Finance/Capital Access

Applying for small business financing can be time-consuming and frustrating. Research from the Federal Reserve Bank of New York shows the average small business owner spends more than half a standard work week (26 hours) researching and applying for financing.

Unfortunately, putting in that time and effort doesn’t always pay off. The Nav American Dream Gap Report survey found that 45% of small business owners whose applications for financing were declined said they were turned down more than once. And research from the 2014 Joint Small Business Credit Survey found that in the first half of 2013, a quarter of firms with employees and nearly a third (31%) of those without employees didn’t even bother to apply because they didn’t believe their applications would be approved.

While no one wants to be rejected when they apply for credit, small business owners are at a particular disadvantage because major consumer protection laws don’t always apply to entrepreneurs seeking financing for their ventures.

Here are three things that may come as a surprise when they apply:  (more…)

By the Opportunity Finance Network

Small business owners pour their hearts and most of their resources into starting, growing and sustaining their businesses. Access to responsible capital is critical to grow and expand a business, which in turn is critical for financial security and creating jobs in the community.

Getting a small business loan has often been particularly hard for women and minority business owners. Women-owned businesses only get 4.4 percent of the dollar amount of all conventional small business loans. More than a third of minority business owners are worried they will not access the capital they need to maintain business operations. Furthermore, minority entrepreneurs are disproportionately denied credit when they apply for it, regardless of credit scores, income, or profits. The financial crisis that shook the entire national economy was damaging for small businesses in general, but especially small businesses owned by people of color, as large banks cut back on lending to small businesses.

In the wake of the recession, a plethora of online lenders have been promising small business owners “quick and easy” cash, without disclosing the hidden fees, high interest rates, and prepayment penalties. These tactics are harmful at the least, and can even drive some to go out of business. According to a recent survey by seven regional Federal Reserve banks, 20 percent of small businesses applying for financing in the past year went to an online lender. Though 75 percent of these businesses received at least some financing from these online lenders, only 15 percent reported being satisfied with their loans. This rise in unregulated, online alternative lenders provides an unprecedented but confusing variety of financing options, many of them designed more to help a lender’s bottom line than to help a small business succeed.  (more…)

By Rick Burgess, CEO, Connect Lending

America is built upon our entrepreneurial spirit. This spirit is what drives our great country to innovate and endure adversity in challenging the ways businesses are managed. Every day, individuals embark on setting up a business to capitalize on the advantages our great country has to offer. With changes to regulations, additional requirements and limited lending practices, traditional bank loans aren’t always available, and may not be accessible for the everyday business.

Fortunately, there are numerous types of alternative lending solutions in the marketplace. But, finding them by simply walking into your local bank or credit union isn’t going to be fruitful. Connect Lending provides an online platform to match small business owners to the right lender for their business solution. When using our platform, review these key factors with your client to ensure a smooth process for securing a loan:  (more…)