Many business owners lately have complained about their ability to get small business loans from some of the big banks out there. As a result, many business owners have been utilizing some alternative funding programs in the past few years. Some of these programs include the business cash advance program, or some short term small business loans. They have had a lot of success with these types of business funding providers. They have made working capital readily available for many types of businesses. They get it done quickly and consistently, which is been the name of the game lately.
Small Business Loans From the Banks’ Perspective
For all the talk in the past few years about how hard it is to get small business loans, some of the bigger banks out there see it a bit differently. Bank of America, for example, released a report a few weeks ago about the health of small business in general. In it, they took a survey of 1,000 business owners, all of whom had annual revenue between $100k and $5m, and less than 99 employees. So this survey is pretty representative of your average small business here in America. What they found is that a vast majority of people who applied for a loan in the past couple of years were actually approved. Whether or not they took advantage of these approvals is a different story.
According to the survey, more than half of those who were approved said that they had applied for the loan for emergency purposes only, and not for working capital purposes. Only around 15%-20% of these businesses planned on using the money for cash-flow purposes.
Small Business Loans From Our Perspective
It’s unclear exactly where they got all this data, or where the pool of businesses came from. Did they survey only Bank of America customers? Did you survey only businesses who applied for a loan with Bank of America? Or is the sample from a broader group? Also, is this data gathered strictly from the businesses, or is it cross referenced with their own internal data? These are the questions I have regarding this survey, because from our perspective, and if you ask many of our users, this has not been the case, at least not in the past 2 years. Many business owners are outraged by this report. One angry business owner told us that they’ve had many conversations with some BoA small business loan specialists in the past week or so. Despite the fact that they’ve been in business for 8 years and have never missed any of their payments (many of which for accounts held at BoA itself), and add to it the fact that when they switched over to Bank of America, they were told that their account would be converted over to an SBA account within 2 years, small business loans are out of the question for them. We don’t have all the details, but it sounds like its the exact opposite of what Bank of America is reporting. They claim that their annual revenue is within the stated range, and that there isn’t anything else that should immediately disqualify them.
An Easier Way to Get Small Business Loans
So if you’re looking for an answer as to who you should believe, unfortunately we don’t have that for you. You’ll have to decide for yourself based on your own experiences.
Whatever you believe, there’s one thing we can do for you. Whether or not you’ve been declined in the past, is put you in touch with some great lenders. Fill out our form to the right. Give us some information about you and your business and we’ll find someone who can get you working capital.