The Small Business Lending Fund ended last week with disappointing results. Of the $30 billion intended to be disbursed to banks, only about $4.3 billion, or 14.3 percent, was approved for about 382 banks (out of 7,000 banks). This small participation has escalated the challenges small business owners face in growing their businesses, due to this lack of access to capital.
While we applaud the government for its intentions, the results of the program should leave small business borrowers discouraged. Simply not enough banks are able to directly connect with borrowers. In fact, according to the Treasury, of the banks that applied, roughly 40% did not meet the program’s basic requirements. While there is an abundance of capital and banks willing to lend, the distribution channels for accessing such credit and the lowering cost of origination however, are not accessible or well known.
Needless to say, the SBLF did not work. Small business owners are no doubt aware that seeking financing is a serious endeavor and the Government, no matter how well intentioned, can’t change that fact. BUT DON’T GIVE UP. At BoeFly we know the lending preferences of more than 1,000 lenders and from that we know that worthy borrowers can secure financing. However, that bank interested in your loan might not be down the street or even in the same state. Business owners need to be proactive in getting their financing request out to as many lenders as possible. There are risks in doing so (i.e.: your personal credit can be negatively impacted, and it eats up enormous time) but these can be mitigated (see our 5 Keys of Getting Small Business Loans) you can achieve your objective.
For more info on how to get financing for your business make sure to check out BoeFly.com today.