It’s rare for an entire industry to experience what can rightfully be referred to as a “transformation.” Well, the business financing industry is one of the few exceptions to this rule. More and more sources of small business loans are appearing and growing every day. Virtually every member of the new wave of business lenders shares at least one core value: to make small business loans more accessible for more types of businesses. It’s safe to say that for the average small business, the most popular business funding programs (business term loan, business line of credit, etc) are currently much easier to obtain than in generations’ past.
A skeptic might attribute this to business lenders taking advantage of common small business struggles to make a quick profit. But companies like United Capital Source are a different story. Our business loans are more accessible than traditional products simply because they should be. Here are 3 reasons small business loans are (and should be) more accessible moving forward:
1. All Businesses Go Through Rough Patches
You probably can’t even count how many times you’ve heard someone say “It’s all about who you know.” The main reason this saying is so frequently regurgitated is because it isn’t just about starting or growing a business. It’s more like a law of what usually separates people who succeed from people who fail. When the odds are stacked against you, those who have relationships with the right people will triumph. For small business owners, this law is a reality. In many cases, the biggest difference between the small businesses that succeed and the small businesses that fail is the former group’s connections. No, it’s not always about hard work or intelligence. A failed small business could have worked just as hard as a successful one.
All small businesses go through financial ups and downs. Myriad circumstances can cause changes in demand or operational disruptions. Even the most successful small businesses have run into rough patches or excessively slow seasons. The majority of them were likely able to overcome these challenges by accessing help from a certain individual or company. They didn’t need an absurd amount of money. Just enough to fix a logistical problem while continuing to do what they do best.
Companies like United Capital Source have proven that with the right kind of help (aka the right small business loan), businesses from countless industries can overcome the aforementioned challenges and stabilize their finances in the process. In fact, a great deal of our clients were rejected by banks even though had run into the same dilemmas as any other small business and were asking for appropriate amounts. Thanks to the new wave of business lenders, more small business owners can now say that they “know someone.”
2. Operational Costs Are Through The Roof
It’s only natural for standards of living to increase. Still, you can’t deny that we are living in a particularly expensive time. Many small businesses are earning just a little more revenue than their predecessors but their costs have skyrocketed. Technology is becoming more advanced by the minute, making equipment much more expensive for medical practices, construction companies, and auto shops. Labor costs have increased as well, especially in the restaurant business, which already suffers from notoriously low profit margins. Until revenue increases just as much as costs, small businesses will be vulnerable to outrageous expenses that they are unable to cover with their own funds.
Had operational costs not increased so significantly, there wouldn’t be so many more business lenders and products to choose from. A major focus of companies like United Capital Source is allowing businesses to simply meet their new operational standards. With programs like equipment financing, businesses can make large investments and actually use them to their full advantage by serving as many customers as possible.
3. New Tools For Staying Competitive
Expenses aren’t the only thing that’s rising in the small business world. You don’t have to be a business owner to know that most industries have grown tremendously as of late. A drive down the busiest street in your neighborhood will likely reveal far more restaurants, fitness centers, cosmetics stores, doctor’s offices than previous decades. And those are just the businesses you can see. Certain industries are now overcrowded with online competitors as well. As you can see, small businesses have a lot more competition on their hands and must procure the resources to stand a chance.
A brick and mortar retailer, for example, might have to start offering online shopping. A sit-down restaurant might have to start offering a delivery service. These are the kind of measures small businesses must take in order to face a new level of competition. In addition to the cost of launching the services, the businesses must adjust their cash flow so they can maintain the services throughout their tumultuous financial cycles.
Small business loans are more accessible because being competitive no longer just means having more stores or more products. You need a bigger arsenal of tools and, in some industries, you need to start building that arsenal in your early stages. Such tools are within reach if you work with a business lenders that specializes in younger, smaller clientele. That journey begins with a company like United Capital Source.