We want to remind business owners that there is credit available, but business owners need to know where to look. FDIC data shows that community banks are responsible for much of the recent commercial lending across the U.S. We also suggest that business owners look for banks that work extensively with the SBA. Participating in SBA programs makes credit more available to businesses and less risky to banks. And that benefits the business, the bank, and the entire community.

According to a recent survey by Right Management, 75 percent of organizations involuntarily lost top talent in the past 12 months. While this type of movement may be good news to individuals who are thinking of changing jobs or looking for a job, it can be bad news for your banking relationship.
 

This is because the work experience of a business’ management team is one of many important criteria used by banks to determine the risk associated with a commercial loan applicant. Of course, bankers always care about the condition of your balance sheet and the condition of the market in which you operate. The experience and qualifications of the management team are also evaluated to help the bank determine the potential for a business to succeed and the team’s ability to judge opportunities and risks over the business’ life cycle.
 

If you are trying to expand your business or need to refinance to free up some working capital, it is important to be sure that you have strong, experienced people on your management team and that you are working to retain these employees. Retaining top talent will help your business in myriad ways on a daily basis and will provide you with additional credibility with your banker.
 

 

Lately, there have been many articles written about how it has become more difficult for small businesses to obtain commercial loans and how banks simply are not lending. Nothing could be further from the truth.
 

Yes, it is true that some business owners are having a difficult time obtaining loans. But it is also true that right now there are more banks participating in the Small Business Administration’s loan programs than ever before. The biggest difference between perception and reality is a change in how banks are making decisions – a process we should all get used to as the new normal.
 

The new normal in business lending is nothing more than common sense. Just like individuals with low credit scores, mountains of debt, and low-paying jobs should never have been given the large mortgages they were able to receive before the housing bubble burst, business owners with poor credit scores and no business history should not receive large loans they may not be able to repay. Although it would be much easier for a startup business to get its feet off the ground with a bank loan, prior to just a few years ago, that was not the way it was done. Traditionally, startups have been financed through the owner’s savings or venture capital. Bank loans came later. This makes sense. After all, if you are not willing to risk your money on your business, why should the bank?
 

There are many banks, both small and large, that are making loans. Yes, they can afford to be more selective about the businesses they choose to finance. This simply means that if you want a commercial loan, you need to present a well-run business to the bank. You need to demonstrate a level of expertise in your business and show your banker that your business has potential. This is something I discussed in an interview with SCORE Chicago. You can watch the video here.
 

1. Provide employment;
2. Improve the economic or environmental climate;
3. Promote the conservation, development, and use of water for aquaculture; or
4. Reduce reliance on nonrenewable energy resources by encouraging the development and construction of solar energy systems and other renewable energy systems.

If you’d like to learn more about the USDA B&I Guaranteed Loan Program, you can visit the USDA website or call us at 262-789-1011.