According to Bank of America, over 85,000 small business loans totaling to over $22.2 billion had been filed between 9 AM to 5 PM yesterday. This is just the figure of the last working day and such figures are only going to surge even higher as the markets are forced shut and businesses collapse in the next few months. It will depend only on the few places where loans can be applied for, including private lenders and loan agencies.
It is Difficult to Find Small Business Loans
Traditionally, banks have always been worse in granting loans to small and medium businesses where profits and time-duration are limited. In most cases, collaterals and securities are limited as well and they find it difficult to process and approve most of them. This is where personal loan agencies step in and try to fill the void and cater to the needs of small business owners.
In some cases, through the help of SBA’s Paycheck Protection Program, small business owners can apply for loans up to $10 million for payroll and other eligible expenses. This is a form of federal relief and many use this alternative when necessary. But, there are a lot more applicants and not all can be accommodated through these facilities.
- It can be easy or difficult to find funds depending on several factors starting from the type of business itself.
- The federal subsidies and plans accommodate only a small percentage of the applications.
- There are several other alternatives where small business loans can be obtained with certain terms and conditions.
Loan Agencies that Cater to Small Funds
Loan agencies have carved a niche market for themselves bringing together private lenders and borrowers. There is money everywhere around you and you have to just find the people willing to give it to you. In the USA, loan agencies cater to around two-thirds of all such small loans each year and quite successfully have returning customers. More than half of small businesses start with a fund of less than $50,000 and for such a small amount, a business loan could give you an edge in the competition.
Loan agencies are expert in particular aspects of the demographics. For example, they understand that not everyone has a good credit score and hence they customize their services targeting specifically those with bad credits. In this way, they can offer a variety of perks. They expertise in one or more of the following:
- Best loans for low credits.
- Best for larger loans.
- Most convenient loan processing.
- Best for P2P loans.
- Best personal online loans.
The above list could go on and on as new agencies devise their business model to cater to yet another niche audience and target them specifically. It also means that in many cases that do not meet the eligibility requirements in traditional form, such alternatives are more viable for small business loans. And, studies show that US citizens are quite dependent on these firms as well. They trust them and find them legitimate to depend on them.
Most of these alternatives are so attractive to the common American because they offer a variety of lenders, liberal credit checking, up to 500 credit score and in some cases even no minimum credit score, automated application and approval process and a lot more to cherish. The timely response during a crisis is what makes them dependable even though at a higher interest rate than normal. When in need and without many options around, they serve as the place for small personal or business loans. There is flexibility in repayment as well if you’re lucky.