There are a lot of reasons why banks aren’t making small business loans…one of the first is that there is a need for SMALL LOANS!
With all the regulations, it costs a bank the same to underwrite a loan of $170,000.00, as it does to underwrite a loan for $17,000.00, the mi-level price range of a small IT equipment upgrade.¬† You can only imagine the paperwork needed to fill out the required information for that $17,000.00, and why the bank who used to be your friend, is not looking at you like you’re a criminal, and is asking for more information than you have time to give him…it’s almost tempting to put it on a credit card, but you know better.
Another reason Banks are afraid to make small loans is that many of the smaller, community banks have simply gotten swallowed up by bigger fish.¬† The community banks’ ranks have been decimated by these takeovers since the ’80’s, which is hurting the real job creation in the U.S.
It’s a little easier to realize why small business loans have dwindled, but the problem of actually finding the financing for projects in a small business is still very much there.¬† What is an easier way to secure the funding for those projects that will ultimately make your business better?
Is a lease the answer, it might be, but there are a lot of lessors out there…which one to choose?¬† More on that later….