Secure Your Business Future
Secure Your Business Future: Navigating Loan Options
In today’s financial landscape, securing funding for your business can feel like navigating a maze. While many banks might not openly admit it, there’s a noticeable shift in their lending practices. The truth is, they’re not approving business loans at the same rate as before. According to a recent report by KPMG, there’s been a significant tightening of credit standards in the Commercial and Industrial sector, with 49% to 51% of banks scaling back on approvals, depending on the size of the borrower’s annual revenue.
So, who are banks lending to nowadays? The simple answer: businesses that bring substantial deposits. It’s reminiscent of J.W. Hornaday’s quote, “A banker is someone who’ll lend you an umbrella only when the sun is shining.” In my 23 years in the commercial finance industry, I’ve never seen deposits hold more weight than providing loans.
But not all hope is lost. While some banks might have their pencils down, others are still in the game. However, they’re more selective about whom they lend to and impose stricter conditions than ever before. You might also notice an uptick in banks offering SBA 7a loans to mitigate their risk. But be cautious; if a banker rushes to offer you an SBA loan without reviewing your financials, it might not be your best option. These loans should be a last resort, not a first choice.
Additionally, non-bank loan options provide flexibility that traditional banks often can’t match. These lenders typically don’t require a mortgage on your personal property and have fewer financial covenants. With bank rates on the rise, non-bank capital providers are becoming increasingly competitive. The question then becomes whether the fewer restrictions are worth the cost difference.
Why does this matter? Access to capital is crucial for business success. At Green Zone Capital Advisors, we understand which banks are still lending and which ones have put their pencils down. We know which capital providers offer the best terms and rates that align with your needs. Our expertise lies in navigating the complexities of business loans, ensuring you secure the right funding to fuel your growth.
