Why Banks Don’t Want to Lend to Small Businesses

It’s one of the most frustrating realities facing today’s small business owners and small business owners-to-be: 68% of small businesses are looking for loans of $250,000 or less and 50% of small businesses are looking for loans that are less than $100,000, many traditional lenders have retreated from providing these smaller loans. Instead, they’ve opted to serve those seeking $1 million or more for their business needs. Given that there’s so much demand from small business owners looking for amounts way under $1 million, why aren’t banks serving these entrepreneurs more?

Another issue is access to credit. Big businesses have more access to large financing markets and can get credit very cheaply, While small businesses have little or no access to the same type of credit. Despite concerns, there are some promising changes taking place in the alternative small business lending market to fill this void - especially through the advances of IMN Direct Capital Funding. With more efficient technology, lenders are able to lower their overhead and underwriting costs and pass those savings to small business owners. For example, brokers such as IMN Direct Capital Funding are using technology to drive down the cost of credit by connecting borrowers and investors to alternative sources. 

Protecting small businesses and giving them the opportunity to access responsible credit in a competitive market is just as critical as protecting individual consumers. Many small business owners have put their lives on the line to create new opportunities for their families and communities. Encouraging the values of the Small Business Borrowers’ Bill of Rights — access, transparency and inclusion — through industry-led efforts and thoughtful government policy will give rise to a market that secures the role of good lenders, strengthens small businesses and strengthens our workforce.

Interested about alternative lending call us at 609-365-0001 or visit our website www.imndirect.net to see if your small business qualifies for funding.