Small business loans have helped many entrepreneurs launch their dreams in 2016, and the New Year looks to be even more promising! If you’ve never used a small business loan, or you are not sure if you qualify to get one, then you will want to know more about this opportunity. Now is the time to start prepping your 2017 budgets, gathering all your financial reports and finding all the tax breaks you can. A small business loan could be a big part of your success heading into the New Year.
Here is what’s in the small business loan forecast for 2017, so you can be in the know:
THE US ECONOMIC CONDITIONS APPEAR TO BE FAVORABLE
Experts predict that 2017 will be an outstanding year financially for many small business owners because of a new presidency that’s aimed at stimulating the economy. According to a recent post in Forbes, the economic outlook is positive for the coming year. Between increasing numbers of jobs and an increase in consumer spending (3.8 percent) that’s higher than last year’s figures, things are going to be better for small businesses.
THE FEDERAL RESERVE RATE INCREASE
What we know is that in December, the Federal Reserve announced a slight rate hike, the first one in about five years to be exact, that can and will impact small business loans. The Wall Street Journal reports that this will be one of three proposed rate increases to anticipate in 2017 – that could amount to as much as 3 percentage points. Small businesses will be wise to locate a lender now that can set them up with a lower small business loan rate now, rather than wait for the rates to increase closer to the third quarter.
MERCHANT CREDIT CARD AND E-COMMERCE SYSTEMS WILL BECOME MORE SECURE
Recent escalated attacks on government and banking servers has led to the rapid development of high level security systems. Chips imbedding in credit cards enable merchants to verify information that protects them from credit card fraud. Enhanced security measures help those who take out merchant cash advances know that their financial data is safe, while they enjoy the flexibility and freedom of making their payments on time. So too, with the increase in e-commerce business, there will be new and better gateways that will provide an added layer of information security.
SOP 50 UPDATES FOR 2017 COULD IMPACT SMALL BUSINESS LOANS
In terms of obtaining small business funds through the Small Business Administration, new restrictions take place January 1st. The new rules around SOP 50 10 5(I), mean that the SBA will have to scrutinize every new application for grants and loans, which will make the process much slower. There are also additional size and business type restrictions for franchises, women-owned, and minority-owned businesses, as well as less incentives for veterans who want to start their own companies.
GETTING EASIER FOR WOMEN TO GET SMALL BUSINESS LOANS
In the New Year, there is expected to be an increase in the number of women-owned businesses being accepted for small business loans. This is mainly because women have proven to be excellent customers, who repay their debts on time and faster than any other type of business owner. Fortune magazine reports that women-owned firms are the fastest growing sector of the small business marketplace, citing an American Express survey that indicated, “Women now own 30% of all businesses in the U.S., accounting for some 9.4 million firms.” Women of color represent around half of these companies. This means the forecast looks good for women who want to start or grow a business in 2017, because they will have a much better chance of obtaining the funding they need.
NEW LEGISLATION TO OVERHAUL THE CREDIT REPORTING SYSTEM
The three major credit bureaus have long been criticized for being outdated and inaccurate. In 2017, we’re watching closely as a new bill introduced could overhaul the US credit reporting system as we know it, making it much easier for small business owners to get small business loans. H.R. 5282: Comprehensive Consumer Credit Reporting Reform Act of 2016 is still a long ways from being approved, but serious proponents of the bill hope that it reduces the strain on many Americans, including those who hope to start businesses this year. The law would remove all previous aging debts at 4 years instead of the current 7 years. This could improve credit scores, especially for those trying to rebuild credit.
BAD CREDIT SMALL BUSINESS LOANS WILL STILL HELP MILLIONS OF PEOPLE
In keeping with the spirit of democracy and a free market economy, there will continue to be opportunities for small business owners to obtain the funds they need to build dream businesses. There will be more programs available for bad credit business loans and those who are trying to rebuild their credit histories. More flexible small business loan programs will be available that offer easier payment terms that meet the needs of fluctuating cash flows, a typical issue with small businesses. In 2017, there won’t just be one way to fund a business. Instead, small businesses may benefit from a wide variety of equity building programs that can get them to their destination faster.
Not sure how or where to get started with a small business loan, merchant cash advance program, or other alternative funding sources for your business? Get in touch with the caring financial experts at United Capital Source, and let us help you start your New Year out financially strong.