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Have You Considered Micro Lending, Community Banks and Credit Unions for Your Business Finance Needs?

July 2, 2010 by Frank Goley, Business Consultant

The business finance statistics are sobering: Commercial Loans by US Banks have decreased 21%. Wow! So how does a business get funding? Well, there are still a few ways left…

Micro Lending

Micro Loans have been out a while but now there is a new twist. There is now Micro Venture Funding. These Micro funders collectively gather funds from investors and spread the risk among different investments. You can get a loan or investment from a pool of investors, all managed by a Micro Fund. To qualify, it is more about business model and cash flow, verses credit score and traditional bank finance parameters.

Your Community Bank

Search for Community Banks that care and understand your business. Pair that up with an SBA guarantee and you will be surprised that you can still secure bank finance, even if things are not so good with your business in this recession. Find a banker that listens and is in tune with local businesses.

SBA backed loans increased this year due to an influx of $1 Billion in loan guarantees from the Recovery and Reinvestment Act. Hopefully the proposed $30 Billion from TARP will be approved and available soon through the Small Business Fund. Your local SBDC can provide you a list of local SBA lenders.

Community represent 97% of all banks in the US. There are a lot of them. Go hunting in your backyard for one interested in your business and willing to help. Be sure to present the best picture possible to a bank with a well prepared Business Plan and Loan Package.

Credit Unions

While less than one third of all Credit Unions make business loans, it is worth the search! Business Loans are the fastest growing financial line for credit unions so you will find more and more starting to lend to local businesses. While Credit Unions may be a little more stringent, their average business loan is $200,000. So if you are looking for a loan in that range and qualify well, then compare the credit union to your bank finance. You may just find a better deal! Also most credit unions will find a way for you to join if you are a potential good customer.

Good luck and let us know about your business finance struggles and successes. We would love to share the experience and knowledge!

Resource: Video on Getting a Business Loan with a Credit Union


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Posted in Business Finance.

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