Over the past few years, many of the nation's small business owners have found it extremely difficult to obtain much in the way of financing from major lenders. However, this doesn't mean they've gone without, as many have turned to alternative sources for funding. Experts now say that's a trend that's likely to continue over the course of the coming year and beyond.
For example, the new technology-powered non-bank small business lender OnDeck recently announced that it saw the number of customers it served over the course of last year spike 140 percent, and the applications it received from independent companies likewise rose 166 percent, according to a report from the company. In all, small business loan volume for the company now stands at more than $825 million.
"Our momentum is a result of our team's flawless execution and our ability to better identify creditworthy small businesses through technology," said Noah Breslow, chief executive officer at OnDeck. "OnDeck's 150 percent revenue jump in 2013 demonstrates both the high quality of our disruptive solution to a flawed traditional lending system, and the continued need small businesses have for lenders that can deliver fast and friction-free capital."
A demographic breakdown
There are a lot of ways in which different types of companies in all parts of the country came to OnDeck over the course of 2013, the report said. For instance, while restaurants in Texas put in the most applications for loans in 2012, last year was dominated by contractors and residential construction companies, for which requests surged 306 percent within the Lone Star State alone. Perhaps not surprisingly, among the 10 largest markets that submitted applications, Dallas and Houston made the list.
Interestingly, it seems as if the implementation of the Patient Protection and Affordable Care Act has had a major impact on applicants as well, the report said. Loan requests from home health care providers in California surged 167 percent, while there was an 88 percent spike from doctors nationwide.
Owners who want to obtain more financing but are having difficulties in doing so might want to take the time to examine their internal numbers. For instance, if they find they're spending more than is necessary on small business insurance, shopping around for new coverage may be a great way to tighten up a lagging bottom line. Finding more affordable general liability insurance, for instance, can reduce costs by thousands of dollars per year.