Business credit has been hard to come by for the last few years. As most people realize, the near collapse of the entire financial system at the end of 2008 changed a lot of things. Among them were the banks willingness and even their ability to loan money.
In 2008 and 2009 many banks actually failed and were taken over by regulators. While people in nearly all cases were not left without protection, thanks to the FDIC backing, it did put a severe damper on the availability of money.
Not only did loans for mortgages and other personal uses dry up, but money for businesses went away as well. The months and years that followed saw a sharp decrease in small business loans. Even getting a business line of credit or having small business credit cards issued from banks has been challenging.
After the bailout it looked like the lending environment may be changing, but the fact is, banks have been slow to start lending again. Things did start to rebound however during 2010 and even more so in 2011. This trend looks to be continuing in 2012, as the financial crisis is slowly becoming a distant memory.
However, one aspect that has kept progress at bay has been the financial crisis in Europe. As long as there is uncertainty on the horizon, and Europe is a source of financial uncertainty for many banks, including Citibank as well as Bank of America, then lending improvements will be slow.
If you own a business or are interested in starting one, but you do not have the capital, the best place for you to start may not be a bank at all. If your business idea is one that you feel can get backing, you may want to take on partners or investors instead of borrowing money from a bank. Another non-traditional funding source more and more people have been using is called KickStarter.com. People with project ideas can post projects there for the purpose of getting financially bootstrapped by others who like the idea. Millions of dollars in backing have been secured at that site and it is growing in popularity.
If all else fails, there are always SBA loans available, which are basically loans from banks that work with the Small Business Administration. In order to qualify for a loan though, you will need lots of documentation as well as a decent credit rating.
All in all, business lending is certainly on the uptick in 2012 and should keep improving. One thing is certain, banks are much more willing to take a chance on loaning business capital than they were say, 3-4 years ago. Remember, many great businesses were born out of the great depression and other major recessions, so don’t let the current economic environment keep you from going after your dreams of owning your own business.
In 2008 and 2009 many banks actually failed and were taken over by regulators. While people in nearly all cases were not left without protection, thanks to the FDIC backing, it did put a severe damper on the availability of money.
Not only did loans for mortgages and other personal uses dry up, but money for businesses went away as well. The months and years that followed saw a sharp decrease in small business loans. Even getting a business line of credit or having small business credit cards issued from banks has been challenging.
After the bailout it looked like the lending environment may be changing, but the fact is, banks have been slow to start lending again. Things did start to rebound however during 2010 and even more so in 2011. This trend looks to be continuing in 2012, as the financial crisis is slowly becoming a distant memory.
However, one aspect that has kept progress at bay has been the financial crisis in Europe. As long as there is uncertainty on the horizon, and Europe is a source of financial uncertainty for many banks, including Citibank as well as Bank of America, then lending improvements will be slow.
If you own a business or are interested in starting one, but you do not have the capital, the best place for you to start may not be a bank at all. If your business idea is one that you feel can get backing, you may want to take on partners or investors instead of borrowing money from a bank. Another non-traditional funding source more and more people have been using is called KickStarter.com. People with project ideas can post projects there for the purpose of getting financially bootstrapped by others who like the idea. Millions of dollars in backing have been secured at that site and it is growing in popularity.
If all else fails, there are always SBA loans available, which are basically loans from banks that work with the Small Business Administration. In order to qualify for a loan though, you will need lots of documentation as well as a decent credit rating.
All in all, business lending is certainly on the uptick in 2012 and should keep improving. One thing is certain, banks are much more willing to take a chance on loaning business capital than they were say, 3-4 years ago. Remember, many great businesses were born out of the great depression and other major recessions, so don’t let the current economic environment keep you from going after your dreams of owning your own business.
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