Since the financial downturn many small business owners have been struggling to make ends meet. For a variety of reasons these small business owners don’t have access to capital.
Banks are not providing small business loans because of the lack of profit involved with these loans, as well as the increased regulatory standards forcing business loan applicants to have impeccable credit and collateral; requirements that most business owners fail to meet.
As each year passes more and more small businesses fail because of under capitalization. In fact, more than 80% of the small businesses that do fail are failing because of a lack of access to capital.
Although the lending environment has been difficult to navigate over the last few years for any borrower, things are beginning to change. The internet has laid the foundation for a variety of new funding sources that make access to capital much easier for small business owners.
A recent study revealed that those owners that do borrow are more likely to have less debt than more debt a year after taking a business loan, suggesting that borrowing is healthy.
Based on the accumulated data in the graph it is easy to see how acquiring a business loan will more than likely leave you in a better financial position than before taking the loan, and if past performance is indicative of future results a business owner has a much better chance of succeeding over the long term if he or she is given access to capital.