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Finance: Are You Looking for a Small Business Loan? Now Might Be the Right Time

July 4, 2011

From the SCORE Small Business Success Blog

 

Original Post

 

During the recession, small business owners who normally could have gotten loans suddenly found themselves being turned down—and those with outstanding loans sometimes saw the banks call in their loans for what seemed like no reason. As the economy improved, the lending situation didn’t—until now.Scott Chan's Time for Money image

Things seem to be finally taking a turn for the better. According to the Thomson Reuters/PayNet Small Business Lending Index, which measures the volume of small business financing, small business lending increased 17 percent in April compared to the same period a year ago.

Even better news: This was the ninth month in a row that the Index showed a double-digit increase—and that’s a good indicator that small businesses are getting ready to grow again as soon as consumer demand picks up (which is already happening in some industries).

“The fact that small businesses are hanging in there is a good sign for the economy,” PayNet president William Phelan Phelan told Reuters. “The data tells us they are having more of a pause than a major contraction.”

Of course, the news doesn’t mean getting a loan is easy. Getting a small business loan has always been a bit of a challenge even in the best of times. But if your industry outlook is positive, your company has strong cash flow and you can convince the bankers you’re ready to grow, now could be the time to seek financing.

Before you do, however, you need to be sure you’ve got all your ducks in a row. Banks were burned by the recession as well, and they’re facing new regulatory oversights that require them to review loan applications more carefully. So even though some banks are courting small companies, you’ll still need to jump through some hoops.

A SCORE Mentor can help you prepare your paperwork and run the numbers to be sure you’re perfectly prepared for the loan approval process. He or she can also help you determine how much you need and make sure you’re not overextending yourself or putting your business at risk. Visit the SCORE website today to get matched with a Mentor or get free counseling online 24/7.

By Rieva LesonskyGrowBiz Media

 

Image: scottchan / FreeDigitalPhotos.net

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