Are You Trying to Get a Small Business Loan?Posted by Pontoppidan Lindgreen on January 15th, 2021 For many years I have been operating my company under the assumption that I would be a "small enterprise" and that I dealt with "smaller businesses". I couldn't discover why all the "help" that's offered to small businesses rarely worked out for my clients and I. From blog for women and tax credits to business loans. It was either impossible to qualify, required fancy financial statements and/or piles of forms, applications and other assorted paperwork only to discover that individuals didn't met the criteria. Sure, I have had some successes with bank and SBA loans nevertheless for every success there were many rejections. Sorry your client doesn't fulfill the banks criteria... I would ask, why then did the lender manager encourage my client to use? More wasted time. Do I charge my client with this time? I am running a business in fact. What about unsecured business loans melbourne spent gathering the information. Was all of this for naught? After many years of frustration I found appreciate how the system worked. Bankers want to assist small company owners by giving small company loans and procuring applications. It's not their job to gauge give you if a client is credit worthy or otherwise. That's the job of the underwriter. What I saw would be a pattern of rejections according to "inadequate cash flow", "low asset base", "low equity", etc... Even though they had this info at the start in the process I found that it didn't matter. So rather than wasting my clients' money and time, it absolutely was better face the facts. The truth was that the banks were only gonna lend money to companies that meet certain criteria. Then why were they promoting business loans? They do give out small company loans. They don't give small enterprise loans to MICRO BUSINESSES! That is the point. It would be a matter of identifying which kind of business you are give you. My clients were not small business owners, these folks were Micro Businesses. What's the difference from your small business and a micro business? Size, revenue and structure. For commercial loans melbourne defines a small company as having up to 500 employees. The concern is among identification or miss-identification in such cases. Now we have correctly identified the type of businesses were, finding solutions are much easier. We don't must waste energy and on avenues which are really not available to us. The fact is that the phrase Microenterprise is rather new which is growing in strength and visibility. There is a nationwide network of lenders that really work with micro businesses so we have an emerging voice in Washington with organizations such as The Association for Enterprise Opportunity. According to 2008 employment and economic data from the US Census Bureau and US Department of Commerce: "• 88% of businesses in the United States employ less than 5 people, which makes them "microenterprises" • 18% of Americans were used by microenterprises in 2008 • More Americans are embracing microenterprise: the amount of microenterprises in the United States increased 2.2% between 2006 to 2008" The way that I interpret this details are that most businesses are micro businesses these entities do not represent a lot of buying power individually. To put it another way, micro businesses automatically tend not to represent enough profit for lenders to manage us. During the 1970's Dr. Mohammad Yunus started experimenting with making small loans to women in Bangladesh. The experiment triggered the founding of Grameen Bank in 1983 as well as the Nobel Peace Prize for that Doctor in 2006.Like it? Share it! More by this author |