There are a lot of ups and downs in the small business lending market. There are recessions, recoveries, and times of increase. But through it all, you need a business loan you can trust.
Luckily, the landscape right now is looking good. It’s a great time to get a business loan! You small business are fairly likely to get approved.
The Recession is Over
2007 and 2008 were years of hard financial crisis. Small business were struggling just to keep their doors open, and bank lending was down by 18 percent. Because of that, more stringent restrictions on lending and a pragmatic approach to lending swept through the country as a way to try to combat the financial crisis, making it very difficult for small business to get a loan.
The economy is on its way to recovery. Financial technology like improvements in internet and machine learning also caused an upsurge in the ability of small businesses to secure more loans. Person to person lenders were also emerging as financial tech that helped businesses.
Regulations Have Changed
In the past, small businesses have faced fairly inefficient terms when it came to government regulations. Despite being most oversights, overlaps in regulation subjected business owners unfair exploitation. It was in part due to the fact that small business lenders, credit unions, and banks all work independently from one another. Regulations were fragmented, creating barriers to fair rules for small business owners. They called these multiple regulatory constrictions “spaghetti soup.”
Online lending has allowed that to change. The oversights and restrictions weren’t applied to online lending. This forced bigger lenders to take a look at the relationship between the errors in their framework. Now, there are more lending types than ever all competing with one another, which is actually good for small business.
As mentioned, financial technology (also referred to as fintech) is rapidly increasing. This is good news to truck drivers and individuals looking for funding. Mobile banking, AI, smart contracts and more are all changing the landscape of how lenders interact with small business. Mobile banking is poised to overtake online banking. The new advancements of mobile phones allows advantages of technology that didn’t exist even a few years ago.
Companies are also working together to improve conditions. For example, Fannie Mae and SoFi struck up a partnership in 2016. Together, they created a larger customer base and a better refinancing process.
More comprehensive regulations mean that small business can get off the ground more easily. In states like Wyoming, small business owners are able to create an LLC for under 300 dollars. And accessing lenders and banks is easy – you don’t even have to be in the United States to do it. Other countries are on board with these changes, and China and the UK have been taking advantage of low U.S. startup costs.
At TopMark Funding, there are no ups and downs. Our team is compiled of people ready to make your loan experience easier than you imagined it could be. Contact us now to get our rate, no matter what other lenders have said. We’ll work out a plan individualized for you, because we actually understand, and know that no two business are the same, so no loan should be the same, either.