throughout the past few years, big banks have been surpassed by small financial institutions, credit unions and alternative lenders when it comes to approving loan applications. BusinessWeek explains that this is good news for independent companies because there is a higher likelihood they will gain access to funds.
Small banks are more likely to consider applicants that are creditworthy, but may not appear that way on paper, the source notes.
“Community banks often describe themselves as local businesses," said Brian Clarke, a Boston Federal Reserve Bank relationship officer, in a recent report . "They interact with their borrowers inside the bank and around the community. They see the results of their loan decisions in the formation of businesses and creation of jobs in their communities every day."
Merchant cash advance companies are similar in that they do not require independent firm owners to meet the same criteria required by banks and they also boast a much higher approval rate.